Income Tax Appellate Tribunal - Kolkata
M/S. Boast Traders Pvt. Ltd., (Formerly ... vs Dcit, Central Circle - 2(2), Kolkata , ... on 19 June, 2020
IN THE INCOME TAX APPELLATE TRIBUNAL
KOLKATA 'A' BENCH, KOLKATA
(Before Sri J. Sudhakar Reddy, Accountant Member & Sri Aby T. Varkey, Judicial Member)
ITA No. 1355/Kol/2018
Assessment Year: 2010-11
Deputy Commissioner of Income Tax, Circle - 2(2), Kolkata.............................................Appellant
Vs.
M/s. Boast Traders Pvt. Ltd....................................................................................................Respondent
Formerly known as ACME Pvt. Ltd.
147, N.S. Road
1st Floor
Kolkata - 700 001
[PAN : AACCA 1333 M]
C.O. No. 109/Kol/2018
A/o ITA No.1355/Kol/2018
Assessment Year: 2010-11
M/s. Boast Traders Pvt. Ltd........................................................................................................Appellant
Formerly known as ACME Pvt. Ltd.
147, N.S. Road
1st Floor
Kolkata - 700 001
[PAN : AACCA 1333 M]
Vs.
Deputy Commissioner of Income Tax, Circle - 2(2), Kolkata..........................................Respondent
Appearances by:
Shri Dhrubajyoti Ray, JCIT, D/R, appearing on behalf of the Revenue.
Shri S. M. Surana, Advocate, appeared on behalf of the assessee.
Date of concluding the hearing : March 4th , 2020
Date of pronouncing the order : June 19th, 2020
ORDER
Per J. Sudhakar Reddy, AM :-
This appeal filed by the revenue is directed against the order of the Learned Commissioner of Income Tax (Appeals) - 7, Kolkata, (hereinafter the "ld. CIT(A)"), passed u/s. 250 of the Income Tax Act, 1961 (the 'Act'), for the Assessment Year 2010-11. The assessee has filed a cross-objection being C.O. No. 109/Kol/2018 against the appeal of the revenue in ITA No. 1355/Kol/2018.
2 ITA No. 1355/Kol/2018Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
2. The ld. CIT(A) in this case, has held that, the order passed by the Income Tax Officer (ITO), Ward-2(2) 2(2) u/s 147 r.w.s. 143(3) of the Act, on 28/03/2016 is without jurisdiction. He further held that the reopening of assessment u/s 147 of the Act is bad in law. Aggrieved the revenue is in aappeal before us.
3. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:
follows:-
4. A notice was issued ed u/s 148 of the Act, reopening the assessment on 22/03/2015 by the ITO, Ward Ward-2(2), Kolkata,, after recording reasons for reopening. The assessee complied with the notice by filing income tax return on 16/04/2015 declaring
-Nil- income. Thereafter the asse assessee requested for reasons for reopening of assessment u/s 147 of the Act vide letter dt. 24/08/2015. Thereafter, the ITO, Ward-
Ward 2(2), Kolkata, issued notice u/s 143(2) of the Act. Then the file was transferred to the Assessing Officer having jurisdiction o over the assessee i.e., ITO, Ward- 4(3), Kolkata. The ITO, Ward- 4(3), Kolkata, issued a notice u/s 143(2) of the Act on 22/12/2015. He also issued notice u/s 142(1) of the Act on 22/12/2015. The assessee filed objections on 07/03/2016 before the ITO, Ward Ward-4(3), Kolkata.. The assessee objected to the notice issued u/s 148 of the Act on 20/04/2015. It was contended by the assessee that the ITO Ward-2(2), 2(2), Kolkata, had no jurisdiction over the case of the assessee, in view of the transfer of jurisdiction on the basis on Pin code. This letter was received on 20/04/2015 by the ITO Ward Ward-2(2), Kolkata.
4.1. The ITO, Ward-4(3), 4(3), Kolkata, passed an order u/s 144(1)/147 of the Act on 28/03/2016 determining the total income of the assessee at Rs.3,66,02,690/ Rs.3,66,02,690/-. On these facts, the ld. CIT(A) in the impugned order dt. 28/3/2018 allowed the appeal of the on the ground that the order passed u/s 147 of the Act is without jurisdiction jurisdiction. On merit he held that there was no material brought on record which proved the loss in derivatives claimed by the assessee as not genuine.
5. The ld. D/R relied on the order of the Assessing Officer and argued that the assessment was done by the jurisdictional Assessing Officer and hence valid. He 3 ITA No. 1355/Kol/2018 Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
disputed the findings of the ld. CIT CIT(A). In support of his case thee ld. D/R relied on the following judgments:-
Elite Pharmaceuticals vs. ITO [2016] 73 taxamnn.com 69 (Calcutta) Abhishek Jain vs. ITO [2018] 94 taxmann.com 355 (Delhi) CIT vs. S.S. Ahluwalia [2014] 46 taxmann.com 169 (Delhi) Bal al Chand Jain & Sons vs. DCIT [2014] 41 taxmann.com 524 (Allahabad) Karandhai Tamil Sangam vs. Joint/Additional Commissioner of Income Tax [2018] 97 taxmann.com 50 (Chennai (Chennai-Trib.) 5.1. The ld. Counsel for the assessee relied on the order of the ld. CIT(A). He relied on a number of case-law law in support of his arguments.
6. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, ted, we hold as follows:
follows:-
6.1. In the case of Elite Pharmaceuticals (supra) objections u/s 124(3) of the Act, was not raised within the period specified under the Act.. Similarly, in the case of Abhishek Jain (supra), no objection was raised 124(3) of the Act. Thus, on facts, both these cases are distinguishable. In the case of S.S. Ahluwalia (supra),, the Hon'ble Delhi High Court held that, passing of an assessment order without making reference to the Commissioner u/s 124 of the Act is a mere irregularity and not a nullity. In that case, the Hon'ble Court held that the Assessing Officer had jurisdiction by virtue of the place of residence or place of work of the assessee. As the Assessing Officer had legal jurisdiction over the assessee, the Court held in favour of the revenue. In the case on hand, the admitted fact is that the Assessing Officer who issued notice u/s 148 of the Act, Act had no jurisdiction over the assessee. Thus, case case-law law relied upon by the ld. D/R, are not applicable to the facts of this case.
6.2. In the case on hand, objections were raised by the assessee u/s 124(3) of the Act, within one month of receipt of notice u/s /s 148 of the Act and the Assessing Officer who issued notice u/s 148 of the Act, accepted that he had no jurisdiction on this case and 4 ITA No. 1355/Kol/2018 Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
thus transferred the case to the ITO, Ward Ward-4(3), 4(3), who had jurisdiction. A notice issued by non-jurisdictional jurisdictional Assessing O Officer is illegal.
6. This Bench of the Tribunal in the case of K.A. Wires Ltd. vs. ITO in ITA No. 1149/Kol/2019, order dt. 22nd January, 2020, held as follows:-
"8. We have heard rival contentions. On careful consideration of the facts and circumstances off the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:
follows:-
8.1. Jurisdiction of the Income Tax Authorities is conferred by the Board (Central Board of Direct Tax) u/s. 120(1) & (2) of the LT. Act, 1961. The Section reads as follows:
120. (1) income income-tax tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accord accordance ance with such directions as the Board may issue for the exercise' of the powers and performance of the functions by all or any of those authorities.
Explanation. - For the removal of doubts, it is hereby declared that any income-
income tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income income-tax authority lower in rank and any such dirdirection ection issued by the Board shall be deemed to be a direction issued under sub sub-section (1).
(2) The directions of the Board under sub sub-section section (1) may authorise any other income-tax tax authority to issue orders in writing for the exercise of the powers and performance formance of the functions by all or any of the other income- tax authorities who are subordinate to it.
(3) In issuing the directions or orders referred to in sub sub-sections sections (1) and (2), the Board or other income income-tax tax authority authorised by it may have regardrega to anyone or more of the following criteria, namely:
namely:-
(a) territorial area;
(b) persons or classes of persons;
(c) incomes or classes of income; and
(d) cases or classes of cases.
(4) Without prejudice to the provisions of sub sub-sections sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein, -
(a) authorise any 1[Principal Director General or] Director General or 14[Principal Director or] Director to perform such suc functions of any other income-tax authority as may be assigned signed to him by the Board;
(b) empower the 1[Principal Director General or] Director General or 14[Principal Chief Commissioner or] Chief Commissioner or 14[Principal Commissioner or] Commissioner to issue orders in writing that the 5 ITA No. 1355/Kol/2018 Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified speci area or persons or classes of persons or incomes or classes of income or cases es or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, references in any other provision of this Act, or in i any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply.
(5) The directions and orders referred to in sub sub-sections sections (1) and (2) may, wherever considered necessary or appropriate for the proper managemen management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or cla classes sses of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing sessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher author authority ity amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or ssanction of any such authority shall not apply.
(6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124,, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the incomeincome-tax tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification.
8.2. From a plain reading of the above, it is clear that u/s 120(1) of the Act, the Income Tax Authorities will have to exercise Acts only in accordance with the jurisdiction conferred erred by the Board. U/s 120(3) of the Act, such powers can be conferred by the Board having regard to the territorial area, class of person, income or class of the cases. The CBDT under sec. 120(5) of the Act, can also confer jurisdiction on two or more Assessing sessing Officers (concurrent jurisdiction). The CBDT can also by notification confer powers on the authorities for the purpose of assessment as may be notified in the notification. This shows that concurrent jurisdiction can be exercised only when CBDT confers fers such jurisdiction u/s 120(4) and 120(5) of the Act.
8.3. In accordance with the powers conferred u/s. 120 (1) and 120(2) of the Act, the CBDT issued notification on no. 191/2002(F.No.187/9/2002 191/2002(F.No.187/9/2002-ITA-1 1 dated 30.7.2002) whereby the CBDT conferred the jjurisdiction urisdiction by specifying the Designation of the specific Income Tax Authorities, its Head Quarters, Territorial Area, Persons or classes of persons and cases or class of cases.
6 ITA No. 1355/Kol/2018Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
8.4. As per the above referred notification, the assessee's being a company, the case fell under the jurisdiction of Commissioner of Income Tax, KolkataKolkata-III, Kolkata vide serial no. 205 of the notification. The jurisdiction of the assessee fell with the Assessing Officer being ITO ward 8(3), Kolkata, who was under the charge of Commissioner of Income tax -Kolkata Kolkata III.
8.5. The Authorities under the Income Tax, after the jurisdiction is conferred in them by virtue of notification u/s 120(1) and 120(2) of the Act, h have ave to perform their functions as per sec. 124 of the Act. Section 124 of the Act, reads as under:
124. (1) Where by virtue of any direction or order issued under sub sub-section (1) or sub-section section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction jurisdiction-
(a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal pal place of his business or profession is situate within the area, and
(b) in respect of any other person residing within the area.
(2) Where a question arises under this sect section ion as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Principal Director General or Director General or the Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner; or where the question is one relating to areas within the jurisdiction of different Principal Director General or Directors General or Principal Chief Commissioners or] Chief Commissioners or Principal Commissioners or Commissioners, by the P Principal rincipal Director General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or] Commissioners concerned or, if they are not in agreement, by the Board or by such Principal Director General or] Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, specify.
(3) No person shall be entitled to call in question the jurisdic jurisdiction of an Assessing Officer-
(a) where he has made a return under sub sub-section section (1) of section 115WD or under sub sub-section (1) of section 139,, after the expiry of one month from the date on which he was served with a notice under sub-section section (1) of section 142 or sub-section ection (2) of section 115WE or sub sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier;
(b) where he has made no such return, after the expiry of the time allowed by the notice under sub sub-section (2) of section 115WD or sub-section section (1) of section 142 or under sub sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judg judgment ment of the Assessing Officer, whichever is earlier.7 ITA No. 1355/Kol/2018
Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
(c) where an action has been taken under section 132 or section 132A, 132A after the expiry of one month from the date on which he was served with a notice under subsection (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier.
(4) Subject to the provisions of subsub-section section (3), where an assessee asses calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub sub-section section (2) before the assessment is made.
(5) Notwithstanding anything contained in this section or in an any direction or order issued under section 120,, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub sub-
section (1) or sub sub-section (2) of section 120..
8.6. The clear and unambiguous words used in section 124(1) of the Act, are that the Assessing Officer should be vested with th thee Jurisdiction by virtue of an order, notification or directions issued u/s. 120(1) or u/s. 120(2) of the Act. Therefore, only the Officer who has been vested with the jurisdiction conferred u/s 120(1) and 120(2) of the Act can act as Assessing Officer and issue notice under sec. 143(2) of the Act, since "he shall have jurisdiction" are the words as has been used in sec. 124(1) of the Act.
8.7. Even though the Assessing Officer have been vested with the Jurisdiction u/ s. 124(1) of the Act, by the Board, yyet et the assessee may dispute such jurisdiction vested u/s 124(1) of the Act, in the Assessing Officer. Such dispute can be raised u/s. 124(3) of the Act, within one month of the issue of notice u/s. 143(2) of the Act. This sub section, therefore, clearly stipulates ipulates that the assessee can dispute the jurisdiction of the Assessing Officer to issue notice even though such jurisdiction was vested in him by the direction or order issued u/ s. 120(1) or 120(2) of the Act, for some reasons.
8.8. In this case, the jurisdiction of the assessee was never vested with the Assessing Officer, Ward 33(1) , (non corporate assessee ward) who issued notice u/s. 143(2) of the Act. In fact, the assessee also filed return before ITO, WardWard-8(3), 8(3), KoIkata who was having jurisdictionn over the assessee as per the Boards Notification, which fact is evident from the copy of acknowledgements of return of income for the last few years. The notice under sec. 143(2), however, was issued in this case by ITO, Ward 33(1), Kol who has not been vested with the jurisdiction over the assessee company by CBDT.
8.9. Under the scheme of "e" filing of return, the assessee has to fill PAN on the return. It has to also fill its address and some of the details are picked picked--up by the assesse.
If the Department's ent's system fails to correctly transfer the return to the jurisdictional Assessing Officer and transfer the same to a Assessing Officer though who has no jurisdiction as per the CBDT's notification, such mistake cannot confer the jurisdiction on such an Assessing ssessing Officer. Jurisdiction can be conferred only by notification u/ s 120(1) and 120(2) of the Act only.
8.10. The Ld DR submitted that there was transfer order of the assessee's case for the assessment year in question, from ITO Ward 33(1) to ITO War Wardd 8(3). There can be a valid transfer order from ITO Ward 33(1) only if he was vested with the jurisdiction over the assessee. As he was never vested with the jurisdiction either by the notification of the 8 ITA No. 1355/Kol/2018 Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
CBDT or by any order of the Commissioner of Income tax earlier to the issue of notice u/ s 143(2) of the Act, he could not have validly transferred the case to ITO, Ward Ward-8(3), Kolkata. The file/case was restored to its jurisdictional area. When the said ITO Ward 33(1) was not having valid jurisdiction at the time of issue of notice u/ s 143(2) of the Act, then the notice is bad in law. The transfer of the folder from ITO Ward 33(1) to ITO Ward 8(3) in fact establishes that the revenue realised that the ITO Ward 33(1) had no jurisdiction.
8.11. The Ld DR also lso raised the issue that u/s 120(4) and 124(5) of the Act, there can be concurrent jurisdiction. There is no dispute over that. However there is no direction or order or notification u/ s 120(1) or 120(2) of the Act, conferring concurrent jurisdiction to the ITO Ward 33(1) along with ITO Ward 8(3) u/ s 120(1) or u/ s 120(2) of the Act, which is the condition mentioned in section 120(4) and 120(5) of the Act.
8.12. The Ld DR for the purpose of his submission also read out para 19 of the decision of ITAT in the case of Rungata Irrigation in ITA No 1224/K/2019 dated 6.9.2019. The said decisions is in favour of the assessee. The Ld CIT(DR) has relied on para 19 which is in fact in favour the assessee. The Tribunal has fully analyzed the entire provisions of section tion 120, 124 and 127 of the Act, in para 13, 14,15,17, 18, 21 of the order with regard to the issue of vesting of jurisdiction and transfer etc and held that the issue of notice by non-jurisdictional jurisdictional AO was bad in law and without jurisdiction.
8.13. The Ld DR argued that the assessee did not dispute the jurisdiction u/ s 124(3) of the Act and hence by not disputing the same, the right to challenge the jurisdiction is lost forever. This would have been so, had the ITO, Ward Ward-33(1), 33(1), Kolkata, had original jurisdiction isdiction over the assessee. This is not the case. When an authority does not have jurisdiction, then the act done by such authority is bad in law and is void ab ab-initio 8.14. This issue came up for consideration in the following cases:
(i) Rungta Irrigat Irrigation ion Ltd. referred to above with relevant paragraphs and paragraph 36.
(ii) Smriti Kedia Calcutta High Court 339 ITR page 37
(iii) Indorama Software Solutions Ltd. Mumbai Bench ITA No. 5211 and 5290(Mum) of 2011 dated 7.9.2012 8.15. In the case of Mahalch Mahalchand and Motilal Kothari & Co (ITA No. 1851/1852/Kolj2002, ITAT, D-Bench, Bench, Kol dated 28.7.2006 wherein the Tribunal considered the notification dated 30.7.2002 and held that after issue of the notification the Assessing Officer who was earlier vested the jurisdi jurisdiction ction lost the jurisdiction and even though the order of the CIT(A) was received by him at the time when he was having jurisdiction, yet the Assessing Officer who has been divested of the jurisdiction on 30.7.2002 cannot file the appeal after the said date date.. In that case even the authorization was also granted for filing the appeal by the CIT-XIII, XIII, Kolkata who lost the jurisdiction after the notification. In that case after the dismissal of the appeal of the Department by the Tribunal on the aforesaid ground of jurisdiction, the Revenue filed an appeal before the Hon'ble High Court but the same was dismissed. The Revenue thereafter came up with condonation petition and a filed fresh appeal before the ITAT but the same was also dismissed in ITA No. 1768 and 9 ITA No. 1355/Kol/2018 Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
1769/Kol/2006, B-Bench Bench on 15.9.2014. The Revenue filed an appeal before the Hon'ble High Court which was dismissed with the following observations:
"The appeal carried by theACIT theACIT-39 39 to the Appellate Tribunal was dismissed as not competent. The order of the Appellate Tribunal was challenged by the Revenue in this Court. This Court did not interfere with the order of the Tribunal and the matter rested there without this Court's order being challenged by the Revenue before the Supreme Court. In the present case case,, the matter pertains to the same assessment year when the ITO ITO-44 44 has preferred an appeal where the initial assessment was not done by the ITO ITO-44 44 but such assessment 'was conducted by the ACIT ACIT-3939 at a point of time when AC1T-39 AC1T lost jurisdiction over the a assessee ssessee pursuant to the said CBOT Notification 2002 Since there was a fundamental error, the Appellate Tribunal dismissed the appeal as incompetent since the order of the Assessing Officer who had no jurisdiction to undertake the assessment qua the assess assessee could never have been found to be legal or resurrected."
8.16. While deciding the issue in the case of Mahalchand Motilal Kothari & Co., (supra) the ITAT relied on the Judgement of Calcutta High Court in the case of "West Bengal State Electricity Board" 278 ITR 218. In that case the Hon'ble Calcutta High Court held that jurisdiction cannot be conferred by default or by agreement and tthe decision without jurisdiction is a nullity. The Hon'ble High Court also relied on a number of Judgements while arriving at such a conclusion.
8.17. The Hon'ble Allahabad High Court in the case of V.P. Electronics Corporation Ltd in ITA No. 79 of 2015 dated ated 1.3.2017 has also taken similar view wherein the provisions of sec. 124(3) were also referred to. It was held that when the notice was not issued by the competent authority, i.e an Assessing Officer having jurisdiction, then the assessment is a nullity.
8.18. In the case of Deepchand Kothari reported in 171 ITR 381(Raj) it was held that the Assessing Officer who was having no jurisdiction to initiate the proceedings then such proceedings are ab ab-intio-- void. Further the Hon'ble High Court relying on the Judgement of the Hon'ble Supreme Court in the case of Kiran Singh Vs Chaman Paswan, it was held that the Jurisdictional issue can be taken up at any stage of the proceedings, even at the time of executi execution of decree.
8.19. The ITAT, Kolkata in the case of Ganesh Reality and Mall in ITA No. 581/Kol/2017 held that if no jurisdiction was conferred on a particular authority the issue of notice or completion of assessment by such authority is illegal.
8.20. In the case of P.V. Doshi Vs CIT the Gujarat High Court held that the jurisdictional issue can be taken up at any stage of the proceedings.
8.21. In the case of Rajmandir Estates (386 ITR 162) the Hon'ble Calcutta High Court held that if the Commissioner Income tax issuing notice u/ s. 263 has lost the Jurisdiction then the notice and order issued by him is a nullity.
10 ITA No. 1355/Kol/2018Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
8.22. The Lucknow Bench of the ITAT in ITA No. 89 and 90/LKW /2015 dated 16.4.2015 in the case of Md Rizwan held that notice u/ s 143(2) iissued by non- jurisdictional Assessing Officer is a nullity.
8.23. Same view have been taken a number of other cases some of which are under:
under:-
1. A.L. Ahuja v/s. DCIT If at the time of issue of notice u/s. 158BC the SOT (2003) page 475 at page 480 Assessing ng Officer had no jurisdiction the assessment is illegal.
2. Income Tax officer vs. Sarkar & Co. 1954 If at the time of filing, of the appeal the ITO AIR 613 Calcutta. had no seisin over he assessee's case and case is transferred by the Commissioner of Income I Tax from ITO Ward-III(2) Ward to some other Officer, on the date of filing of the Appeal, the ITO Ward III(2) cannot file the Appeal and the appeal of the department rightly dismissed by the ITAT.
3. Ram Krishna Ramnath vs. Commissioner of When by notification dated 28th March, 1923 Income Tax AIR 1932 Page 65 Nagpur the powers conferred on the ITO should be exercised by the ACIT the Notice issued by the ITO was illegal
4. CIT West Bengal and another vs. Anil The decision of the Calcutta High Court in Kumar Roy Choudhury and another reported Sarkar & Co. 1954 AIR 613 Calcutta was in 66 ITR page 367 approved and held that if the case is transferred by the commissioner or The board then the income tax officer from whom the file is transferred shall have no concern with the appeal.
5. Commercial Enterprises vs. State of O Orissa Annulment of assessment is permissible 81 sales tax cases page 84 where the taxing authority had no jurisdiction to assessee.
6. Sain Baba Mohansing 90 ITR page 197 Proceedings taken by an authority who lacked jurisdiction is ab initio void.
7. Rajeevkumar eevkumar Donerria v. Asst. Only the assessing officer who at the relevant Commissioner of Income Tax 94 ITD page 344 time of filing of the appeal has the jurisdiction can file the appeal. An appeal filed by an officer who has no jurisdiction to file the appeal peal is non est. 8.24. The Hon'ble Gujarat High Court in the case of Jolly Fantasy World Ltd., Tax appeal no. 1254 of 2014,judgement dated 9.3.2015 held that there cannot be waiver of Jurisdiction, even if the assessee has participated in the proceed proceedings.
8.25. Consent cannot confer jurisdiction and if the notice issued is without jurisdiction it is invalid as was held in Resham Petrotech Ltd. ITA O. 2777/ Ahd/2011 dated 10.2.2012 8.26. The Hon'ble Bombay High Court in ITA No.127 OF 2006 in the case of The Commissioner of Income Tax Tax-I, I, Lalit Kumar Bardia, judgement dt. 11.7.2017, held that the transfer of jurisdiction subsequently cannot validate the action already taken.11 ITA No. 1355/Kol/2018
Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
8.27. The Ld. DR cited the judgement of the Hon'ble Supreme Court in the case of I - Ven Interactive Limited (Civil Appeal No. 8132 of 2019 dated 18.10.2019). This judgement is not on the issue of jurisdiction of the Assessing Officer. In that case, there is no dispute that the assessing officer issuing notice had jurisdiction over the assessee. In that case the selection of the return for scrutiny was generated under automated system of the Income Tax Department which picks up the address of the assessee from th the PAN database. The notice u/ s 143(2) was sent at the assessee's address available as per the PAN database. Intimation for further hearing and three more notices were sent at the same address as available in the PAN. Finally, the assessee appeared before the tax authority but challenged the notices saying that these notices were not served upon him and that he never received notice u/s 143(2) of the Act and that further subsequent notices served and received by the assessee were beyond the period of limita limitation prescribed under the law. The assessee submitted that he changed his address and the new address was mentioned in the return of income filed for subsequent years. The assessee also submitted that he filed Form No.18 with Registrar of Companies, regardregarding change of address. No separate intimation was given to the Assessing Officer by the assessee regarding change of address. The Court held that mere mentioning of the new address on subsequent return without specifically intimating the Assessing Officer with respect to change of address and without getting the PAN database changed, is not enough and sufficient. The court found that the assessee claimed to have filed a letter for change of address but such letter was never produced before any of the author authorities. It was held that on the facts of the case, the notice issued on the address available on the PAN data base was proper and valid service of notice u/s 143(2) of the Act. The court held that the change of address in the database of PAN is must, in cas casee of change of the name of the company and/ or any change in the registered office of the corporate office of the assessee and the same has to be intimated to the Registrar of Companies in the prescribed format i.e., Form 18 and after completing the said rrequirement, equirement, the assessee is required to approach the Department with the copy of the said document and then the assessee is required to make an application for change of address in the departmental database of the PAN. In the present case the assessee has failed to do so. This judgment is on the issue of service of notice. It is not an issue as to whether the Assessing Officer has jurisdiction over the assessee. As already stated, it is not a case of notice being issued by a non-jurisdictional jurisdictional Assessing Off Officer.
It is therefore clear that the issue in the case before the Hon'ble Supreme Court was not with regard to the jurisdiction of the officer in issuing the notice but was with regard to the service of notice on the proper address. The said judgement ther therefore does not help the department on this issue of jurisdiction now before us. Jurisdiction has to be conferred u/s 120 of the Act. Any act by an authority without jurisdiction is ab ab-initio void.
8.28. In view of the above discussion, as the Assessing Off Officer icer who had jurisdiction over the assessee i.e., ITO Ward - 8(3), Kolkata had not issued the notice to the assessee u/s 143(2) of the Act as mandatorily required under the Act, the assessment framed u/s 143(3) of the Act, is bad in law as held by the Hon' Hon'ble ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon: 321 ITR 362 (SC) . Hence we quash the same.
9. As we have held that the assessment is bad in law, in view of the non non-issual of the statutory notice u/s 143(2) of the Act by the Assessing Of Officer, ficer, having jurisdiction over 12 ITA No. 1355/Kol/2018 Assessment Year: 2010-11 C.O. No. 109/Kol/2018 A/o ITA No.1355/Kol/2018 Assessment Year: 2010-11 M/s. Boast Traders Pvt. Ltd.
the assessee, we would not go into the merits of the case as it would be an academic exercise."
7. Applying the propositions of law laid down in the above case case-law to the facts of the case on hand, we have no alternative but to uphold the order of the ld. CIT(A) and dismiss this appeal of the revenue.
8. Coming to the cross-objection objections, we find that these are in support of the order of the ld. CIT(A). As we have upheld the order of the ld. CIT(A), we dismiss the same as infructuous.
9. Before parting, it is noted that the order is being pronounced after ninety (90) days of hearing. However, taking note of the extraordinary situation in the light of the COVID-19 19 pandemic and lockdown, the period of lockdown days need to be exclu excluded for the purpose of computation of the limitation. For coming to such a conclusion, we rely upon the decision of the Co Co-ordinate ordinate Bench of the Mumbai Tribunal in the case of DCIT vs. JSW Limited in ITA No. 6264/Mum/2018 & 6103/Mum/2018, Assessment Year 2013-14, order dt. 14th May, 2020.
10. In the result, both the appeal of the revenue and the cross cross-objection are dismissed.
Kolkata, the 19th day of June, 2020.
Sd/- Sd/-
[Aby T. Varkey] [J.
J. Sudhakar Reddy]
Judicial Member Accountant Member
Dated : 19.06.2020
{SC SPS}
13
ITA No. 1355/Kol/2018
Assessment Year: 2010-11
C.O. No. 109/Kol/2018
A/o ITA No.1355/Kol/2018
Assessment Year: 2010-11
M/s. Boast Traders Pvt. Ltd.
Copy of the order forwarded to:
1. M/s. Boast Traders Pvt. Ltd
Formerly known as ACME Pvt. Ltd.
147, N.S. Road
1st Floor
Kolkata - 700 001
2. Deputy Commissioner of Income Tax, Circle - 2(2), Kolkata
3. CIT(A)-
4. CIT- ,
5. CIT(DR), Kolkata Benches, Kolkata.
True copy By order Assistant Registrar ITAT, Kolkata Benches