Principal Commissioner Of Income Tax 4 v. Kishor Bachuram Kapdi

C/TAXAP/802/2018 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 802 of 2018 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH Sd/- andHONOURABLE MR.JUSTICE A.Y. KOGJESd/-=============================================1 Whether Reporters of Local Papers may be allowed to see Nothe judgment ? 2 To be referred to the Reporter or not ? NoNo 3 Whether their Lordships wish to see the fair copy of the Nojudgment ?4 Whether this case involves a substantial question of law as Noto the interpretation of the Constitution of India or any order made thereunder ? =============================================PRINCIPAL COMMISSIONER OF INCOME TAX 4 Versus KISHOR BACHURAM KAPDI =============================================Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE Date : 16/07/2018 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] Feeling aggrieved and dissatisfied with the impugned order dated 16.02.2018 passed by the learned Income Tax Appellate Tribunal, Ahmedabad Bench ‘D’ (hereinafter referred to as “Tribunal”) by which the learned Tribunal has dismissed the said appeal preferred by the Revenue and has confirmed the order passed by the learned CIT(A) quashing and setting aside the assessment order passed by the Assessing Officer on the ground that the Assessing Officer who completed and finalized the assessment for AY 2010-11 was not having territorial jurisdiction, the Revenue has preferred the present Tax Appeal with following proposed question of law. “Whether the Appellate Tribunal has erred in law and on facts in upholding the order of the CIT(A) in holding the assessment in upholding the order of the CIT(A) in holding the assessment order u/s. 143(3) r.w. Section 144 of the Income Tax Act dated 04.03.2013 as bad in law for lack of territorial jurisdiction?”dated 04.03.2013 as bad in law for lack of territorial jurisdiction?” [2.0] The facts leading to the present Tax Appeal in nut-shell are as under: [2.1] The assessee e-filed his return of income on 29.03.2011 declaring total income at Rs.3,20,000/-. The return was processed under Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as “IT Act”). The notices were issued by the Assessing Officer – Income Tax Officer, Ward – 1, Gandhidham. All the notices were issued by the aforesaid Assessing Officer. The assessee vide letter dated 19.07.2012 intimated to the Assessing Officer that his jurisdiction has been changed to Ahmedabad. It appears that vide letter dated 08.01.2013 the assessee was intimated that his application for change of jurisdiction cannot be entertained as proper procedure for change of jurisdiction has not been followed and due to pending scrutiny assessment for AY 2011-12. It appears that thereafter, vide letter dated 27.01.2013, the assessee once again requested to transfer the record at Ahmedabad. Therefore, from the very beginning it was the case on behalf of the assessee that there is a change of jurisdiction to Ahmedabad. However, despite the above, the Assessing Officer continued the assessment proceedings and proceeded further with the assessment proceedings ex parte thereafter. That thereafter the Assessing Officer directed to make addition on account of unexplained cash credits to the extent of Rs.2,05,20,520/- and addition on account of unexplained investment in immovable property not to the extent of Rs.31,77,200/-. The Assessing Officer also made addition on account of deduction claimed under Chapter VIA of Rs.1,00,000/-. Assessing Officer continued the assessment proceedings and proceeded further with the assessment proceedings ex parte thereafter. That thereafter the Assessing Officer directed to make addition on account of unexplained cash credits to the extent of Rs.2,05,20,520/- and addition on account of unexplained investment in immovable property not to the extent of Rs.31,77,200/-. The Assessing Officer also made addition on account of deduction claimed under Chapter VIA of Rs.1,00,000/-. [2.2] Feeling aggrieved and dissatisfied with the assessment order dated 04.03.2013, the assessee preferred appeal before the learned CIT(A). That by giving cogent reasons and passing a speaking order in paras 5.1 and 5.2, the learned CIT(A) observed and held that the assessment order passed by the Assessing Officer – ITO – Ward-1, Gandhidham is wholly without jurisdiction. The same has been confirmed by the learned Tribunal by the impugned order. [2.3] Feeling aggrieved and dissatisfied with the impugned order passed by the learned Tribunal dismissing the appeal preferred by the Revenue and confirming the order passed by the learned CIT(A) holding that the assessment order was suffering from lack of territorial jurisdiction at the Assessing Officer’s behest, the Revenue has preferred the present Tax Appeal with the aforesaid proposed question of law. [3.0] We have heard Mrs. Bhatt, learned Counsel appearing on behalf of the Revenue. At the outset it is required to be noted that from the date of receipt of notice under Section 142 of the IT Act and thereafter repeatedly the assessee stated and submitted before the Assessing Officer that the jurisdiction is changed to Ahmedabad. As observed by the learned CIT(A) and even from the order passed by the Assessing Officer, assessee was repeatedly requesting the Assessing Officer to transfer the case records to Ahmedabad as his jurisdiction and even the PAN had already been transferred to Ahmedabad. While holding that the order passed by the Assessing Officer – Gandhinagar lack territorial jurisdiction, the learned CIT(A) observed as under: [3.0] We have heard Mrs. Bhatt, learned Counsel appearing on behalf of the Revenue. At the outset it is required to be noted that from the date of receipt of notice under Section 142 of the IT Act and thereafter repeatedly the assessee stated and submitted before the Assessing Officer that the jurisdiction is changed to Ahmedabad. As observed by the learned CIT(A) and even from the order passed by the Assessing Officer, assessee was repeatedly requesting the Assessing Officer to transfer the case records to Ahmedabad as his jurisdiction and even the PAN had already been transferred to Ahmedabad. While holding that the order passed by the Assessing Officer – Gandhinagar lack territorial jurisdiction, the learned CIT(A) observed as under: “5.Ground 1 and 2 are being adjudicated first as it is raising a very serious concern that the AO had passed the order when he was not having the jurisdiction itself. It is apparent from the assessment order that while AO was trying to serve the notice and ensure his presence and submission, the assessee was requesting him to transfer the case records to Ahmedabad as his jurisdiction (& thus PAN) had already been transferred to Ahmedabad. AO’s agreement that appellant was aware that assessment proceedings was pending with him and that despite many efforts including that by Inspector, appellant was not co-operating in acepting the notices and making submission doesn’t have much significance unless the basic question is resolved, i.e. whether he had the jurisdiction when he conducted and passed the assessment order. The Ld. AR had submitted evidences to show that subsequent evidences to show that subsequent to shift of registered office of the company in which he was a director, he had also changed his address to Ahmedabad and accordingly requested CIT-1, Rajkot to transfer his jurisdiction to Ahmedabad vide letter dtd. 26/01/2011. Shift of his jurisdiction to Ahmedabad was confirmed by AO at Ahmedabad albeit he was informed that he should in future use a new PAN. He filed his return of income online with new AO at Ahmedabad on 15/02/2012. Further assessment proceeding for assessing his income for AY 2011-12 was also initiated at new AO’s office at Ahmedabad. Similar was case for AY 2012-13. For current assessment year, the appellant requested AO (Gandhidham) vide letter dtd. 09/01/2012, 19/07/2012 and 27/01/2012 to transfer the case to Ahmedabad and he also requested CIT-1 Rajkot vide letter dtd. 22/02/2013 to follow up his request. Meanwhile it appears that PAN was transferred from Ahmedabad to Gandhidham without any information to the appellant who rushed to Gujarat High Court with a Writ petition and obtained a favorable order directing appropriate authority to restore the jurisdiction at Ahmedabad and same was carried out by AO (at Ahmedabad) vide order dt.05/06/2013. Appellate had gathered information from the Department using RTI Act that jurisdiction in his case was transferred to Ahmedabad from Gandhidham on 14/02/2012 and then, it was transferred back from Ahmedabad to Gandhidham on 11/03/2013 and again back to Ahmedabad after High Court direction. 5.2Thus it is apparent that the AO had been informed repeatedly by appellant that his case had already been transferred to Ahmedabad but he proceeded to pass the assessment order u/s. 144 on04/03/2013, clearly on a date when the jurisdiction as well as PAN was still at Ahmedabad. In such circumstance, seemingly it appeared that order was passed by the AO was was not having jurisdiction...” 5.2Thus it is apparent that the AO had been informed repeatedly by appellant that his case had already been transferred to Ahmedabad but he proceeded to pass the assessment order u/s. 144 on04/03/2013, clearly on a date when the jurisdiction as well as PAN was still at Ahmedabad. In such circumstance, seemingly it appeared that order was passed by the AO was was not having jurisdiction...” [3.1] From the aforesaid it appears that for whatever reason the Assessing Officer was bank upon to finalize the assessment though he was not having any territorial jurisdiction due to the change of the jurisdiction of the assessee to Ahmedabad. Considering the aforesaid facts and circumstances and considering the material on record when the learned CIT(A) quashed and set aside the assessment order on the ground that the order of assessment was suffering from lack of territorial jurisdiction at the AO’s behest and thereafter when the same has been confirmed by the learned Tribunal, we see no reason to interfere with the same. No substantial question of law arises as proposed. [4.0] In view of the above and for the reasons stated above, present Tax Appeal fails and the same deserves to be dismissed and is, accordingly, dismissed. No costs. Sd/- (M.R. SHAH, J.) Sd/- (A.Y. KOGJE, J.) Ajay**