Income Tax Act | Failure To Raise Timely Objection To Jurisdiction U/S 143(2) Bars Assessee From Challenging Assessment: Chhattisgarh HC

The Chhattisgarh High Court held that failure to raise a timely objection to jurisdiction under Section 143(2) of the Income Tax Act bars the assessee from challenging the assessment. Justices Sanjay K. Agrawal and Radhakishan Agrawal stated that the assessee also did not raise any objection regarding jurisdiction upon completion of his assessment. As such, the plea with regard to the territorial jurisdiction of the ITO was barred by virtue of Section 124(3)(a) of the Income Tax Act. The appellant/assessee is engaged in the business of trading in electrical goods in Raipur. The assessee filed his return of income for the assessment year 2012-13 electronically, declaring total income of ₹ 2,96,390/-. In the PAN database, at that time, his residential address was shown as Samta Colony, Raipur, Chhattisgarh. The said residential address determines the assessee's territorial jurisdiction. Accordingly, on the basis of the aforesaid PAN address, ITO, Ward-1(1), Raipur, who had jurisdiction over Samta Colony, Raipur, issued notice to the assessee under Section 143(2) of the Income Tax Act. Vide notification dated 15-11-2014, territorial reallocation of wards at Raipur was undertaken and consequent upon this restructuring, the jurisdiction over the area comprising Samta Colony stood automatically transferred to ITO, Ward-2(1), Raipur. Thereafter, the ITO, Ward-2(1), Raipur, pursuant to the notice issued earlier, continued the jurisdiction after reallocation and passed the order of assessment under Section 143(3) of the IT Act on 18-3-2015 determining total income at ₹ 28,38,520/- by including the additions as (i) disallowance under Section 40(a)(ia) of the IT Act of ₹ 4,59,219/- and (ii) addition of ₹ 20,82,915/- on undisclosed turnover. Feeling aggrieved and dissatisfied with the order passed by the Assessing Officer (AO), the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The CIT (Appeals)-I, Raipur, by its order partly allowed the appeal, deleting the disallowance under Section 40(a)(ia), but the addition of ₹ 20,82,915/- on undisclosed turnover was reduced to ₹ 11,53,939/- and disposed of the appeal accordingly. The assessee/appellant preferred an appeal before the ITAT, Raipur and raised an additional ground alleging lack of jurisdiction and invalid notice under Section 143(2) of the IT Act. The ITAT held that the notice issued by the ITO, Ward-1(1), Raipur, was valid, being based on the PAN database residential address. The assessee submitted that the ITAT has not considered the fact that the assessee has carried out his business and therefore the jurisdictional AO as per Section 2(7A), 124(1)(a), 124(1)(b) & 120(3) of the IT Act would be on the basis of his place of business and not on the basis of residential address shown in the PAN database. The bench noted that the assessee has not made any application for change in address to the concerned Assessing Officer and therefore the jurisdictional Assessing Officer is justified in processing the return of income filed by the assessee based on his PAN database residential address. The bench stated that the assessee was served with notice under Section 143(2) of the IT Act on 8-8-2013, which was served upon him on 21-8-2013, and he did not raise an objection qua jurisdiction of the Assessing Officer till his appeal was decided by the CIT (Appeals). The bench held that by the notification dated 15-11-2014, the territorial reallocation of wards at Raipur was undertaken and thus by operation of law, validly, the ITO, Ward-2(1), Raipur has been conferred with the jurisdiction after reallocation of wards. Therefore, the ITAT is absolutely justified in not entertaining the question with regard to jurisdiction of the AO. In view of the above, the bench dismissed the appeal. Case Title: Harish Kumar Chhabada v. Pr. Commissioner of Income Tax Income Tax Officer Case Number: TAXC No. 138 of 2023 Counsel for Appellant/Assessee: Dr. Shiv Kumar Shrivastava Counsel for Respondent/Department: Mr. Ajay Kumrani, Advocate on behalf of Mr. Amit Chaudhari, Senior Standing Counsel for the Income Tax Department Click Here To Read/Download The Order

Income Tax Act | Failure To Raise Timely Objection To Jurisdiction U/S 143(2) Bars Assessee From Challenging Assessment: Chhattisgarh HC

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