TaxTMI 
TaxTMI 
2020 (1) TMI 964
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....00/-. As per the information received by ITO, Ward-2(3), Cuttack from the Investigation Wing of Bhubaneswar, the said land was sold by the assessee on 16.08.2011 to one Shri Pawan Kumar Jajodia, Purighat, Cuttack for a total consideration of Rs. 1,37,00,000/-. Since the said sale of land gave rise to a long-term capital gain liable to tax in the hands of the assessee for the year under consideration i.e. A.Y. 2012-13 and no return of income for the said year was filed by the assessee declaring the said long-term capital gain, the ITO, Ward-2(3), Cuttack had reason to believe that income chargeable to tax in the hands of the assesese was escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. He accordingly reopened the assessment for the year under consideration after recording the reason and a notice under section 148 was issued by him on 30.03.2018. Meanwhile the return of income for A.Y. 2016-17 was filed by the assessee with the address of Midnapore and taking note of the same, the PAN Jurisdiction of the assessee was transferred to the ITO, Ward-38(4), Midnapore on 15.09.2018. The assessment record of the assessee was also transferred by the ITO, Ward....
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....r Roy Chowdhury and Paban Kumar. But according to Govt. Rate in that area it was one crore and thirty seven lakh. Sir after buying the land my son had spent about Eight lakh and more for boundary wall and suitable for living of a family. But at the time selling the cost of the land with building was fixed only Rs. Fifty lakh. The purchaser forced my son to say before the Registrar that he had got the said Govt. Rate as value. After sale deed registered the purchaser gave only Rs. Fifteen lakh only and Malay Sankar Roy Chowdhury had taken that rest amount. After that he gave us in eight instalments in three years. Now we are in such a position that we can not start a business within six years. We have lost everything for maintaining my family I cm bagging from door to door. Now it is my earnest prayer to you how shall I serve ourselves from this hard situation. I therefore request you to release me form this pressure, Now we have been living with much difficulty. We are uneducated so we have no means of earnings. Now we have been living only by the grace of God". 3. Keeping in view the above submission made on behalf of the assesese, a letter was issued by the Assessing Officer....
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....ting the same, he dismissed this ground for the following reason given in paragraph no. 8.1 to 8.3 of his impugned order:- "8.1 A close look at the reasons recorded by the ld. AO for reopening the case clearly mentions the verifications made by him. Once he had the information in his possession, he went through the details and cross-checked the facts with the appellant's return of income. He found that the appellant had not furnished his return of income for the AY 2012-13. He also found that the appellant had not filed his return of income right from the AY 2011-12 till the AY 2015-16. He filed his return for the AY 2016-17 with his address at Midnapore. I find that the ld. AO also computed the LTCG involved in this case by calculating the indexed cost of acquisition. Since he already had the details of the transaction undertaken by the appellant along with the sale deed, and since the return of income for the same had not been filed, there remained no further fact to be ascertained in this case. All these facts show that the Id. AO had applied his mind to the facts of the case and had made due diligence as was required of him. These facts also reveal that there was sufficie....
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....rchase by assessee received by the DRI from CCE which was passed on to Revenue Authorities was 'tangible material outside record' to initiate valid reassessment proceedings. SLP filed against this decision was dismissed by the Hon'ble Supreme Court. Similarly, in this case too, information supplied by the Directorate of Income Tax (Investigation), Bhubaneshwar, was 'tangible material outside record' and the Ld. AO validly reopened the proceedings u/s 148. 8.2.2 Further, in the case of Pushpak Bullion Pvt. Ltd. vs. DCIT the Gujarat High Court held that where investigation wing of department had during course of investigation in case of a third party found that he had indulged in providing accommodation entries and bogus bills, and assessee had made sizeable purchases from him, reopening notice against assessee was justified. 8.3 In view of the above referred facts and decisions, this argument is rejected and the ground of appeal is dismissed". 6. Another ground raised by the assessee while challenging the validity of the order passed by the Assessing Officer under section 144/147 of the Act was that the ITO, Ward-2(3), Cuttack, who issued the notice under se....
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....paragraph no. 9.3 to 9.11 of his impugned order as under:- "9.3. As is evident from the above referred sections and their provisions, the Income Tax Act does not specify the jurisdiction of the Assessing Officer. It leaves it to the CBDT to assign the same to the assessing officers either own its own motion or through delegation of this power to the Chief Commissioner or Director General or the Commissioner of Income Tax. Thus, the issue of jurisdiction is a matter of administrative decision and is not borne out of the statute. The statue only provides a broader out line in section 120(3). Jurisdiction over a case cannot be assumed suo-moto by the assessing officer. It is conferred on him by an order by the Chief Commissioner of Income Tax or the Director General of Income Tax or, as the case may be, by the Commissioner of Income Tax. In each Region or Charge in the Department of Income Tax, there are clear orders related to jurisdiction of the assessing officer manning each and every Ward/ Circle or Range. It is this jurisdiction assigned to the assessing officer that he assumes. This fact is further clear if the following expressions in the above referred sections are referre....
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.... raised serious questions about jurisdiction, in order to bring more facts on record, the ld. AO was directed to conduct further fact findings and send a report in respect of history of returns filed by the appellant and the history of jurisdiction over his PAN. The ld. AO has reported that: The ld. AO's report: 9.7.a. Jurisdiction over PAN: After transferring PAN on 15.09.2018,vide order u/s 127(2) of the IT Act, 1961 dated 14th September 2018 passed by Pr. CIT, Cuttack, ITO Ward 38(4), Midnapore holds the Jurisdiction over the assessee from 15.09.2018 onwards. Before 15.09.2018, the jurisdiction over the assessee was lying with ITO, Wd. 2(3), Cuttack. 9.7.b. As per ITBA PAN Jurisdiction history details, it is revealed that PAN jurisdiction over the assessee before 15.09.2018 had been lying with ITO, Ward 2(3), Cuttack. Consequent upon the order u/s 127 (1) of the IT Act, 1961 dated 14th Sept. 2018 to ITO Ward 38(4), Midnapore, it has been lying with ITO ward 38 (4), Midnapore. 9.7.c. Return of Income: Returns of Income for the AY 2011-12 and 2012-13 had not been -filed by the assessee. The return of income for AY 2009-10 and 2010-11.have been filed by the assessee on ....
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....e no such return, after the expiry of the time allowed by the notice under subsection (2) of section 139 or under section 148 for the making of the return. 9.11 In this case, the appellant did not file his return of income in response to the notice u/s 148 of the Act. Therefore, his opportunity to raise an objection on the issue of jurisdiction lapsed after the time allowed to file a return u/s 148 got over. I, thus find, the appellant's case is squarely covered by the provisions of section u/s 124(5) (b) of the Act. In view of this fact, the arguments raised by the Id. AR on behalf of the appellant are rejected". 7.1. The ld. CIT(Appeals) thus held that the ITO, Ward-2(3), Cuttack was holding jurisdiction over the assessee's case when the notice under section 148 was issued by him and the jurisdiction over the assessee's case remained with the ITO, Ward-2(3), Cuttack till such time it was assigned to the ITO, Ward-38(4), Midnapore by the Principal CIT. He accordingly rejected the contentions raised on behalf of the assessee in support of this issue and upheld the validity of assessment made by the Assessing Officer under section 144/147 of the Act. The ld. CIT(Appeals) also....
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....ended that the return for assessment year 2016-17 was filed by the asseessee online giving the address at Midnapore, West Bengal and thus the intimation of new address was duly given by the assessee, which was duly acknowledged even by the ITO, Ward-2(3), Cuttack by mentioning the same in the notice issued under section 148. He contended that the notice issued by the ITO, Ward-2(3), Cuttack under section 148 on 30.03.2018 having no jurisdiction over the assessee's case was invalid and there being no notice issued under section 148 by the ITO, Ward-38(4), Midnapore, who had jurisdiction over the assessee's case at the relevant time and who finally completed the assessment under section 144/147, the entire proceedings under section 147/148 were bad-in-law and the assessment made in the case of the assessee under section 144/147 is liable to be cancelled being invalid. 10. The ld. D.R., on the other hand, strongly supported the impugned order of the ld. CIT(Appeals) on this issue upholding the validity of the notice issued by the ITO, Ward-2(3), Cuttack under section 148 to the assessee on 30.03.2018. She read out and relied on the observations/findings recorded by the ld. CIT(Appeal....
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....essee at Midnapore, West Bengal, address in the PAN data must have been changed by the time the notice under section 148 came to be issued. He contended that the address of the assessee in PAN database thus was already changed by the time notice under section 148 was issued and consequently the jurisdiction over the assessee's case was also transferred from ITO, Ward-2(3), Cuttack to the ITO, Ward-38(4), Midnapore. 12. We have considered the rival submissions and also perused the relevant material available on record. The ld. Counsel for the assessee has challenged the jurisdiction of the ITO, Ward-2(3), Cuttack to issue notice under section 148 on the ground that the address of the assessee having been changed to Midnapore, West Bengal before the issuance of notice under section 148 on 30.03.2018, the ITO, Ward-2(3), Cuttack had no jurisdiction over the assessee's case and the notice issued by him under section 148 to the assessee was invalid. He has contended that the proceedings initiated in the assessee's case under section 147/148, therefore, were invalid ab initio and the assessment made under section 144/147 is liable to be cancelled being bad-in-law. In this regard, it is ....
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....apore was clearly given and the ITO, Ward-2(3), Cuttack while issuing notice under section 148 on 30.03.2018 was well aware of the new address of the assessee. In this regard, the ld. D.R. has relied on the judgment of the Hon'ble Supreme Court in the case of Principal CIT -vs.- M/s. I-Ven Interactive Limited, Mumbai (supra), wherein Their Lordships have clearly held that a mere mentioning of the new address in the return of income without specifically intimating the Assessing Officer with respect to change of address and without getting PAN database changed, is not enough and sufficient. Elaborating further Hon'ble Supreme Court has observed that in the absence of any specific intimation to the Assessing Officer with respect to the change in address, the Assessing Officer would be justified in sending the notice at the available address mentioned in PAN database of the assessee, more particularly when the return has been filed under 'E-Module Scheme'. Keeping in view this proposition propounded by the Hon'ble Apex Court, we are unable to accept the contention raised on behalf of the assessee that a mere mentioning of the new address in the return of income filed subsequently for A....
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....iew that the ITO, Ward-2(3), Cuttack was having jurisdiction over the assessee's case on 30.03.2018 when the notice under section 148 was issued to the assessee and the said notice issued by the Assessing Officer having jurisdiction over the assessee's case at the relevant time was a valid notice as rightly held by the ld. CIT(Appeals). 16. The second contention raised by the ld. Counsel for the assessee while challenging the reopening of assessment as made by the ITO, Ward 2(3), Cuttack is that the assessment was reopened by the Assessing Officer by issuing a notice under section 148 mechanically without applying his mind to the material available on record. He contended that the Assessing Officer simply relied on the information supplied by the Directorate of Income Tax (Investigation) and formed the reasons to believe that the income of the assessee had escaped assessment for the year under consideration. He contended that the belief of the Assessing Officer regarding the escapement of income of the assessee was based on imaginary story and not on facts as is evident from the reasons recorded by him. He contended that the Assessing Officer did not apply his mind properly and in....
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....so perused the relevant material available on record. In order to appreciate the stand of both the sides on this issue, it would be relevant to refer to the reasons recorded by the Assessing Officer for reopening the assessment, which are extracted below:- ".........Information received from the Investigation wing, Bhubaneswar shows that the assessee, Shri Saha had purchased an immovable property on 30.04.2008 for Rs. 29,30,000/- and sold the same on 16.08.2011 for Rs. 1,37,00,000/-and as such, he is liable to pay long term capital gain towards the said transaction. Analysis of information collected/ received: On going through the sale deeds of the both the transaction, it is found that the assessee purchased the land from one Ms Rabiya Khanum of Buxi Bazar on a cost of Rs. 29,30,000/- in the year 2008-09 and sold the property to Sri Pawan Kumar Jajodia, Purighat, Cuttack with Rs. 1,37,00,000/- in the year 2011-12. Furthermore, it was seen that one account in Bank of India, Nayasarak, Cuttack was opened only for the purpose of the buying the property and the same was closed after the transaction. Enquiries made by the AO as sequel to information collected/received: The above ....
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....nformation was received by him from the Investigation Wing, Bhubaneswar that the assessee had purchased a immovable property for Rs. 29,30,000/- on 30.04.2008 and the same was sold on 16.08.2011 for Rs. 1,37,00,000/-. The said information received by the Assessing Officer was duly supported by the documentary evidence in the form of sale deeds of both the transactions and after going through the same, it was noted by the Assessing Officer that the sale of immovable property of the assessee had given rise to a long-term capital gain, which was chargeable to tax in the hands of the assessee for the year under consideration, i.e. A.Y. 2012-13. The Assessing Officer also computed such long-term capital gain chargeable to tax in the hands of the assessee for the year under consideration at Rs. 97,48,025/- and when he sought to cross-verify the same with the return of income filed by the assessee, it was found that the assessee had not filed his return of income for the year under consideration. It is thus clear that the specific information received by the Assessing Officer, which constituted tangible material, was analysed, verified and cross-checked by the Assessing Officer and after ....