Sheladia Associates, Gandhinagar vs Assessee

M/s. Sheladia Associates, V/S Asst. Commissioner of Inc. Plot No. 487/2, Sector- Income Tax Circle-2(1), 7/B, Gandhinagar- 382007 Bhubaneswar

(Appellant) (Respondent)

The D.C.I.T., Gandhinagar V/S M/s. Sheladia Associates, Circle, Gandhinagar Inc. Plot No. 487/2, Sector- 7/B, Gandhinagar (Appellant) (Respondent)

PAN: AAFCS 7792F

Appellant by : Ms. Ritika Agarwal Respondent by : Shri T.P. Krishnakumar, CIT/DR

(आदे श)/ORDER

Date of hearing : 27-05-2015 Date of Pronouncement : 29 -05-2015

PER ANIL CHATURVEDI, ACCOUNTANT MEMBER.

1. These 2 appeals, of which 1 is filed by the Assessee and the other is filed by the Revenue, are against the order of CIT(A), Gandhinagar dated 01.12.2010 for A.Y. 2006-07.

2. The relevant facts as culled out from the material on record are as under.

2 ITA No 95 & 725/AHD/2011 . A.Y. 2006-07

3. Assessee is a company stated to be engaged in the business of consultancy of engineering services for various infrastructure projects in India. Assessee filed its return of income for A.Y. 2006-07 on 17.03.2008 showing total taxable income of Rs. 9,76,14,190/-. A.O in the assessment order has noted that the case was selected for scrutiny and notices u/s. 143(2) and 142(1) was served on the Assessee but since in response to the notices, none appeared nor details were filed, A.O passed order on 18.12.2008 u/s. 144 and determined the total income at Rs. 13,76,14,190/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 01.12.2010 granted partial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Assessee and Revenue are now in appeal before us. The grounds raised by Assessee reads as under:-

1. On the facts and circumstances of the case the learned CIT (Appeals) has erred in holding that Asst. Commissioner of Income Tax Circle - 2(1), Bhubaneswar had the jurisdiction to pass the order of assessment for A.Y. 2006-07 in the case of the appellant.

2. On the facts and circumstances of the case the Id. CIT (Appeals) has erred in holding that Asst. Commissioner of Income Tax Circle - 2(1), Bhubaneswar was not bound to consider the objection to his jurisdiction filed by the appellant u/s 124 before him.

3. On the facts and circumstances of the case the Id. CIT (Appeals) has erred in holding that the order of Asst. Commissioner of Income Tax Circle - 2(1), Bhubaneswar made under section 144 was valid.

4. On the facts and circumstances of the case the Id. CIT (Appeals) has erred in confirming without giving any basis and justification addition of amount of Rs.

2,00,00,000/- out of arbitrary ad hoc addition of Rs. 4,00,00,000/- made by the assessing officer.

4. On the other hand the grounds raised by Revenue reads as under:-

1. The learned CIT(Appeals) has erred in law and on facts in restricting the addition made on account of estimation of profit from Rs.4 crores to Rs.2 crores, thereby deleting the addition by an amount of Rs.2,00,00,000/-.

2. On the facts and circumstances of the case the Ld.CIT(A) ought to have upheld the order of the Assessing Officer.

3. It is therefore prayed that the order of the learned CIT(Appeals) may be set aside and that of the A.O. be restored to the above extent.

3 ITA No 95 & 725/AHD/2011 . A.Y. 2006-07

5. Both the appeals are interconnected and therefore considered together.

6. Before us, ld. A.R. at the outset, on the validity of the assessment order passed by A.O, submitted that Assessee is a foreign company incorporated in USA and since 1989-99 has been providing consultancy for design and various NHAI projects in India and its project office was in Bhubaneswar and was assessed at Bhubaneswar till A.Y. 02-03. After the project office shifted to Gandhinagar, the Assessee filed its Return of Income for A.Y. 03- 04 onwards with ACIT, Gandhinagar. She submitted that when the return of income was filed by the Assessee before ACIT, Gandhinagar who had the jurisdiction of Assessee the assessment order dated 18.12.2008 passed u/s. 144 of the Act by A.C.I.T, Bhubaneswar is bad in law as he had no jurisdiction to pass the assessment order. She also placed on record a chart showing details of Assessee's jurisdiction in different assessment years and from it she pointed out that the assessment orders for immediately preceding assessment years i.e. A.Y. 03-04 & 05-06 were passed by ACIT, Gandhinagar and the orders for subsequent years i.e. A.Y. 07-08 & 08-09 has also been passed by ACIT, Gandhinagar. She therefore submitted that in such a situation passing the assessment order, for the year under consideration i.e. A.Y. 06-07 being the intermediate year, by ACIT, Bhubaneswar is without jurisdiction. She also pointed to the letter dated 3rd August, 2004 (placed at paper book136) which was addressed to ACIT, Gandhinagar informing him about the filing of return of income at Gandhinagar on account of change of primary place of business of the Assessee from Bhubaneswar to Gandhinagar. She therefore submitted that in the absence of jurisdiction by ACIT, Bhubaneswar, the assessment order passed by him u/s. 144 of the Act is null and void and non existent in the 4 ITA No 95 & 725/AHD/2011 . A.Y. 2006-07 eyes of law and therefore the same needs to be quashed. The ld. D.R. on the other hand supported the order of A.O and ld. CIT(A) and further submitted that in the present case no order to transfer the case from Bhubaneswar to Gandhinagar u/s. 127 of the Act has been passed by the competent authority which is a mandatory requirement and therefore the A.O at Bhubaneswar had the jurisdiction to pass the order and has rightly passed the order. He thus supported the order of A.O and ld. CIT(A).

7. We have heard the rival submissions and perused the material on record. On the basis of Chart filed by the Assessee about the jurisdiction and which has not been controverted by Revenue, it is an undisputed fact that up to A.Y. 02-03, the Assessee was assessed to tax at Bhubaneswar. It is Assessee's contention that due to the change of place of business it had started filing its return from A.Y. 03-04 onwards of income at Gandhinagar. It is also an undisputed fact that for A.Y. 03-04 intimation u/s. 143(1) has been passed by ACIT, Gandhinagar, the copy of which is placed at page no. 142 of the paper book. It is also an undisputed fact that for A.Y. 05-06 assessment order u/s. 143(3) dated 6.12.2007 has been passed by ACIT, Gandhinagar and the copy of which is placed at page 143 and 144 of the paper book.

Similarly, for A.Y. 07-08 and 08-09 the assessments of Assessee has been framed u/s. 143(3) by ACIT, Gandhinagar and against which the Revenue is in appeal before Tribunal. Before us, it is Revenue's stand that no order u/s. 127 of the Act to transfer the case of the Assessee from Bhubaneswar to Gandhinagar has been passed but we are of the view that impliedly by passing the assessment orders for earlier year (i.e. A.Y. 03-04 and 05-06) and subsequent years (i.e. A.Y. 07-08 and 08-09) by ACIT, Gandhinagar, ACIT, Gandhinagar has impliedly assumed the jurisdiction of Assessee and 5 ITA No 95 & 725/AHD/2011 . A.Y. 2006-07 therefore when once by implication ACIT, Gandhinagar has assumed jurisdiction, then the assessment order passed by ACIT, Bhubaneswar for A.Y. 06-07 dated 18.12.2008 passed u/s. 144 of the Act (being the year in between of the years when ACIT, Gandhinagar had jurisdiction) is without jurisdiction and therefore not a valid order and therefore we hold it to be non-est in the eyes of law. Before us, Revenue has also not brought any binding decision or placed any material to support of its case. In view of the aforesaid facts, the ground of the Assessee raised on the issue of jurisdiction is allowed.

8. Since the assessment order passed u/s. 144 of the Act itself has been held by us to be without jurisdiction, we are of the view that the other ground raised on merits by Assessee and the ground raised by Revenue on quantum addition have become academic and therefore requires no adjudication and therefore not adjudicated.

9. In the result, the appeal of Assessee is allowed and that of Revenue is dismissed.

Order pronounced in Open Court on 29 - 05 - 2015.

Sd/- Sd/- (RAJPAL YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad. TRUE COPY Rajesh

Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) - 4. The CIT concerned.