$ 15 * IN HIGH COURT OF DELHI AT NEW DELHI Decided on 4th February, 2015 + ITA 236/2014 COMMISSIONER OF INCOME TAX-III ..... Appellant Through: Mr.Suruchi Aggarwal and Mr.Aamir Aziz, Advs. versus SHRI SHYAM SUNDER INFRASTRUCTURE (P) LTD ..... Respondent Through: Appearance not given. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K.GAUBA MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) % 1. Income Tax Appellate Tribunal s (ITAT) order dated 22.11.2013 allowing assessee s appeal - ITA 206/Del./2013 - has been questioned by Revenue in present appeal under Section 260-A of Income Tax Act, 1961 (hereinafter referred to as Act ). 2. brief facts necessary for deciding this case are that respondent s assessment was reopened by notice under Section 147 of Act. It is stated that original assessee, which had filed returns on 30.05.2003 was one Shalom Exim Pvt. Ltd. which was incorporated on 27.02.2003. Its name was subsequently changed to Mamram Developers ITA 236/2014 Page | 1 Pvt. Ltd. on 03.11.2003 and yet later on 27.11.2010 as Sh.Shyam Sunder Infrastructure Pvt. Ltd. 3. Upon receiving notice of reassessment under Section 148 of Act, successor company reiterated that it would stand by original return filed on 30.05.2003. assessment was, however, completed under Section 144 of Act. assessee appealed on diverse grounds including firstly on question of lack of jurisdiction of Assessing Officer (AO) to complete assessment, inter alia, for reason that concerned AO who sought to complete proceedings was not vested with authority. assessee also relied upon provision of Section 127 of Act. CIT(Appeals) rejected contentions as to jurisdiction as well as merits of appeal. ITAT, however, accepted assessee s contention and held that AO lacks jurisdiction since original assessee was subject to assessment by AO of Ward 6(2) whereas in present instance office of Ward 8(1) issued notice and Ward 8(3) completed proceedings. 4. Revenue urges that findings of ITAT are unsupportable in law and relies upon Section 124(3) to this effect. It also relies upon judgment of Allahabad High Court in Commissioner of Income-Tax vs. British India Corporation Ltd. (2011) 337 ITR 64. Section 124 of Act is extracted below: 124. Jurisdiction of Assessing Officers (1) Where by virtue of any direction or order issued under sub- section (1) or sub- section (2) of section 120, Assessing Officer has been vested ITA 236/2014 Page | 2 with jurisdiction over any area, within limits of such area, he shall have jurisdiction- (a) in respect of any person carrying on business or profession, if place at which he carries on his business or profession is situate within area, or where his business or profession is carried on in more places than one, if principal place of his business or profession is situate within area, and (b) in respect of any other person residing within area. (3) No person shall be entitled to call in question jurisdiction of Assessing Officer- (a) where he has made return under sub- section (1) of section 139, after expiry of one month from date on which he was served with notice under sub- section (1) of section 142 or sub- section (2) of section 143 or after completion of assessment, whichever is earlier; (b) where he has made no such return, after expiry of time allowed by notice under sub- section (1) of section 142 or under section 148 for making of return or by notice under first proviso to section 144 to show cause why assessment should not be completed to best of judgment of Assessing Officer, whichever is earlier. (4) Subject to provisions of sub- section (3), where assessee calls in question jurisdiction of an- Assessing Officer, then Assessing Officer ITA 236/2014 Page | 3 shall, if not satisfied with correctness of claim, refer matter for determination under sub- section (2) before assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all powers conferred by or under this Act on Assessing Officer in respect of income accruing or arising or received within area, if any, over which he has been vested with jurisdiction by virtue of directions or orders issued under sub- section (1) or sub- section (2) of section 120.] 5. Learned counsel for assessee contended that ITAT possessed jurisdiction to return finding on whether AO s order was nullity, and can give verdict that such adjudication cannot go into merits of such of proceedings. Facially, Section 124(3) stipulates bar to any contention about lack of jurisdiction of AO. It is not as if provisions of Act disable assessee from contending that in given circumstances AO lacks jurisdiction; rather Section 124(3) limits availability of those options at threshold. assessee upon receipt of notice of kind mentioned in Clause (a) and (b) of sub-section 3 has option to urge question of jurisdiction; expressed tenor and terms of provisions clarify that such objections are to be articulated at threshold or at earlier points of time. two points of time specified in Section 124(3)(a) are as under: (i) Within one month from date of service of notice or; ITA 236/2014 Page | 4 (ii) After completion of assessment whichever is earlier. 6. In present case, there is no dispute that reassessment notice was issued by AO on 22.03.2010; upon its receipt, assessee reiterated its earlier return on 21.04.2010. Since its response led to objections as to jurisdiction, it lost capacity to urge ground by virtue of provision under Section 124(3)(a). This condition has been obviously overlooked by ITAT which proceeded to set aside assessment and completed reassessment proceedings. impugned order is consequently set aside; question of law urged by Revenue is answered in its favour. matter is remitted for consideration on merits of appeal concerning additions made in reassessment proceedings. 7. appeal is allowed in above terms. 8. parties are directed to be present before ITAT on 16.03.2015, which shall proceed thereafter. S. RAVINDRA BHAT, J R.K.GAUBA, J FEBRUARY 04, 2015 mr ITA 236/2014 Page | 5 Commissioner of Income-tax-III v. Shri Shyam Sunder Infrastructure (P) Ltd