Tribunal Quashes Tax Assessment: Invalid Reopening Notice Issued Without Jurisdiction, Delay in Appeal Condoned.

The Tribunal allowed the appeal, quashing the assessment order due to a jurisdictional error in the re-opening notice issued under section 148 of the Income Tax Act. The notice was invalid as it was issued by an ITO without territorial jurisdiction over the assessee, who was based in Kolkata, not Jaipur. The appeal, initially time-barred by 55 days, was allowed after condonation of delay, attributed to a communication gap in the faceless disposal process, with no mala fide intent found. The appeal proceeded on merit, resulting in a decision favorable to the assessee.

---

---

Issues Involved:
The appeal being time-barred by 55 days, condonation of delay, jurisdictional issue regarding re-opening notice u/s 148 of the Income Tax Act.

Condonation of Delay:
The appeal was found to be time-barred by 55 days, but the assessee contended that the actual delay was only 25 days, calculated from the knowledge of the order rather than the date of passing. The delay was due to a communication gap in the faceless disposal of appeals, as notices were sent via email. The Tribunal deemed it appropriate to condone the delay, considering that no mala fide intention was found on the part of the assessee. It was noted that making the appeal time-barred was not a strategy by the assessee, and thus the delay was condoned, allowing the appeal to proceed on merit.

Jurisdictional Issue - Re-opening Notice u/s 148:
The re-opening notice u/s 148 of the Act was issued by an ITO who did not have territorial jurisdiction over the assessee. The assessment was based on the difference in sale consideration disclosed by the assessee and the stamp duty valuation. The AO formed an opinion that addition u/s 50C of the Act was required. However, it was established that the ITO at Jaipur did not have jurisdiction over the assessee, who had disclosed a Kolkata address in the PAN data. The notice issued by the Jaipur ITO was deemed incorrect, as the entire proceeding was vitiated due to the assumption of jurisdiction by an incorrect authority. Consequently, the assessment order based on this incorrect re-opening was quashed, and the appeal was allowed in favor of the assessee.

Conclusion:
The Tribunal allowed the appeal of the assessee, quashing the assessment order due to the jurisdictional issue regarding the re-opening notice u/s 148 of the Income Tax Act. The delay in filing the appeal was condoned, and the appeal was decided on merit.

Note: Separate judgement was not delivered by the judges in this case.

---