Baljit Securities Pvt. Ltd. Vs ACIT (ITAT Kolkata)
The appeal arose from reassessment proceedings for Assessment Year 2013-14. The assessee had originally filed its return declaring nil income, and the assessment was completed under Section 143(3) at a total income of ₹62,67,810. Subsequently, the assessment was reopened based on information from the Investigation Wing alleging that the assessee had received ₹20,00,000 from two alleged paper/shell companies. The Assessing Officer made an addition of ₹20,00,000 under Section 68, which was upheld by the Commissioner (Appeals). The assessee challenged the order before the Tribunal.
The assessee primarily questioned the jurisdiction of the reassessment proceedings. It contended that the statutory notice under Section 143(2) had been issued by ACIT, Circle 15(1), Kolkata, whereas the reassessment order was ultimately passed by DCIT, Circle 8(1), Kolkata, without any valid assumption, transfer or continuation of jurisdiction. The assessee also argued that the addition under Section 68 represented sale proceeds of shares already recorded in the books and taxing the same again would result in double taxation. The Revenue maintained that the transfer of the case was within the jurisdiction of the competent authority and that the assessee could not challenge the jurisdiction.
The Tribunal examined CBDT Instruction No. 1/2011 dated 31.01.2011 governing pecuniary jurisdiction. It observed that, since the assessee had declared nil income, jurisdiction to issue notice under Section 143(2) lay with the Income Tax Officer (ITO) and not with the ACIT. The Tribunal relied extensively on an earlier coordinate bench decision in ABC India Limited, which had considered the same jurisdictional issue in the light of the Supreme Court, the Calcutta High Court and earlier Tribunal decisions.
