Calcutta High Court
Principal Commissioner Of Income Tax vs Divine Light Finance Ltd on 3 July, 2024
1
O - 165
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction [Income Tax]
ORIGINAL SIDE
ITA/79/2022
PRINCIPAL COMMISSIONER OF INCOME TAX-
1, SURAT
VS
DIVINE LIGHT FINANCE LTD.
BEFORE :
THE HON'BLE JUSTICE SURYA PRAKASH KESARWANI
And
THE HON'BLE JUSTICE AJAY KUMAR GUPTA
Date : 3rd July, 2024
Appearance :
Sri Soumen Bhattacharjee, Adv.
.. . for the appellant.
1. Heard Sri Soumen Bhattacharjee, learned junior standing
counsel for the appellant/revenue. None has appeared for the
respondent/assessee.
2. This appeal was admitted by this Court by order dated
31.10.2022 on the following substantial question of law :
"i) Whether the ITAT has erred in law in quashing the
Assessment Order passed by the Assessing Officer by
holding that it suffered from lack of territorial
jurisdiction and thereby allowing the assessee's
appeal without considering the fact that as on the
date of passing Assessment Order, the Pan was with the
ITO, Wd. 9(1), Kolkata from 12/12/2002 to 31/05/2018?
ii) Whether the plea of territorial jurisdiction
raised at the time of hearing before the Tribunal, can
be entertained at all after the lapse of time limit
specified in Section 124(3) and in view of Section
292BB of the Income Tax Act, 1961?"
3. The assessment of the respondent/assesse was completed by
the ITO Ward No.12(2), Kolkata under Section 143(3) of the
Income Tax Act, 1961 (hereinafter referred to as the 'Act,
1961') vide order dated 21.3.2013. After completion of the
assessment, as aforesaid, a notice dated 19.8.2014 under
Section 263 of the Act, 1961 was issued by the Commissioner
of Income Tax, Kolkata - IV for the assessment year in
question i.e. 2014-15. By Notification No.SO 2752(E) dated
22.10.2014 the jurisdiction over the assessee was
transferred to the Commissioner of Income Tax - 11, Kolkata
from the Commissioner of Income Tax - IV, Kolkata. However,
the Commissioner of Income Tax - IV, Kolkata passed an
order dated 19.1.2016 under Section 263 of the Act, 1961 in
respect of respondent/assessee. Thereafter, consequential
order dated 29.12.2016 was passed by the ITO Ward No.9(1),
Kolkata under Section 143 for the assessment year 2014-15.
Aggrieved with the aforesaid assessment order, the
respondent/assessee filed an appeal before the CIT(Appeals)
which was dismissed by order dated 24.4.2019. Aggrieved
with the order of the CIT(Appeals) - 15, Kolkata, the
respondent/assessee filed an appeal being
ITA/1591/Kol/2019, assessment year (2014-15) before the
Income Tax Appellate Tribunal, Bench 'SMC' , Kolkata for
which an additional ground raising question of territorial
jurisdiction of the CIT-IV, Kolkata to pass orders under
Section 263 of the Act, 1961 was also taken. The ITAT
found that CIT-11, Kolkata was having jurisdiction in view
of the Notification No.SO 2752(E) dated 22.10.2014 issued
by the CBDT and, thus, the CIT-IV, Kolkata who passed the
order under Section 263 dated 19.1.2016 was not having
jurisdiction over the respondent/assessee. Therefore, the
ITAT concluded that the order passed by the CIT-IV, Kolkata
under Section 263 of the Act, 1961 was without
jurisdiction. The ITO, Ward No.12(2) Kolkata who passed the
original assessment order has also written a letter dated
28.10.2014 to the ITO Ward No.6(4), Kolkata transferring
the necessary files consequent to the change of
jurisdiction over the respondent/assessee pursuant to the
aforesaid Notification No.SO.2752(E) dated 22.10.2014
issued by the CBDT.
4. Learned counsel for the appellant has not disputed the
facts afore-noted by us which are well-reflected from
paragraphs 4 and 6 of the impugned order of the ITAT but he
submits that since the respondent/assessee has not raised
any objection as to the territorial jurisdiction within the
time allowed under Section 124(3) of the Act, 1961,
therefore, the Tribunal should not have entertained the
ground of territorial jurisdiction. No other point has been
argued before us by learned counsel for the appellant.
5. We have carefully considered the submissions of the learned
counsel for the appellant and perused the paper book.
6. We find that the facts as afore-noted have not been
disputed before us. Therefore, it remains undisputed that
vide Notification dated 22.10.2014 the jurisdictional
Commissioner of Income Tax was the Commissioner of Income
Tax - 11, Kolkata and not the Commissioner of Income Tax -
IV, Kolkata who passed the order dated 19.1.2016 under
Section 263 of the Act, 1961. Now, the question arises
whether Section 124(3) of the Act, 1961 shall come into
play as argued by learned counsel for the appellant?
7. Section 124 of the Act, 1961 is reproduced below :
"(3) No person shall be entitled to call in question
the jurisdiction of an Assessing Officer-
(a) where he has made a return "[under sub-section (1)
of section 115WD or under 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
(1) of section 142 or [sub-section (2) of section
115WE or 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-section
(2) of section 115WD or sub-section (1) of section 142
or under 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 judgment of the Assessing Officer, whichever is
earlier.
[(c) where an action has been taken under section 132
or section 132A, after the expiry of one month from
the date on which he was served with a notice under
sub-section (1) of section 153A or sub-section (2) of
section 153C or after the completion of the
assessment, whichever is earlier."
8. From perusal of the provisions of Section 124(3) of the
Act, 1961 it is clear that it has no application with
respect to the proceedings under Section 263 of the Act,
1961. The power of CBDT to confer jurisdiction under the
Act, 1961 is undisputed. Neither the appellant has disputed
the issuance of Notification dated 22.10.2014 by the CBDT
nor it has been disputed by learned counsel for the
appellant that the Jurisdictional Commissioner of Income
Tax with respect to the respondent/assessee was the
Commissioner of Income Tax - 11, Kolkata when the order
dated 19.1.2016 under Section 263 of the Act, 1961 was
passed. Thus, as on the date when the order under Section
263 of the Act dated 19.1.2016 was passed by the
Commissioner of Income Tax - IV, Kolkata, he was not the
jurisdictional Commissioner and, thus, he inherently lacked
jurisdiction to pass the order dated 19.01.2016 under
Section 263. So far as Section 292BB is concerned, as
reflected in substantial question of law no.(ii) afore-
quoted; we find that Section 292BB has no application on
facts and circumstances of the present case. It relates to
deemed service of notice and not to the territorial
jurisdiction of an authority under the Act.
9. Where an authority or court lacks inherent jurisdiction in
passing a decree or order, the decree or order passed by
such authority or court would be without jurisdiction, non
est and void abinitio. Lack of territorial jurisdiction of
the Commissioner of Income Tax - IV who passed the order
dated 19.01.2016 under Section 263 of the Act, 1961 to
exercise supervisory jurisdiction goes to the root of the
matter and strikes at his very authority to pass the said
order. Such defect is basic and fundamental and, therefore,
the order passed by the aforesaid C.I.T having no
territorial jurisdiction over the respondent/assessee, is
nullity. Order or decree passed by a court having no
jurisdiction, has been held to be nullity by Hon'ble
Supreme Court in Kiran Singh Vs. Chaman Paswan AIR 1954 SC
340, Hira Patari Vs. Kali Nath AIR 1962 SC 199, Balwant N
Vishwamitra and Others Vs. Yadav Sada Shiv Mull (2004) 8
SCC 706.
10. The question of territorial jurisdiction as raised by
the respondent/assessee has gone to the very root of the
case. Such a question could be raised at any stage of the
proceedings, to contend that the order passed by the
Commissioner of Income Tax under Section 263 of the Act,
1961 was without jurisdiction. In other words, in appeal
the ground of territorial jurisdiction on the undisputed
facts of the present case, as afore-noted, was rightly
entertained by the ITAT.
11. For all the reasons afore-stated, we do not find any
illegality in the impugned order of the ITAT. The appeal
has not merit and is, therefore, dismissed. The substantial
questions of law are answered in favour of the assessee and
against the revenue.
(SURYA PRAKASH KESARWANI, J.)
(AJAY KUMAR GUPTA, J.)
S. Das/
