A Single Bench of Orissa High Court has restored the matter to Kolkata Income Tax Circle holding that transfer of jurisdiction of matter was done after completion of assessment.
The Petitioner, Biswajaya Dagara initially carried out his business activities from Bhubaneswar, Odisha and he was filing returns there for the AYs 2006-07, 2007-08, 2008-09 and 2009-2010, assessment orders under Section 143(3) of the Income Tax Act passed by the AO, Bhubaneswar. Statutory appeals had also been filed against those assessment orders before the Commissioner of Income Tax (Appeals-I) Bhubaneswar. However, surprisingly pursuant to the said order an order under Section 251 of the Income Tax Act was issued by the ACIT, Balasore Circle. The Petitioner filed an objection for shifting the jurisdiction.
However, the Assistant commissioner of Income Tax (ACIT), Balasore again issued a notice under Section 274 read with Section 271 of the Income Tax Act 1961 alleging noncompliance with the earlier notices and proposing penalties under Section 271(1)(b) of the Income Tax Act.
R.S. Chimanka,on behalf of the revenue contented that where a person was a director in a company or a partner in a firm, jurisdiction over him/her would lie with the officer where the company or the firm is assessed.. Nabadurga Construction Pvt. Ltd Rairangpur, Mayurbhanj was a company assessed in Balasore Circle, in which the present Petitioner was one of the directors having 10% share and it was crystal clear that the jurisdiction over the Petitioner lied with the Balasore Circle.
Rajjeet Roy, on behalf of the assessee submitted that, in the matter of objection to the jurisdiction of the Assessing Officer and transfer of a case, a valuable right of an assessee was clearly involved which could not be adversely adjudicated upon without affording him an opportunity of hearing and disclosing to him the reasons for not accepting his point of view.” He further contended that he had been filing return at Kolkata and was unaware about the transfer.
A single Bench of Chief Justice, MS Raman quashed the impugned order holding that the petitioner would continue to be within the jurisdiction of the relevant Income Tax Circle at Kolkata where he had been filing his returns.
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