Income Tax Appellate Tribunal - Delhi
Ito, New Delhi vs M/S R.N.B. Mercantile Pvt. Ltd.,, New ... on 31 October, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'SMC', NEW DELHI
BEFORE MS. DIVA SINGH, JUDICIAL MEMBER
ITA No. 5871/Del/2016
Assessment Year: 2010-11
ITO R.N.B. Mercantile Pvt. Ltd.
Ward 20 (3), Vs. 1 Shivaji Enclave Main
New Delhi Road, Near Rajagarden
New Delhi
PAN : AABCR9334G
(Appellant) (Respondent)
Appellant by None
Respondent by Sh. T. Vasanthan, Sr. D.R.
Date of hearing 22-08-2017
Date of pronouncement 31.10.2017
ORDER
PER DIVA SINGH, J.M. :
The present appeal has been filed by the assessee assailing the correctness of the order dated 29.7.2016 of CIT(A), Bikaner pertaining to 2010-11 assessment year on the following grounds:
1. That on the facts and circumstances of the case and in law, the Id. CIT(A), Bikaner has erred in not appreciating the fact that t6he order u/s 127 of the I.T.Act passed by CIT, Bikaner was effective w.e.f. 21.08.2014 whereas the assessment order in question was framed by ITO, Ward 1(3), Bikaner on 14.03.2013 i.e. much before the passing of jurisdiction order u/s 127 of the IT Act by CIT, Bikaner.
2. That on the facts and circumstances of the case and in law, the Id. CIT(A), Bikaner has erred in not appreciating the fact that the concerned AO had no other option but to frame the pending assessment for AY 2010-11 in this case by 31.03.2013 otherwise it would have got time barred.
3. That on the facts and circumstances of the case and in law, the Id. CIT(A) had erred in not appreciating that the assessee had accepted the jurisdiction of the ITO, Ward 1(3), Bikaner as is evident from its submissions for A.Y. 2010-11 dated 28.02.2013 made before the aforesaid AO.
4. That on the facts and circumstances of the case and in law, the Id. CIT(A) has erred in that the AO had not acted in accordance with the provisions of section 124(4) when in fact the assessee had not questioned the AO's jurisdiction within the time limit stipulated u/s 124(3)(a).
2. At the time of hearing, an adjournment application was moved on behalf of the assessee. As no one was present on behalf of the assessee, the appeal was passed over. In the third round also the assessee remained unrepresented. The learned Sr. DR submitted that adjournment application had been filed by him also. However, considering the fact that the appeal could be decided on the basis of material available on record the request for time was rejected.
2 ITA No.5871 /Del/20163. The ld. Sr.DR inviting attention to the record submitted that the reasoning taken by the Ld. CIT(A) that the Assessing Officer should have waited for the order of the CIT Bikaner is an incorrect appreciation of law by him. It was his submission that the Assessing Officer has to pass an order within time and had he waited the order would have become time barred and this lapse on the part of the Assessing Officer would have invited serious consequences having vigilance angle as a question, his competency or capacity etcl would have been raised. Accordingly, the conclusion drawn by the CIT(A) it was submitted, is contrary to the settled legal position.
4. I have heard the submissions and perused the material available on record. The record shows that the present appeal was adjourned on 29th of June, 2017 on the request of the assessee. Despite this fact the assessee has chosen to remain unrepresented. Accordingly, taking note of the fact the assessee had adequate notice about the date of hearing. I deem it appropriate to proceed to address the facts, reasoning and the correctness of the conclusion drawn by the CIT(A) which is under challenge by the revenue in the present proceedings.
5. The record shows that the assessment order u/s 143(3) dated 14.03.2013 was earlier also challenged in appeal before the CIT(A). The CIT(A) vide his order dated 13.11.2014 had dismissed the appeal of the assessee. On a further challenge before the ITAT, the same was set aside back to the CIT(A) holding "in the interest of the principles of natural justice that the issues in the appeal are restored to the file of the learned CIT(A) for re-adjudication after affording adequate opportunity of being heard to the assessee". The said direction was given on the prayer of the assessee that the assessee had filed a letter dated 07.102014 before the CIT(A) stating that the issue of jurisdiction was pending before the CIT, Bikaner. Pursuant to the remand by the ITAT, the CIT(A) in the second round which are the proceedings under challenge by the Revenue allowed the appeal of the assessee considering the following arguments of the assessee :
"During the course of instant appellate proceedings, the appellant made written submissions through the AR in support of grounds relating to jurisdiction. It was stated that during the year 2005-06, the appellant transferred its corporate office from Bikaner to New Delhi and the same was informed to concerned ITO/Assessing Officer with a request to transfer the assessment records to ITO, New Delhi vide letter dated 20.09.2006. Despite that the ITO, Ward-1(3), Bikaner completed the assessment without complying with the provisions of sec. 124(4) of the Act. It was further stated that subsequently, the appellant approached the Hon'ble CCIT, Jodhpur and filed letters dated 15.11.2013 and 10.06.2014 before him with a request to take the matter on priority and transfer the assessment records to New Delhi. The Hon'ble CCIT, vide letter dated 19.8.2014 directed the Ld. CIT, 3 ITA No.5871 /Del/2016 Bikaner to transfer the assessment records to ITO, New Delhi. In compliance to these directions, the ld. CIT, Bikaner, passed order u/s. 127 of the Act dated 21.08.2014 issuing directions regarding transfer of assessment records to New Delhi. It was further stated during the AY 2008-09, the appellant's case was selected for scrutiny u/s. 143(2) of the Act by the ITO, who Ward -1(3), Bikaner and this time also, the appellant raised the similar objections regarding jurisdiction. The matter travelled to Hon'ble ITAT, who vide their order dated 13.06.2014 in ITA No. 340/JU/2013 observed that the AO failed to refer the matter to higher authorities to settle the issue of jurisdiction and there is violation of provisions of section 124(4) of the Act and allowed the objections raised by the appellant by the restoring the matter to the AO for fresh adjudication. In fact, the ITO, Ward-20(3), New Delhi vide order dated 29.03.2016 also accepted the claim of the assessee that the jurisdiction vests with him. The appellant further contended that the AO has no jurisdiction over its case and the order passed without complying with the provisions of sec. 124 of the Act, does not survive in the eyes of law and same is null and void. In support of its claim, the appellant relied on various judicial decisions. On the strength of these submissions, the appellant submitted that the entire proceedings may be held as void ab-initio.
5.1 Relief granted, which is under challenge was on account of the following reasoning :
I have considered the facts of the case and submissions of the appellant and I find that it is a fact that the appellant has raised objections regarding transfer of jurisdiction before the AO before finalizing the assessment for the instant AY 2010-11. Despite that the AO neither referred the matter to higher authorities to settle the issue of jurisdiction nor waited for the order of ld. CIT, Bikaner and as such there is no violation of provisions of section 124(4) of the Act. In fact, the issue of jurisdiction is already settled in preceding assessment years i.e. AY 2005-06 and 2008-09. For the sake of clarity and ready reference, the order of the Hon'ble Ld. CIT, Bikaner passed u/s. 127 of the Act is reproduced as under:-
"Order u/s. 127 of the Income Tax, 1961 In exercise of the powers conferred by sub-section (2) of sec. 127 of the IT Act, 1961, I, the Commissioner of Income Tax, Bikaner, hereby transfer the case, particulars of which are mentioned in column (3) of the schedule given hereunder from the Assessing Officer mentioned in column (5) to the Assessing Officer mentioned in column (6) thereof. This transfer is being affected for administrative convenience.
S PAN Name and AY From To
No. Address
1. 2. 3. 4. 5. 6.
1. AABCR9334G M/s. RNB NA ITO, Ward- ITO, Ward-
Mercantile (P) 1(3), Bikaner 15(4), New
Ltd. Delhi
This order shall come into force w.e.f. 21.08.2014.
Thus, from the above order, it is clear that correct jurisdiction over the instant appellant lies within the ITO, Ward-15(4), New Delhi and with the ITO Ward-1(3), Bikaner. Accordingly, it is held that the ITO, Ward-1(3) passed the assessment order for the AY 2010-11 without having proper jurisdiction over the case and acted against the provisions of sec. 124 of the Act. Accordingly, the assessment order u/s 143(3) dated 14.03.2013 passed by the AO i.e. ITO, Ward-1(3), Bikaner for the AY 2010-11 is held as bad in law and on facts. The appellant therefore succeeds.
(emphasis supplied) 5.2 On a consideration of the facts, circumstances and position of law, I am of the view that the ld. CIT(A) was grossly in error in coming to the aforesaid conclusion. The record shows that the return was filed on 15/10/2010 and 4 ITA No.5871 /Del/2016 the assessment order under section 143 (3) was passed on 14th of March 2013. The record further shows that in the aforesaid order of the CIT Bikaner under section 127 the jurisdiction stood transferred w.e.f. 21st of August 2014 by an order dated 21.08.2014. The order of CIT, Bikaner under section 127 extracted in the order by the CIT(A) itself highlights the said fact. Admittedly on the date the assessment order was passed, the Assessing Officer had a valid jurisdiction. Even otherwise the reasoning taken by the Ld. CIT(A) that the Assessing Officer should have waited for the order of the CIT Bikaner is an incorrect appreciation of law as the statutory time limit as fixed in Section 153 of the Act for passing the assessment order has to be strictly adhered to by the Assessing Officer and his delay in passing the order is inexcusable under law and statutory timeline cannot be treated as a casual requirement. It is seen that the timeline for passing the assessment order was still available, however, by the time the order u/s 127 deciding jurisdiction by CIT, Bikaner came into effect i.e. on 21.08.2014, the time line of passing the assessment order stood extinguished. The date on which the assessment order was passed, the AO definitely had a valid jurisdiction.
Accordingly, holding the finding arrived at by the Ld. CIT(A) as contrary to law, the impugned order is set aside and the issues on merits are accordingly restored back to the file of the CIT(A) with the direction to decide the same issue in accordance with law after giving the assessee a reasonable opportunity of being heard. The said order was pronounced in the open court at the time of hearing itself
6. In the result the appeal of the revenue is allowed for statistical purposes Order Pronounced in the Open Court on 31st October,2017 Sd/-
(DIVA SINGH) JUDICIAL MEMBER SH(Delhi)/Poonam(CHD) Copy forwarded to:
Appellant Respondent CIT CIT(Appeals) DR: ITAT ASSISTANT REGISTRAR, ITAT NEW DELHI