Dream Projects Vs ITO (ITAT Patna)
The Patna ITAT allowed the assessee’s appeals for AYs 2014-15 and 2015-16, holding that the notices issued under Section 143(2) and the consequent assessment orders were without jurisdiction, as the Assessing Officers at Patna did not possess territorial jurisdiction over the assessee under Section 120 of the Income Tax Act and the relevant CBDT notification.
The assessee, an Association of Persons engaged in construction and property development, had its registered office and principal place of business in Kolkata. It had applied for PAN using its Kolkata address, filed its income tax returns mentioning the Kolkata address, and was registered with the trade licence and Service Tax authorities at Kolkata. Although the PAN allotment letter directed the assessee to contact ITO Ward-6(2), Patna for filing returns, the assessee consistently requested transfer of jurisdiction to the Kolkata Assessing Officer. Those requests were not accepted, and the assessments for both years were completed by ITO Ward-6(5), Patna after notices under Section 143(2) were issued by the Patna authorities. The CIT(A) remanded the matter for fresh assessment, following which the assessee challenged the jurisdiction of the Patna Assessing Officer before the Tribunal.
The Tribunal examined Section 120 of the Act and observed that Income Tax Authorities can exercise powers only in accordance with the jurisdiction conferred by the CBDT. Jurisdiction may be assigned based on territorial area, class of persons, income, or class of cases. Concurrent jurisdiction can also be exercised only if specifically conferred by the CBDT under Section 120. Therefore, jurisdiction cannot arise merely from administrative actions or errors.
