In the absence of any transfer order no other AO than the one who initiated the proceedings shall have jurisdiction to continue with proceedings

In the absence of any transfer order no other AO than the one who initiated the proceedings shall have jurisdiction to continue with proceedings

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI

31. So far as the argument of the Revenue that the assessee has not raised any objection to the jurisdiction within the prescribed time period is concerned, we find merit in the argument of the ld. counsel that the issue to lack of jurisdiction can be raised at any stage in a case where the return has been filed in response to notice u/s 148/158BC/153A. We find the Hon'ble Bombay High Court in the case of Mavany Brothers vs. CIT (supra) while adjudicating an identical issue has observed as under:-

“13. We have considered the rival contentions. The jurisdiction under Section 147/148 of the Act is an extra ordinary jurisdiction and can only be exercised when condition precedent as provided in Sections 147/148 of the Act are satisfied. It is the appellant’s case that the aforesaid conditions are not satisfied inasmuch as in the absence of the Assessing Officer having the original return of income available it would not be possible for him to have a reasonable belief that income chargeable to tax has escaped assessment. This issue of jurisdiction according to the respondent - Revenue could only have been raised before the Assessing Officer and not having been raised before him, the appellant had waived its rights to raise the same. The appellant having submitted to the jurisdiction of the Assessing Officer cannot now challenge the same. This is not entirely correct. It is well settled that mere acquiescence will not give jurisdiction to an authority who has no jurisdiction. In fact this Court in CIT V/s. ITSC reported in 365 ITR 87 has held that mere participation by a party in proceedings without jurisdiction will not vest/confer jurisdiction on the authority. Reason to believe that income chargeable to tax has escaped assessment is a jurisdictional fact and only on its satisfaction does the Assessing Officer acquire jurisdiction to issue notice. Thus this lack of satisfaction of jurisdictional fact can never confer jurisdiction and an objection to it can be raised at any time even in appeal proceedings. The mere fact that no objection is taken before the Assessing Officer would not by itself bestow jurisdiction as the Assessing Officer. Such an objection can be taken in appeal also. Moreover, the Apex Court in its recent decision in Kanwar Singh Saini V/s. High Court Of Delhi reported in 2012(4) SCC 307 has held that it is settled position that conferment of jurisdiction is a legislative function and cannot be conferred by consent of petitioner. An issue of jurisdiction can be raised at any time even in appeal or execution. Reliance in this regard could usefully be made to Indian Bank v/s Manilal Govindji Khona reported in 2015 (3) SCC 712. Paras 22 of the said judgment read as under :

“22. In Sushil Kumar Mehta case [Sushil Kumar Mehta v. Gobind Ram Bohra, (1990) 1 SCC 193] this Court has elaborately considered the relevant factual and legal aspect of the case and has laid down the law at para 10, after referring to its earlier decision of a four-Judge Bench of this Court speaking through Venkatarama Ayyar, J. in Kiran Singh v. Chaman Paswan [AIR 1954 SC 340 : (1955) 1 SCR 117] , which would be worthwhile to be extracted as under: (Sushil Kumar Mehta case [Sushil Kumar Mehta v. Gobind Ram Bohra, (1990) 1 SCC 193] , SCC p. 199)

6. “10. … ‘6. … It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties. If the question now under consideration fell to be determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was coram non judice, and that its judgment and decree would be nullities.’ (Kiran Singh case [AIR 1954 SC 340 : (1955) 1 SCR 117] , AIR p. 342, para 6)”

Thus, it is open to the petitioner to raise the issue of jurisdiction before the appellate authorities.”

32. In view of the above discussion and considering the fact that the assessee was employed with Delhi Police and was regularly filing his return of income at Delhi under ITO, Ward 64(3) [earlier ITO, Ward 40(3)] and since this fact was known to the ITO at Gurgaon, therefore, in absence of any transfer of jurisdiction u/s 127, we hold that the ITO, Gurgaon has no jurisdiction over the assessee. Therefore, respectfully following the decision of the Hon'ble Punjab & Haryana High Court, which is the jurisdictional High Court in view of the assessment order being passed by the ITO at Gurgaon, we hold that the Assessing Officer, Gurgaon had no jurisdiction over the assessee to issue notice u/s 148 and consequently pass the order u/s 147/143(3). Therefore, the notice issued u/s 148 is quashed. Since the reopening is quashed the subsequent orders passed on account of such reopening are also quashed. 33. So far as the decisions of the Hon'ble Delhi High Court relied upon by the ld. DR, are concerned these decisions in our opinion are not applicable to the facts of the present case. In the case of Abhishek Jain (supra), we find the Assessing Officer, Noida had issued notice u/s 148 on the basis of deposits made in cash in ICICI Bank, Noida. The fact that this assessee was regularly assessed in Delhi was not intimated to the Assessing Officer at Noida and the assessee had not mentioned his PAN in the ICICI Bank and the address of the assessee was also in Noida. After the completion of the time barring period which is 31st March, 2016, the assessee intimated on 19th May, 2016 that he had been regularly assessed in Delhi. Under these circumstances, the Hon'ble Delhi High Court held that it was mala fide on the part of the assessee not to intimate prior to 31.03.2016 and the assessee was waiting for time limitation to expire and, therefore, the Hon'ble High Court held that in terms of section 124(3)(b), the jurisdiction of an Assessing Officer cannot be called in question by an assessee after the expiry of one month from the date on which he was served with a notice for reopening of assessment u/s 148. However, in the instant case, the assessee had enclosed the copy of return filed with the Assessing Officer of Delhi with his PAN and acknowledgement number. It was in the knowledge of the Assessing Officer of Gurgaon that the assessee is in employment of Delhi Police and his PAN is linked with ITO of Delhi. Further, there was ample time available before the Assessing Officer for verification and consequential issue of notice by the Assessing Officer of correct jurisdiction and no mala fide intention can be attributed to the present assessee. 34. Similarly, in the case of S.S. Ahluwalia (supra) is concerned, in that case also the respondent assessee was assessed at Delhi from 1980-81 to 1983-84. From the assessment year 1984-85 to 1987-88, he was filing the return at Dimapur. The case of the assessee was reopened u/s 148 by the ACIT, Investigation, Delhi, on the basis of certain CBI search. When the question of jurisdiction issue came before the Hon'ble High Court, the Hon'ble High Court held that in case the assessee shifts his residence or place of business or work, etc., the Assessing Officer of the place where the assessee has shifted or otherwise will have jurisdiction and it is not necessary that in such case an order u/s 127 is required to be passed. While going through para 51 of the order, it shows that at clause 8 of para 51, there was exchange of correspondence between the ITO of Delhi and ITO of Dimapur and ITO Dimapur considered and accepted that for assessment year 1984-85 to 1987-88, the Assessing Officer at Delhi had jurisdiction to initiate and complete the assessment proceedings. Similarly, order u/s 127 of the Act was passed and the case was transferred to ITO, Ward 20, New Delhi. Thus, the case of S.S. Ahluwalia (supra) cannot be equated with that of the assessee. In any case, since the Assessing Officer of Gurgaon has passed the assessment order, who falls under the jurisdiction of Punjab & Haryana High Court, therefore, the decision of Hon'ble Punjab & Haryana High Court will prevail over the decision of the Hon'ble Delhi High Court. If the assessment proceedings already completed by Assessing Officer are to be reopened or if the income for the relevant assessment year is to be reassessed, it is the ITO who assessed the same in the first instance has the jurisdiction to proceed in the matter u/s 147 read with section 148 unless the case has been transferred by a competent authority to another Assessing Officer u/s 127 and, in that event, latter will have jurisdiction to proceed. Thus, in the absence of any transfer order, no other Assessing Officer than the one who initiated the proceedings or completed the assessment shall have jurisdiction to continue with the proceedings or even to reopen a concluded assessment. Since in the instant case the assessee was regularly filing his return with ITO at Delhi and since no transfer order u/s 127 of the IT Act, 1961 was passed transferring the case to ITO, Gurugram, therefore, only the ITO, Delhi had jurisdiction to issue notice u/s 147 and the ITO, Gurugram has no jurisdiction to issue notice u/s 148 to the assessee. [caption id="attachment_86264" align="aligncenter" width="391"] In the absence of any transfer order no other AO than the one who initiated the proceedings shall have jurisdiction to continue with proceedings[/caption] 35. In view of the above discussion, we hold that the notice issued by the Assessing Officer at Gurgaon is void ab initio on account of lack of jurisdiction. Therefore, the proceedings are quashed. Since the assessee succeeds on this legal ground, the various other grounds on merit are not being adjudicated being academic in nature. Since the legal ground raised by the assessee challenging the reassessment proceedings are decided in favour of the assessee, the grounds raised by the Revenue in its appeal become infructuous and the same is accordingly dismissed. ITA Nos.2683/Del/2018 & 3112/Del/2018 (Shri Devender Kumar vs. ITO and vice versa) AND ITA Nos.2684/Del/2018 & 2700/Del/2018 (Shri Parvinder Kumar vs. ITO and vice versa) 36. After hearing both the sides, we find the grounds raised by the respective assessees and the Revenue in the above appeals are identical to grounds raised by the assessee and Revenue in ITA Nos.2682/Del/2018 & 2913/Del/2018. We have already decided the issue and the legal ground raised by the assessee challenging the validity of the reassessment proceedings have been decided in favour of the assessee. Accordingly, the appeal filed by the assessee has been allowed and the appeal of the Revenue has been dismissed. Following similar reasonings, the appeals filed by the assessees are allowed and the appeals filed by the Revenue are dismissed. 37. In the result, all the three appeals filed by the assessees are allowed and the appeals filed by the Revenue are dismissed. The decision was pronounced in the open court on 08.08.2019. To Download Copy of Order – Click Here For Regular Updates Join : https://t.me/Studycafe Click Here to Buy CA INTER/IPCC Pendrive Classes at Discounted Rate Tags : Judgement, Appellant Tribunal, Income Tax