Itat/39/2023 Of Principal Commissioner Of Income Tax 1 Kolkata v. M/S Shree Shoppers Ltd

OD-9 ITAT/39/2023IA No.GA/1/2023 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE PRINCIPAL COMMISSIONER OFINCOME TAX-1, KOLKATA M/S. SHREE SHOPPERS LTD. BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 15[th] March, 2023 Appearance :Ms. Smita Das De, Adv....for the appellant. The Court : This appeal filed by the revenue underSection 260A of the Income Tax Act, 1961 (the ‘Act’ forbrevity) is directed against the order dated 8[th] September,2022 passed by the Income Tax Appellate Tribunal, “A” Bench,Kolkata (the Tribunal) in ITA No.865/Kol/2018 for theassessment year 2012-13. The revenue has raised the following substantialquestions of law for consideration: (i)Whether on the facts and circumstances of thecase the Tribunal was justified in law toquash the Assessing Order passed under Section143(3) of the said Act on the ground that the (ii) valid Notice under Section 143(2) was notissued in accordance with law despite the factthat said Notice was already issued by thejurisdictional Assessing Officer before theprocess of Restructuring Departmental Cadre ?Whether on the facts and circumstances of thecase the Tribunal was justified in law in notappreciating the fact that the Notice underSection 143(2) of the said Act is issued onlyonce at the time of initiating of the scrutinyassessment, thereafter mere change ofjurisdictional Assessing Officer within thesame Range and/or Pr.CIT cannot affect theassessment proceedings ? We have heard Ms. Smita Das De, learned standingcounsel for the appellant/revenue. Though the respondent hasbeen served and affidavit of service filed, none appears forthe respondent.The short issue which falls for consideration in theinstant case is whether there is valid notice issued underSection 143(2) of the Act for commencing the scrutinyassessment. The Tribunal has noted the facts and rendered afinding that on the date when the case was selected forscrutiny, the authority who issued the notice namely, theIncome Tax Officer, Ward No.9(4), Kolkata did not havejurisdiction and the jurisdiction was with the Deputy Commissioner of Income Tax. The following factual finding hasbeen recorded by the Tribunal : “Therefore, the legal ground stands to beadmitted and the same relates to invalidnotice issued u/s. 143(2) of the Act. It is asettled position of law that for carrying outthe assessment proceedings u/s. 143(3) of theAct, the statutory requirement of serving ofvalid notice u/s. 143(2)of the Act is must andin absence thereof the subsequent proceedingsbecome invalid. In the case of assessee, thefacts are that the assessee has declaredincome of Rs.48,47,180/- in the e-return filedon 26.09.2012. For selecting the case forscrutiny notice u/s. 143(2) of the Act wasissued by ITO, Ward-9(4), Kolkata dated23.09.2013. The Central Board of Direct Taxes(CBDT vide Instruction No.1/2011 supra)revised the monetary limit for issuing noticeby ITO/DCs/ACs. Through this instruction itstated that in case of metro cities in case ofcorporates declare income above Rs.30 lakh thejurisdiction of such corporate assessee willlie with the DCs/ACs. It is not in disputethat as on the date of selecting the case forscrutiny, the very basis for havingjurisdiction over the assessee is the returnedincome which was more than Rs.30 lakhs and thesame was lying with the DCs/Acs but the noticeu/s. 143(2) of the Act has been issued by ITO,Ward-9(4), Kolkata. It is true thatsubsequently the assessment has been framed by DCIT, Circle-9(2), Kolkata but the point indispute is that on date of issuing a noticeu/s. 143(2) of the Act, whether the ITO, Ward-9(4), Kolkata was having a valid jurisdictionto issue such notice u/s. 143(2) of the Act.” The above factual position recorded by the Tribunal isnot in dispute. Therefore, we are of the clear view that theTribunal rightly allowed the assessee’s appeal and quashed thescrutiny proceedings as defect in issuance of notice isincurable as it goes to the root of the matter. DCIT, Circle-9(2), Kolkata but the point indispute is that on date of issuing a noticeu/s. 143(2) of the Act, whether the ITO, Ward-9(4), Kolkata was having a valid jurisdictionto issue such notice u/s. 143(2) of the Act.” The above factual position recorded by the Tribunal isnot in dispute. Therefore, we are of the clear view that theTribunal rightly allowed the assessee’s appeal and quashed thescrutiny proceedings as defect in issuance of notice isincurable as it goes to the root of the matter. Thus, we find no ground to differ with the findingsrecorded by the learned Tribunal. In the result, the appeal filed by the revenue(ITAT/39/2023) is dismissed and the substantial questions oflaw are answered against the revenue. Consequently, the connected application for stay (IANo.GA/2/1/2023) also stands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)