NANDLAL COMMERCIAL PRIVATE LIMITED,KOLKATA V. INCOME TAX OFFICER WARD 3(1), KOLKATA

ITA 505/KOL/2024

AI Insights

The case involves Nandlal Commercial Private Limited appealing against the assessment order for the assessment year 2012-13, which was passed by the Income Tax Officer, Ward 3(3), Kolkata. The appellant raised several grounds, primarily challenging the jurisdiction of the officer who issued the assessment order, citing the lack of a mandatory notice under section 143(2) of the Income Tax Act and improper transfer of jurisdiction between different wards. The Tribunal admitted the additional grounds for adjudication, considering them to be legal issues that went to the root of the matter. After reviewing the facts and relevant legal precedents, the Tribunal concluded that the assessment was invalid due to the procedural lapses in issuing the necessary jurisdictional notices.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712967 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Assessment Year: 2012-2013
• Other Referred Cases: Jute Corporation of India Ltd. Vs CIT, National Thermal Power Co. Ltd v. CIT, Pr. CIT Vs. Eversafe Securities Pvt. Ltd., Kusum Goyal Vs. ITO, Subhas Chandra Bhaniramka, M. A. E. K. K. Varma
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR PATI
• Assessee Lawyers: SOUMITRA CHOUDHURY
• Keywords: Set aside; Unexplained cash credit; Gift; Competent authority
• Section: 143(3); 154; 271(1)(c); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.505/KOL/2024 (Assessment Year:2012-13) Nandlal Commercial private Limited, Kolkata 1, Mahendra Nath Roy, Bye Lane, Kolkata-711101, West Bengal Vs. Income Tax officer, Ward 3(1), Kolkata Aaykar Bhavan, P-7, Chowringhee Square, Kolkata-700069 West Bengal (Appellant) (Respondent) PAN No. AADCN2898K Assessee by : Shri Soumitra Choudhury, AR Revenue by : Shri Manoj Kumar Pati, DR Date of hearing: 16.07.2025 Date of pronouncement: 30.07.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 03.10.2024 for the AY 2012-13. 02. The assessee has raised additional grounds which is extracted as under: - “1. For that on the facts of the case, the assessment order is void ab initio in as much as, no mandatory notice u/s. 143(2) of the 1.T. Act issued by ITO Ward-13(3), Kolkata before he framed to assessment stage, hence the assessment proceedings and assessment order was bad in law and hence the same be quashed. 2. For that on the facts of the case, ITO Ward-44(4), Kolkata was not issued notice as per Jurisdictional Transfer Provision of the I.T Rules to ITO Ward-13(3), Kolkata and Printed from counselvise.com Page | 2 ITA No. 505/KOL/2024 Nandlal Commercial Private Limited; A.Y. 2021-13 not intimated to the assessee transfer order u/s. 120 or 127, therefore, he did not enjoy the jurisdiction to frame the assessment u/s. 143(3) of the Act and order passed by the AO, as well as the CIT(A) is null in the eyes of law and it has to be quashed. 3. For that the competent authority has not passed any transferred order u/s 127 of transferring the assessee's file from ITO Ward-44(4), Kolkata to ITO Ward-13(3), Kolkata. As such, without transferred order u/s 127 the ITO Ward-13(3), Kolkata cannot assume the jurisdiction over the assessee. Hence, the assessment order passed u/s. 143(3) dated 30.03.2015 by the ITO Ward-13(3), Kolkata without jurisdiction over the assessee is invalid, bad-in-law and ab-initio-void, and liable to be quashed. 4. For that on the facts of the case, that ITO Ward-13(3), Kolkata should not automatically assume jurisdiction over the case, the inter charge change of jurisdiction between two regions of requires concurrence of the concerned both the Commissioners, in exercise of powers under sub section (2) of section 127 of the Income Tax Act needs to passed specific order u/s. 127 of the Income Tax Act, therefore, the assessment order passed is bad in law and should be quashed. 5. For that in the facts of the case, the A.O. has made addition of Rs.2,49,46,000/- as share capital with premium, treating the same as unexplained cash credit u/s. 68 of 1.T. Act in assessment order u/s. 143(3) dated 30.03.2015 which is rectified by the A.O. u/s. 154 of the 1.T. Act on 12.05.2015 arrived at Rs.48.36 lakhs as share capital with premium, as such the finding of the Ld. CIT(A) which is completely arbitrary, unjustified and illegal.” 03. Brief facts of the case are that notice u/s 143(3) was issued by ITO Ward 44(4), Kolkata. The case was then transferred to ITO Ward 1(3) and then to TRO-3, Kolkata. Finally, the assessment was framed by ITO ward 3(3), Kolkata. The appeal filed by the assessee is also dismissed by the CIT (A). 04. The ld. Counsel for the assessee has raised the above additional ground for the first time before the Tribunal which has not been raised before either of the authorities below but since, the issue raised goes to the root of the matter and is a legal issue respectfully following the decisions of the Hon'ble Apex court in the case of Jute Corporation of India Ltd. Vs CIT in 187 ITR 688(SC) and National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 (SC), we are inclined to admit the same for adjudication. Printed from counselvise.com Page | 3 ITA No. 505/KOL/2024 Nandlal Commercial Private Limited; A.Y. 2021-13 05. After hearing the rival contentions and perusing the materials available on record, we find that admittedly the notice u/s 143(2) of the Act was issued by ITO, Ward 44(4), Kolkata, whereas the assessment was framed by ITO Ward 3(3), Kolkata vide order dated 10.03.2015. Therefore, the notice u/s 143(2) of the Act was not issued by the ld. AO framing the assessment and therefore, the assessment was framed without proper jurisdiction. The case of the assessee is squarely covered by the decision of Hon'ble Kolkata High Court in case of Pr. CIT Vs. Eversafe Securities Pvt. ltd. In ITAT/156/2022, IA No. GA/1/2022, GA/2/2022 vide order dated 02.01.2023 & Kusum Goyal Vs. ITO (2010) 329 ITR 283 (Calcutta), wherein it has held that if the ld. AO passing the assessment order has not issued the jurisdictional notice u/s 143(2) of the Act, then he has no authority to frame the assessment. The Hon'ble Calcutta High Court in case of Kusum Goyal Vs. ITO (supra), held as under: - “10. It is evident that respondent No. 2 had sought to justify his action by stating that the jurisdiction automatically gets vested with the jurisdictional officer and no order under section 127 is required to be passed. In my view, the letter/notice dated October 21, 2009 is patently illegal since it has been held in this judgment that in case of transfer within the same city, locality or place although the opportunity of hearing as postulated in section 127(1) and (2) has been dispensed with, other statutory formalities which includes issuing an order are required to be complied with. Similarly transfer of files for the assessment years 2007-08, 2008-09 and the earlier years as intimated in the letter/notice dated July 30, 2009 issued by respondent No. 1 is also bad in law. The argument of the respondents that in case of intra city transfer no order is required to be passed, cannot be accepted in view of the settled position of law in KashiramAggarwalla [1965] 56 ITR 14 (SC) and in S.L. Singhania [1992] 193 ITR 275 (Delhi) wherein the validity of the orders were under challenge, meaning thereby an order recording transfer has to be on the records. The judgment in Subhas Chandra Bhaniramka [2010] 320 ITR 349 (Cal) where it has been held that in case of transfer of file under section 158BD resort has to be made to section 127 also applies in the instant case. The judgment in M. A. E. K. K. Varma [1981] 129 ITR 31 (AP) relied on by the Revenue is not applicable as it dealt with the question whether in case of intra city transfer notice is required to be served and whether separate orders of transfer are required under the Wealth-tax Act, 1957 and the Gift-tax Act, 1958. Therefore, since it has been held in this judgment that it is imperative on part of the respondents to issue order under section 127(3), the letters/notices under challenge are set aside and quashed. The writ petition is allowed. Consequential proceedings are also set aside and quashed. Accordingly, the notice dated 6th January, 2010 regarding Printed from counselvise.com Page | 4 ITA No. 505/KOL/2024 Nandlal Commercial Private Limited; A.Y. 2021-13 the penalty proceedings under section 271(1)(c) for the assessment year 2006-07 is also set aside and quashed. The application being G. A. No. 81 of 2010 is also allowed” 06. Therefore, considering the facts of the instant case in the light of the ratio laid down in the above decisions, we hereby quash the assessment framed by the ld. Assessing Officer. 07. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 30.07.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 30.07.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata Printed from counselvise.com Page | 5 ITA No. 505/KOL/2024 Nandlal Commercial Private Limited; A.Y. 2021-13 Printed from counselvise.com "