IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "A" NEW DELHI
BEFORE SHRI R.P. TOLANI AND SHRI T.S. KAPOOR
ITA Nos. 1708 to 1713/Del/11
Asstt. Yrs: 1996-97 to 2001-02
Deepak Gupta Vs. ACIT, Circle Noida. 6/110, Sector-2, Rajinder Nagar,
Sahibabad, Distt. Ghaziabad.
PAN/ GIR No.AFCPG9026R
ITA No. 1562/Del/11
Asstt. Yr: 2002-03
Smt. Alka Tiwari Vs. ACIT, Circle Noida. E-58, Sector 39, Noida.
PAN/ GIR No.ACGPT6725M
( Appellant ) ( Respondent )
Appellants by : Shri T.R. Talwar Adv. Shri Salil Agarwal Adv.
Shri R.P. Mall Adv.
Respondent by : Shri Dev Jyoti Das CIT (DR) & Shri C.B. Singh Sr. DR
PER R.P. TOLANI, J.M::
This is a group of appeals in the cases of two assessees. ITA nos. 1708 to 1713/Del/2011 have been filed by Shri Deepak Gupta against separate orders of ld. CIT(Appeals) relating to A.Y. 1996-97 to 2001-02. ITA no. 1562/Del/11 has been preferred by Smt. Alka Tiwari against ld. 2
CIT(Appeals)'s order dated 4-2-2011 relating to A.Y. 2002-03. All these appeals are heard together and disposed of by a consolidated order for the sake of convenience.
2. We first take up the appeals by Shri Deepak Gupta. One common ground raised challenges the validity of jurisdiction of reassessment proceedings by ACIT, Noida u/s 147/148. The orders are assailed , mainly on the ground that assessee was already assessed by ITO Ward-32(2), New Delhi and ACIT Noida has no jurisdiction to issue these notices u/s 147/148 and the subsequent transfer of jurisdiction dated 9-3-2004, is in contravention of Sec. 127, as statutory opportunity of hearing was not given to assessee. These issues have been raised by following grounds:
"On the facts and circumstances of the case the learned CIT(A) has erred:-
1. In confirming the order of the ACIT Circle Noida passed u/s 144/147 who lacked jurisdiction to issue notice u/s 148 dated 27-3-2003 for A.Y. 1996-97 to 2001-02 & 31-3-2003 for A.Y. 2002-03 and subsequent proceedings u/s 142(1) in pursuance thereto, before the transfer of jurisdiction over the assessee from Delhi to Noida w.e.f. 9-3-2004, thus making the order of reassessment passed by the AO Noida illegal/ ab initio void, as no notices u/s 148 were issued to the assessees after 9- 3-2004 when the jurisdiction over the assessee's case was transferred from ITO Ward 33(2) to ACIT Noida.
2. In ignoring the Chief Commissioner of Income tax Meerut letter dated 3-3-2004 regarding the jurisdiction status of the assessee in Delhi & the need to get the jurisdiction transferred over the assessee from Delhi to Noida under specific order u/s 127 by the CIT Delhi, which was subsequently passed on 9-3-2004.
3. In ignoring that the jurisdiction over the assessee lied with ACIT Circle Noida being the Director of M/s Auram Jewellery Pvt. Ltd., running its business activities from 167, NEPZ, Phase II Noida although the company s registered with ROC Delhi & Haryana, having registered office in Delhi, being controlled by the Directors from Delhi and filing its income tax returns in Delhi.
4. The order passed u/s 127 of the Income Tax Act dated 9- 3-2004 by the learned CIT-XI, New Delhi transferring jurisdiction over the appellant from ITO Ward 33(2) New Delhi to ACIT Noida is bad in law for lack of opportunity of hearing given to the appellant prior to the transfer of jurisdiction.
5. On merits, the grounds challenge following additions:
A.Y. Assessed Relief given After effect of by AO By CIT(A) CIT(A)'s order 1996-97 5,90,000 1,90,971 3,99,029 1997-98 2,03,70,630 Nil 2,03,70,630 1998-99 4,82,000 Nil 4,82,000 1999-2000 8,22,173 7,26,000 96,000 2000-01 2,22,000 96,000 1,26,000 2001-02 4,74,000 96,000 3,78,000
3. Learned counsel for the assessee vehemently argues that following is the order u/s 127(2) passed by CIT-XI, Delhi dated 9-3-2004, around whom the cases of both the assessee revolve. This order will demonstrate that ACIT Noida had no jurisdiction whatsoever to issue notices u/s 147/148 dated 27-3-2003. And no opportunity of hearing prescribed by Sec. 127(2) was given while transferring assessee's jurisdiction from one city to another. 4
Office of the
Commissioner of Income Tax
Delhi-XI, New Delhi
Dated: 9th March, 2004.
ORDER UNDER SECTION 127(2) OF THE INCOME TAX ACT, 1961
In exercise of powers conferred by Section 127 of the Income tax Act, 1961 and other powers enabling me in this behalf, I, the Commissioner of Income-tax Delhi-XI, New Delhi hereby transfer the case, the particulars of which are mentioned in Column Nos. 1 and 2 of the Schedule hereunder from the Assessing Officer mentioned in Column no. 3 to the Assessing Officer mentioned in Column no. 4 of annexure below:- Name of Address From To the
Shri 205, Kamal ITO ACIT, Deepak Plaza Ward- Noida. Gupta Building, 33(2), Karol Bagh, New
New Delhi Delhi.
This order has been passed for coordinated post search assessment with immediate effect.
(Commissioner of Income Tax)
Delhi-XI, New Delhi.
3.1. A perusal of the order u/s 127(2) and record clearly reveals that: (i) It has not been disputed by department that prescribed opportunity of hearing before transfer was not given to assessee. (ii) Even if unsustainable transfer is assumed to be correct then the jurisdiction was vested in ACIT, Noida w.e.f. 19-3-2004. Notice 5
u/s 147/148 were issued prior to that date i.e. 9-3-2003 & 31-3- 2003 (AY 2202-03)
(iii) From the address given in the order it is clearly revealed that Shri Deepak Gupta was assessed by ITO, Delhi with residential address at Karol Bagh, Delhi. This order has not been disputed by the department.
(iv) Therefore, a plain perusal of this order clearly reveals that prior to 9-3-2004 assessee was assessed by ITO, Ward-33(2), New Delhi. 3.2. These impugned 148 notices in this case were issued by the ACIT Noida on 27-3-2003 for A.Y. 1996-97 to 2001-02 & on 31-3-2003 for A.Y. 2002-03, which are prior to the purported date of transfer of the jurisdiction from Delhi to Noida. This 127(2) order is also unsustainable because no statutory opportunity of hearing before transfer was accorded and these income-tax offices are situate in 2 different cities. 3.3. Section 127 is a mandatory section which confers jurisdiction on the AO, vesting him with the power of assessment, reassessment and other proceedings. If the assessee is already assessed at any city i.e. Delhi the jurisdiction for issuing 148 notices vests with ITO, Delhi and not ACIT, Noida.
3.4. From the record and departmental stand, there is no room for any doubt that, till the purported order u/s 127(2), the jurisdiction validly vested with ITO, Delhi. In the instant case, notices u/s 148 undisputedly were issued by ACIT, Noida on 27-3-2003 i.e. prior to the purported transfer of jurisdiction. These notices issued without lawful authority are ab initio void and all the consequent proceedings are also bad in law. 6
3.5. Besides the 127(2) order also is invalid as no opportunity of hearing was given for transfer of jurisdiction from Delhi to Noida.
3.6. It is pleaded that the assessee objected to 148 notices in writing by letter dated 21-7-2003, representing that that he was assessed at Delhi and ACIT, Noida had no jurisdiction to issue notices u/s 148. No cognizance of sec. 124(4) also was taken. The same objections were sent to CIT, Ghaziabad on 27-7-2003 and 21-1-2004. Neither the ACIT Noida nor CIT took any further steps to redeem the proceedings by requesting CIT, New Delhi for a valid transfer of jurisdiction from Delhi to Noida. Similarly they did not send the information in their possession to AO/CIT, New Delhi to initiate valid proceedings u/s 147/148. Thus for unknown reasons ACIT, Noida wantonly vested himself with jurisdiction in disregard of law.
3.7. The assessee's case gets strength from the fact that CIT, Meerut in his letter dated 3-3-04 to CIT Noida emphasized the need for a valid order for transfer of inter charge jurisdiction, which is as under: F.No. CIT-Tech./Approval/2003-04/Scrutiny/V-1529 Office of the
Chief Commissioenr of Income tax, Meerut
The Commissioenr of Income Tax
Sub:- Jurisdiction- Proposal for transfer of records of M/s Auram Jewellery Export Pvt. Ltd., 167, NEPZ, Noida and Sh. Deepak Gupta & Smt. Urmila Gupta -Reg.
Kindly refer to your letter dated 20-01-2004 and the queries raised by this office dated 25-01-2004 to ACIT, Noida. In this regard, I am directed to convey the following:- 7
ACIT, Noida assumed jurisdiction over M/s Aurum Jewellery Export Pvt. Ltd., 167, NEPZ Noida by virtue of issue of notice u/s 148 dated 27-03-2002 for A.Y. 95-96.
Thereafter in case of Mr. Deepak Gupta notice u/s 148 for the A.Y. 1996-97 to 2001-02 and notice u/s 142(1) for A.Y. 2002- 03 were issued on 27-3-2003 and in the case of Smt. Urmila Gupta also notice u/s 142(1) for the A.Y. 2002-03 was issued on 27-03-2003. from the perusal of the record it is seen that these notices were served by affixture and there was no regular service of notices.
However prior to this, as reported by ACIT Noida, Sh. Deepak Gupta and Smt. Urmila Gupta have been filing returns regularly in the respective wards at Delhi. The information in this regard was communicated to ACIT, Noida and the same is as follows: Name of the A.Y. Date of filing Ward/ Circle Assessee the return
Sh. Deepak Gupta 00-01 26-09-2000 Ward-33(2),Delhi -do- 01-02 20-09-2001 -do- -do- 02-03 10-09-2002 -do- Smt.Urmila Gupta 00-01 29-09-2000 Ward-27(4),Delhi -do- 01-02 26-09-2001 -do- -do- 02-03 08-10-2002 -do- From the above facts it is obvious that Sh. Deepak Gupta & Smt. Urmila Gupta had voluntarily submitted themselves to the jurisdiction of Delhi charge much before ACIT, Noida assumed jurisdiction over the case of Auram Jewellery Pvt. Ltd. The report of ACIT, Noida also confirms the facts that ITO Ward 33(2), Delhi and Ward-27(4), Delhi have confirmed their jurisdiction over the case of Sh. Deepak Gupta & Smt. Urmila Gupta respectively. Moreover, as of now there is no business activity in the company and the Directors are not receiving any remuneration. Therefore automatic assumption of jurisdiction of the Directors only by virtue of facts that company is assessed in Noida, does not hold good ground.
Considering these facts the ACIT, Circle Noida should not automatically assume jurisdiction over the case of Sh. Deepak Gupta & Smt. Urmila Gupta. The inter charge change of jurisdiction between two regions requires concurrence of the concerned Commissioners and specific order u/s 127 of Income 8
Tax Act, 1961 by the concerned CCIOT having present jurisdiction of the case in Delhi, needs to be passed. Yours faithfully,
Addl. Commissioner of Income Tax (HQ)
Copy to the Addl. Commissioner of Income Tax Noida for information and necessary action.
Addl. Commissioner of Income Tax (HQ)
3.8. ACIT Noida, subsequent to this letter requested CIT Ghaziabad for transfer the jurisdiction of the assessee's case from CIT, New Delhi to CIT, Ghaziabad and assign the jurisdiction to the ACIT Circle, Noida. It clearly demonstrates that transfer of jurisdiction was belatedly requested by ACIT, Noida himself after 3-3-2004. The jurisdiction was thereafter transferred within 5 days by above order u/s 127(2) on 9-3-2004 from one city to another without giving opportunity of hearing prescribed by Sec. 127(2)(a). 3.9. It is further emphasized that despite this legal position, ACIT, Noida arbitrarily proceeded with invalid 148 notices and framed the impugned ex parte assessments on 22-3-2004 in the case of Deepak Gupta and on 29-3- 2005 in the case of Smt. Alka Tiwari.
3.10. Thus all the 148 notices issued on the assessee are prior to the date of the purported transfer of jurisdiction and ab initio void and ACIT Noida had no jurisdiction to issue such notices u/s 148 and frame the impugned ex parte assessments. Consequently, all these notices and assessments being bad in law ab initio void deserve to be quashed. In this backdrop ld. counsel contends that assessee was filing his return of income for following years with ITO Delhi.
S.No. Asstt. Yr. Date of filing
Of return in
1. 1993-94 28-3-1994
2. 1994-95 18-2-1995
3. 1995-96 15-11-95
4. 1996-97 17-1-1997
5. 1997-98 22-2-1998
6. 2000-01 26-9-2000
7. 2001-02 20-9-2001
8. 2002-03 10-9-2002.
3.11. The assessee was consecutively assessed at Delhi for number of years, is demonstrated by these undisputed facts. Unfortunately sort of dispute erupted between assessee and one high rank officer of the Income-tax Department Shri Bani Singh S/o Ram Lal. Due to impending disputes officer started causing trouble for the assessee and as he could not influence the Income-tax Authorities at Delhi, efforts were made through Noida CIT by issuing these notices u/s 148. The assessee went on objecting to the jurisdiction and communicating to the departmental authorities about the arbitrary acts of ACIT, Noida and his inability to submit to this illegal jurisdiction. Assessee's objections were ignored and this led to arbitrary ex parte assessments, creating huge demand. Since the assessee could not get the justice from the department, he was constrained to approach the Hon'ble Allahabad High Court by way of civil writ petitions no. 1023 of 2004/ 6295 of 2004 against various income-tax authorities, including the said Shri Bani Singh. Hon'ble Allahabad High Court directed the Director General (Inv.) and Director General (Vigilance) by respective orders to dispose of the assessee's representation containing objections for the transfer of jurisdiction and the harassment being met to the assessee. The Director General (Inv.) vide order dated 19-10-2004 though took a stand that 10
he was not supervising/ controlling officer and reporting only to the Member (Inv.) CBDT and had no control over this matter; however, without referring to the assessee's objections, it was held, the petitioner's assessments are being properly framed by the officers of Noida falling in the jurisdiction of CIT, Ghaziabad. It was further held that DG((Inv.) had no reasonable ground to set up inquiry against any of the officers i.e. ACIT Noida and other respondents in the writ petition as they were not under his control and supervision. Thereafter, Hon'ble Allahabad High Court by an order dated 30th March 2010 again directed the CIT(A) to consider and decide petitioner's appeals expeditiously and preferably within a period of two months from the date of receipt of the certified copy of the order. CIT(A) was specifically directed to consider and adjudicate the question with reference to the jurisdiction of the ACIT, Noida, as raised by the assessee.
3.12. Assessee again vide letter dated 12-1-2004 requested ACIT, Noida to transfer his case to correct jurisdiction i.e. AO, New Delhi, which is as under:-
The Assistant Commissioner Income Tax
Sector 20, Noida.
Subject: Transfer my case from Noida to Delhi Income tax Department and also release the seized properties.
In reference to the above captioned matter, I wish to state that my account of the Citizen Bank, Noida was seized and further issued a noticed under section 148 to the Income tax Act, in 11
which you have asked for copy of Income tax return and various other details. In compliance of that notice I provided the copy of the Income Tax Return duly filed at Delhi in Ward no. 33(2) with a request that since I am filing my income tax return at Delhi regularly therefore, transfer my case to Delhi income tax department.
On subsequent hearing you informed to my counsel that you have sent your recommendations to transfer the case from Noida to Delhi for approval of commissioner of income tax but till date I have not received any information regarding that.
As per the Law of Income Tax Act prevailing in India, the assessee has to file the Income Tax Return at one place and the department has to assess him at that place only. According to this also the assessment of my case should be done by the Assessing Officer of Ward no. 33(2), where I am regularly filing my Income tax return.
Since I am filing my income tax return and assessed at Delhi in ward no. 33(2), the copy of same is again attached for your kind reference therefore once again you bare requested to send my case to Delhi where I am filing my income tax return and assessed regularly, otherwise I ha no choice to move to the High Court for transfer of my case, release the seized properties as well as against illegal harassment made to me by the Income Tax Department, Noida.
6/110, Sector-2, Rajender Nagar,
Copy to :
1. The Commissioner Income Tax Ghaziabad.
2. The director General Income Tax Investigation, Income Tax Office (Aykar Bhawan) 5th Ashossssssssk Road, Lucknow. 12
3.13. Interestingly for A.Y. 2002-03, ACIT, Noida himself dropped assessment proceedings by following order dated 29-12-2004:
"29-12-2004: In this case, the proceedings u/s 142(1) were initiated on 27-3-2003 on the basis of the information received from ADIAT (Investigation), Ghaziabad vide his letter dated 24-3-2003. After issue of above notice, the query letters asking certain details as well as evidence for filing the income tax return were issued from time to time as the assessee could not comply the requirement of the notice u/s 142(1) dated 27-3- 2003. Subsequently, it has been informed by the assessee that he used to file the return of income with ITO, Ward-33(2), Delhi vide acknowledgement no. 8046 dated 10-9-2002 at the income of Rs. 1,02,540/-. The jurisdiction over the assessee has been assigned u/s 127 of the Income Tax Act from ITO, Ward- 33(2), New Delhi to the Undersigned (ACIT, Circle, Noida) vide order dated 29th March 2004 by the Commissioner of Income Tax, Delhi-XI, New Delhi. Since the return was filed by the assessee prior to issue of notice u/s 142(1), therefore, the proceedings initiated vide notice dated 27-3-2002 are hereby dropped as the same become infructuous. However, the proceedings u/s 147 if required shall be initiated separately. Sd/-
Asstt. Commissioner of Income Tax
3.14. CIT(A) thereafter by order dated 7-2-2011 though admitted that the assessee has been filing the returns of income till A.Y. 2002-03 with Ward 33(2), New Delhi. Nevertheless it was arbitrarily held that ITO, Ward 33(2) assumed jurisdiction on wrong representation of facts by assessee, therefore, the jurisdiction of AO, Delhi was ab initio illegal and that of ACIT, Noida valid. While ld. CIT(Appeals) projected as if assessee was non cooperative with ACIT, Noida and misrepresented facts before Hon'ble High Court, 13
without appreciating that assessee was consistently objecting to illegal jurisdiction, had no legal obligation to surrender himself to it in order to avoid anticipated harassment.
3.15. Though on one hand in assessee's case it is being held that: (i) there is no necessity of giving opportunity of hearing to assessee for transfer of case record from one city to another; (ii) Delhi and Ghaziabad are practically same city. On the other hand while transferring the jurisdiction of assessee's wife Smt. Urmila Gupta in similar order u/ 127(2) dated 16-3-2004, CIT Delhi notice of hearing was given which is evident from the order. 3.16. CIT(A) in the appellate order dated 7-2-2011 held that ACIT, Noida had valid jurisdiction over the assessee on following considewra tions: (i) Without refuting assessee's claim that no 148 notice dated 27- 3-2003 was not served on him. It has been held that as per I.T. Law and Civil Procedure Code, notice u/s 148 is deemed to be served on 27-3-2003 on the assessee; and Shri Deepak Gupta should have objected on the issue of jurisdiction at the most by 27th April, 2003. As no such objection was raised by him within the stipulated time, jurisdiction of ACIT, Noida can not be challenged.
(ii) As an abundant precaution, the AO took all pains to get the assessee's case transferred from ITO Ward 33(2) Delhi to him. In exercise of power conferred by sub-section (2) of section 127 of the I.T. Act, 1961 and other powers enabling him in this behalf the Commissioner of Income Tax Delhi XI, New Delhi has transferred the case of Shri Deepak Gupta under the jurisdiction of the present AO w.e.f. 9-3-2004. 14
(iii) The exercise of transferring the jurisdiction of the assessee with the present AO was done before passing of the assessment order although it was not required. Further the contention of the appellant that he was not given an opportunity before passing of order u/s 127 of Act dated 09-03-2004 by CIT XI, New Delhi for filing objections to the transfer of his case from Delhi to Noida has no relevance particularly in light of the fact that the appellant was admittedly having its principal place of business activities at Ghaziabad only and no business was conducted from Delhi.
(iv) It is also observed that the appellant was fully aware of the fact that ACIT, Noida was proceeding to complete appellant's assessment and it was in appellant's knowledge that his case would be centralized with him but he could not furnish any justification of assuming jurisdiction in Delhi either before the ADIT(Inv.) or AO or even during appellate proceedings. (v) Further, opportunity is not needed even in view of section 127(3), which reads as under:-
"127(3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place."
Noida and Delhi are, for all practical purposes, same locality or place and hence, in spirit, if not in letters, the assessee's jurisdiction was being transferred from one AO to another at same place. From this angle also, 15
opportunity was not really needed to be given to the assessee.
Thus the contention raised by the appellant regarding the same has no force and is hereby rejected."
(vi) Two facts are given importance, namely, the AO Noida was having territorial jurisdiction over the area where the assessee was conducting his business and secondly in view of section 124(3)(b), the assessee, Shri Deepak Gupta, could have questioned the jurisdiction of ACIT, Noida within the time limit of 30 days from the service of notice u/s 148 i.e. latest by 27- 04-2003. However, Shri Deepak Gupta neither filed any return nor filed any letter of objection regarding jurisdiction within the stipulated period.
(vii) Order of DGIT (Inv.) Lucknow clearly held that ACIT, Noida had valid jurisdiction over assessee.
(viii) Assessee's bank a/cs have Noida address and assessee had used Noida address also.
(ix) Reliance was placed on M/s Amulya General Trading & Agencies Ltd. Vs. ACIT (1998) 65 ITD 329 (Del.), observing as under:
"Section 124, read with section 120, of the Income tax act, 1961 - Income-tax authorities - Jurisdiction of - Assessment years 1988-89 to 1992-93 Assessee - company was not only carrying on business at Delhi but also had its head office there. No material was available to show that it had earned any part of its income at Ghaziabad - it filed returns before Assessing Officers at Delhi and Ghaziabad - pm 14-02-1996, order u/s 124(2) was passed by Chief Commissioner, Delhi in connection with assessment year 1986-87 assessing jurisdiction over 16
assessee company to Assessing Officer, Delhi- For years under consideration. Assessing Officer, Delhi passed assessment orders on 08-03-1996 in pursuance to notice u/s 148 issued on 17-01-1994, that is prior to passing of jurisdiction order. Assessee challenged assessment orders on grounds that (i) prior to passing of jurisdiction order Assessing Officer, Delhi had no jurisdiction to issue notices u/s 148 and complete assessments, (ii) assessment orders for some assessment years had already been passed at Ghaziabad long before 14-02-1996, and (iii) jurisdiction order was invalid as it was passed without consent order by Chief Commissioner, Kanpur- Whether, since assessee carried on business activities and had head office at Delhi, territorial jurisdiction over its case vest ed with Assessing Officer, Delhi especially when assessee had challenged jurisdiction at Ghaziabad and had requested Chief Commissioner, Kanpur for transfer of tis case from Ghaziabad to Delhi - Held yes".
Whether, therefore, any specific order of Chief Commissioner, Kanpur transferring case of assessee to Delhi was required - Held, no- Whether jurisdiction order u/s 124(2) dated 10-04-1996 was a valid order as oral consent from Chief Commissioner, Kanpur had been obtained - Held, yes- Whether, in view of fact that Assessing Officer, Delhi had already got territorial jurisdiction over assessee, notices u/s 148 issued prior to passing of said order were not invalid and, therefore, assessment orders passed 08-03-1996 at Delhi were the only valid assessment orders- Held, yes".
3.17. Ld. counsel contends that the findings given by AO & CIT(A) are contrary to law and facts on record as:
(i) Assessee was not served with notice u/s 148 dated 27-3-2003. No proof of service is ever produced by department. Thus assessee at the first available opportunity on the knowledge about 148 notice 17
submitted that first notice dated 27-3-2003 was not served on the assessee. This is clear from the record that again notice u/s 148 was issued on assessee on 17-7-2003 through Inspector, which was also not received by it. If there was a properly served notice u/s 147, why would AO issue another 148 notice on 17-7-2003. On coming to the knowledge of these proceedings, assessee objected on 21-7-2003 itself pointing out that he was assessed at Delhi and ACIT, Noida had no jurisdiction. The same objection was sent to CIT, Ghaziabad also. None of the authorities ever examined these objections. It is wrong on the part of ld. CIT(Appeals) to hold that 148 notice dated 27-3-2003 was received by the assessee. Without verifying the fact about service on the assessee, the service has been deemed because notices were issued. It has been held that assessee should have objected to the jurisdiction by 27-4-2003, ignoring that assessee had filed proper objections with all the details about the non service of notice before various competent authorities. Authorities knew that the assessee was assessed at Delhi, however deliberately did not even consider the statutory objections raised by the assessee and no step was taken to correct their mistake by either transferring the material available with them to AO, Delhi or immediately asking the CIT, Delhi to transfer jurisdiction to ACID, Noida.
(ii) It is a case where department is sitting silent over the specific objections raised by the assessee and to rub salt to the injury it is being accused, that assessee did not object to the jurisdiction by 27-4-2003, thus ACIT, Noida is vested with the jurisdiction. It is being conveniently forgotten that even in case assessee does not 18
object, sec. 124(3) is not applicable to assessee inasmuch as the assessee has already submitted his return of income for A.Y. 1996- 97 on 17-1-1977 and for subsequent years as mentioned above. In such cases even sec. 124(3) does not postulate 148 being issued by another office. Looking from any angle this finding of ld. CIT(Appeals) about deemed service and belated objections are unjustified. In the absence of a valid transfer order by competent authority and without considering the assessee's objections, ACIT, Noida on his own could not have proceeded against assessee. 3.18. The reference to sec. 127(4) is totally irrelevant inasmuch as there is no whisper of transfer of the assessee's record from ITO Delhi prior to 9th March 2004 and without a valid transfer order, albeit wrong order also ACIT, Noida could not have issued impugned notices u/s 148 dated 27-3- 2003 and wily inly vested himself assessing jurisdiction that too ignoring the objections of the assessee.
3.19. Apropos third finding, ld. counsel contends that ACIT, Noida took no pains for valid transfer of jurisdiction. Rather he slept on the legal procedure and assessee's objections. The transfer order again is bad in law as mandatory requirement of opportunity of being heard ws not given Reliance is placed on:
- Melco India Pvt. Ltd. & others V. CIT (2003) 260 ITR 450 (Del);
- Anand Kumar Arya V. CIT (2009) 314 ITR 324 (Cal) - Singhal Enterprises Pvt. Ltd. Vs. CIT (2009) 315 ITR 246 (Cal) - Anil Kumar Kohari Vs. UOI (2010) 39 DTR 19 (Gau). 3.20. The clear scheme of Income-tax Law provides that when an officer has jurisdiction over the assessee, the same cannot be transferred and assumed by another officer unless there is an appropriate order passed by the 19
Competent Authority transferring the jurisdiction from one city to other after giving an opportunity of hearing to assessee. 3.21. Coming to the reliance on the order of DGIT (Inv.), reliance is wholly misplaced as DGIT (Inv.) himself has observed in his order that he had no role in deciding the issue of jurisdiction and on one hand expressed his inability surprisingly various adverse observations have been made against assessee . When the DGIT (Inv.) himself accepted that he has no power to decide the issue of jurisdiction and he reports only to the Member(Inv.), CBDT, any adverse reference or mention in the order against assessee is without any justification. CIT(A)'s reliance on his order is misplaced and self contradictory.
3.22. Coming to the observation that Noida and Delhi for all practical purposes are same locality and place, it is vehemently argued that ld. CIT(A)'s findings have no legs to stand and they are self contradictory. Income-tax department itself regards Delhi and Noida as two different geographical locations in terms of city and state, as the Noida comes under U.P. state. As per the departmental hierarchy there are separate CCIT as they are treated as two different charges, therefore, there is no merit in CIT(A)'s finding. The I.T. Act has a clear statute on this issue which cannot be interpreted on the basis of practical purposes meanings. When there is a specific statute governing the issue, the same cannot be whished away on the basis of practical purposes.
3.23. The observation that assessee had a bank A/c and address in Noida has no relevance inasmuch as any assessee can maintain bank a/cs and addresses of domicile at various places depending on exigencies. However, for the purpose of income-tax there is always one assessing jurisdiction and merely because the assessee had Noida Bank a/c and address will not take 20
away the stark fact that assessee was undisputedly assessed at Delhi, which none of the authorities has denied.
3.24. Reliance placed by ld. CIT(Appeals) on the case of M/s Amulya General Trading & Agencies Ltd. (supra) is also misplaced inasmuch as in this case assessee filed returns for same year at two places i.e. Delhi and Ghaziabad and both AOs passed the assessment orders and dispute pertained to which assessment order was to be adopted.
3.25 Ld. counsel contends that in the case of Col. Paramjait Singh Vs. CIT (1996) 220 ITR 446 (P&H), Hon'ble Punjab & Haryana High Court on similar facts held as under:
4. We have heard the counsel for the parties and in the normal course we would have accepted the preliminary objection raised by the department and directed the petitioner to raise all the pleas before the ITO but keeping in view the fact that the present is a case where there is total lack of jurisdiction in respondent No. 2, we are interfering in the matter. There is no gainsaying the fact that the petitioner was posted at Pune when he was in the service of the Army and for the assessment year in question he filed his return of income with the ITO there and the same stands assessed. The proceedings had been completed and the tax found payable had been deposited/accounted for. Thereafter, if the assessment proceedings are to be re-opened 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 alone has the jurisdiction to proceed in the matter under section 147 read with section 148 unless the case has been transferred by a competent authority to another Assessing Officer under section 127 of the Act and in that event the latter will have jurisdiction to proceed. Section 127 which is relevant for our purpose is reproduced hereunder for facility of reference :-
"Power to transfer cases - (1) The Director
General or Chief Commissioner or Commissioner may, after giving the assessee a reasonable
opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him
(whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing
Officers (whether with or without concurrent jurisdiction) also subordinate to him.
(2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director General of Chief Commissioner or Commissioner, -
(a )Where the Directors General or Chief
Commissioners or Commissioners to whom such
Assessing Officers are subordinate are in
agreement, then the Director General or Chief Commissioner or Commissioner from whose
jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order;
(b)Where the Directors General or Chief
Commissioners or Commissioners aforesaid are not in agreement, the order transfer ring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or
Commissioner as the Board may, by Notification in the Official Gazette, authorise in this behalf.
(3) Nothing in sub-section (1) or sub-section (2) shall be 22
deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such Officers are situated in the same city, locality or place.
(4) The transfer of a case under sub-section (1) or sub- section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred.
Explanation - In section 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commended after the date of such order or direction in respect of any year."
Under the aforesaid provision, the Director
General or Chief Commissioner or Commissioner can transfer any case at any stage of the
proceedings from one Assessing Officer
subordinate to him to another. If both the
Assessing Officers are not subordinate to the same Director General or Chief Commissioner or
Commissioner, then the transfer can be made on the respective Directors General or Chief
Commissioners or Commissioners agreeing and in the event of disagreement, by the Board or any such Director General or Chief Commissioner or Commissioner authorised by it. The section
expressly provides that on such a transfer it is not necessary to re-issue any notice when the same has already been issued by the Assessing Officer from whom the case is transferred and the Assessing Officer to whom the case is transferred is entitled to proceed from the stage at which he receives the case from his predecessor. It is also provided that wherever it is possible to do so, the assessee shall be given a reasonable opportunity of being heard before an order of transfer is passed and that the competent authority will record his reasons for the transfer. The Explanation to section 127, makes it clear that once an order of transfer is made under the section, all pending proceedings for different years are transferred and the Assessing Officer to whom the case is transferred would be in a
position to continue all the pending proceedings and to institute further proceedings against the assessee in respect of any year, past or future, and even to re-open the assessment for an earlier year which stood completed at the date of the transfer. It is clear that in the absence of any transfer order no Assessing Officer other than the one who
initiated the proceedings or completed the
assessment shall have jurisdiction to continue with the proceedings or even to re-open a concluded assessment. It is common ground between the
parties that the file of the petitioner pertaining to the assessment year 1988-89 has not been
transferred from the jurisdiction of Assessing Officer, Pune to the ITO, Jalandhar (respondent No. 2) herein. As a matter of fact, no order of transfer has been passed by the competent
authority under section 127 for any assessment year and, therefore, the proceedings for re- assessment initiated by respondent No. 2, are wholly without jurisdiction. We have, therefore, no hesitation in quashing the impugned notice dated 13-3-1995 (Annexure P-4 with the writ petition) issued by respondent No. 2 under section 148. 24
5. It was also contended on behalf of the petitioner that respondent No. 2 did not have sufficient material before him for re-opening the assessment proceedings and that it was a mala fide exercise of power since it was being exercised at the behest of the father of the petitioner's son-in-law. Since we have held that the ITO, Jalandhar has no jurisdiction to re-open the concluded assessment of the petitioner for the assessment year 1988-89, we are not examining these contentions of the learned counsel for the petitioner.
6. In the result, the writ petition is allowed and the proceedings for reassessment initiated by respondent No. 2 under section 148 set aside with costs which are assessed at Rs. 1,000.
3.26. It is pleaded that in this case also the assessee was being harassed by ITO Jalandhar at the instance of assessee's samdhi ( father of son-in-law). Though Hon'ble High Court has not commented on this aspect, it is noteworthy that a cost of Rs. One thousand has been imposed on the department for enforcing illegal transfer of jurisdiction. Hon'ble Court has held that unless a proper transfer order is passed by the Competent Authority u/s 127, the jurisdiction cannot be assumed by another officer. 3.27. Ld. counsel thus pleads that 148 notices issued by ACIT, Noida are bad in law and the order of CIT, Delhi dated 9-3-2004, transferring jurisdiction, is also bad in law and they should accordingly be quashed.
4. Ld. DR relies on the order of lower authorities and contends that the jurisdiction is defined in Section 124, which implies that the principal place of business will determine the jurisdiction of assessment. In this case the assessee's principal place of business was at Noida, therefore, the CIT, Noida had jurisdiction to issue 148 notices. 25
4.1. Assessee has obtained PAN no. from Noida only and deliberately filed earlier returns at Delhi instead of his correct jurisdiction i.e. Noida.
4.2. The transfer of jurisdiction/ record are administrative proceedings and cannot be interpreted in such a manner to render the assessment proceedings as invalid. Reliance is placed on M/s Amulya General Trading & Agencies Ltd. (supra).
4.3. In any case, if the assessee objected to the jurisdiction of ACIT, Noida, after one month of issue of notice u/s 148, which is time barred and has been , as rightly pointed out by the ld. CIT(Appeals). Further reliance is placed on Hon'ble Punjab & Haryana High Court decision in the case of Smt. Jaswinder Kaur Kooner Vs. CIT (2007) 291 ITR 80, for the proposition that assessee can challenge the issue of jurisdiction only by way of writ petition and not in the assessment proceedings and assessee having not raised the objection as to jurisdiction at the appropriate time before AO, cannot be permitted to take the issue in appeal.
5. In rejoinder, learned counsel for the assessee contends that ld. DR has so far not been able to demonstrate the disputed fact that assessee was assessed at Delhi and the departmental authorities could transfer the jurisdiction as per law and not as per their whims. PAN nos. are issued universally by Noida office of the Income-tax department, same does not decide the lawful jurisdiction and in any case the PAN number requirement came much later, the assessee was being assessed at Delhi much earlier, since A.Y. 1996-97, which fact has not been disputed. 26
5.1. Ld. DR has not been able to dispute the fact that while passing the impugned order u/s 127 dated 9-3-2004, opportunity of hearing was not given to the assessee by CIT, Delhi. .
5.2. The Hon'ble Punjab & Haryana High Court's judgment in the case of Smt. Jasvinder Kaur (supra) is not applicable as the issue of jurisdiction was raised much later. In this case assessee has been objecting to jurisdiction right from beginning and CIT(A) passed the order consequent to High Court's direction in assessee's writ petition.
6. We have heard rival contentions and gone through the relevant material available on record. Both the parties have argued in details on merits also. Firstly we would like to consider to the validity of 148 notices and the issue about the legality of the transfer order u/s 127(2) dated 9-3- 2004.
6.1. Adverting to the first issue, from the entire record and particularly the letter from the office of the CCIT, Meerut addressed by Addl. Commissioner, Head Quarters, Meerut dated 3-3-2004, it clearly emerges that till 3-3-2004 the assessee and his wife have been filing their returns regularly with AO, Delhi and were assessed by ITO Delhi. There is no accusition in this letter that the Delhi jurisdiction was based on misrepresentation of facts. This letter further clarifies that the assessment of jurisdiction assumed by ACIT Noida was not on good grounds and he should not have issued the notice without the prescribed procedure of inter charge change of jurisdiction between two regions of income tax department with the endorsement of both the Commissioners. This letter clinches the issue and belies the observations of CIT(A) that Delhi and Noida are practically same locality and that the assessee wrongly got himself assessed 27
at Delhi. With this authoritative communication of CIT, Delhi on the record issued to all the officers, we are unable to sustain any finding of the AO or ld. CIT(Appeals). There cannot be any hesitation in holding that by the time 148 notices were issued by ACIT, Noida, he had no jurisdiction, whatsoever on the assessee, therefore, all the notices issued /s 148 are invalid as per the provisions of Income-tax Act. This ground of the assessee is allowed. 6.2. Coming to the issue raised by the assessee that the transfer of jurisdiction order u/s 127(2) is also not proper in the eyes of law, it is clear that the CCIT, Meerut issued the letter to both the Commissioners i.e. CIT, Ghaziabad and CIT Delhi for inter charge transfer of jurisdiction on 3-3- 2004. The impugned 127(4) order has been passed by the CIT, Delhi on 9-3- 2004 i.e. within 5 days. There is no reference to any opportunity of being heard given to the assessee. There is neither any reference in the order nor ld. DR could dispute this fact. Ld. DR has only argued that it is an administrative order and denial of opportunity of hearing is not appealable, therefore, no prejudice is caused to the assessee. We are unable to agree with ld. DR. Statutory requirements are always mandatory irrespective of the fact whether the same is appealable or not, therefore, any transfer order passed u/s 127(2) of inter charge jurisdiction , without complying with the statutory requirement of giving opportunity of being heard to the assessee is invalid.
6.3. Hon'ble Delhi High Court's judgment in the case of Melco India Pvt. Ltd. & others (supra) is binding on us and observations are to be followed with utmost respect. Respectfully following the Hon'ble Delhi High Court judgment in the case of Melco India Pvt. Ltd. & others (supra), which in turn followed Vijay Shanti Investment passed by the CIT, Delhi, cannot be sustained as no notice was issued to the Pvt. Ltd. 187 ITR (Del), we hold 28
that transfer order u/s 127 dated 9-3-2004 assessee giving opportunity of being heard about the transfer of jurisdiction. In view of these facts and observations we hold that order of CIT, Delhi dated 9-3-2004, transferring jurisdiction u/s 127(2) is bad in law. Consequently 148 notices, reassessment and transfer of jurisdiction order u/s 127(2) dated 9-3-2004 are quashed. This ground raised by the assessee is also allowed. 6.4. Since we have held that the notices u/s 148, consequential reassessments and transfer order u/s 127(2) to be bad in law, therefore there is no need to decide merits of additions.
ITA no. 1562/Del/11 - Smt. Alka Tiwari
7. Coming to the appeal filed by Smt. Alka Tiwari, facts and circumstances in the case of Smt. Alka Tiwari are similar with the case of Shri Deepak Gupta, except some details. In the case of Smt. Alka Tiwari ACIT Noida's request letter for transfer of jurisdiction is dated 22-3-2004 and the transfer order of jurisdiction u/s 127(2) was passed within three days i.e. 26-3-2004. There may be small variation in the date of notice u/s 148, however, facts and circumstances are similar that ACIT, Noida issued notice u/s 148 prior to jurisdiction transfer. Following our orders in the case of Deepak Gupta (supra), we allow the appeal in the case of Smt. Alka Tiwari also quashing 148 notice, reassessment and 127(2) order.
8. Before parting we may mention that the assessee's objections about jurisdiction been ignored by the departmental authorities without any lawful justification. It is trite law that India is governed by rule of law and income- tax Act is part of our system of rule of law. If the law provides clear statute governing an eventuality in that case the departmental authorities must 29
respectfully carry out the words of the statute. The assessee has seen put to seek multiple proceedings before various authorities and had to file writ petitions in Hon'ble Allahabad High Court. In our humble opinion, it would be desirable that departmental authorities should follow the provisions of Income tax Act diligently and should not adopt a rigid attitude and instead of correcting the mistakes, go ahead on the basis of self contradictory observations and findings. Assessee has raised so many grievances on this issue of harassment. We do not wish to comment on them as Hon'ble Punjab & Haryana High Court has done in the case of Ld. Col. Poaramjit Singh (supraw) in which cost was imposed on the department. We hope that the departmental authorities will take proper notice of our observations while dealing with such cases.
9. In the result, all the appeals filed by both the assessees are allowed. Order pronounced in open court on 31-05-2012.
Sd/- Sd/- ( T.S. KAPOOR ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31-o5-2012.
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