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2020 (10) TMI 795
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....ecute all kind of financial operations and has filed its return of income under section 139(1) (hereinafter referred to as the I.T. Act, 1961) for the assessment year 2008-09 declaring NIL income. Assessment under section 147 read with section 143 of the Act made on 15.03.2016 determining total income of Rs. 2,84,32,500/-. In the assessment order, Assessing Officer treated the share capital / premium of Rs. 4,08,75,000/- during the year as unexplained cash credit by reducing addition of Rs. 1,30,00,000/- made in the assessment year 2007-08. The AO also added Rs. 5,57,500/- being 2% commission paid by the appellant for obtaining accommodation entries. 3. Assessee filed an appeal against the assessment order before the learned First Appellate Authority who vide impugned order dated 12.04.2017 allowed the appeal filed by the assessee and quash the assessment order on legal ground. 4. Aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 5. At the time of hearing learned Departmental Representative relied upon the order passed by Assessing Officer and stated that the learned First Appellate Authority has passed an illegal order which is contrary to....
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....fined in the Explanation enacted to s. 127. That being the position of law, we are very clear in our mind that the petitioners having shifted their business/profession and residence-both in July, 1984, from Amritsar to Delhi, the return could have been filed only before an AO having jurisdiction over the area where the business/profession of the petitioners was situated. If there was any doubt, the petitioners could have moved under s. 124(2) for determining the question of jurisdiction which the petitioners have not done. The proceedings finalised at Amritsar after the petitioners had ceased to have their business/profession at Amritsar would be without jurisdiction. 14. Once it has been found that the two petitioners had their business/ profession situated at Delhi, the assessing authority having natural jurisdiction over the area would have jurisdiction to assess them, issue notices under s. 148 as well, though referable to the period when they were assessed or were assessable at Amritsar by virtue of ss. 124(1) and 124(5) r/w s. 120(1). No order under s. 127 or even s. 124(2) was called for. Such an interpretation and the view of the law satisfies the twin tes....
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....N of the deceased assessee was not transferred to ITO Ward 2(1) and continues with ITO Ward 1(4) and having issued the notice u/s 148, she continued with the proceedings and passed the assessment order u/s 147 read with 143(3) of the Act. Therefore, even though notice has been issued by ITO, Ward 1(4), Jaipur but once she is clear that the jurisdiction over the matter lies with ITO, Ward 2(1), Jaipur, merely because the permission has not been received from the ld. Pr. CIT for transfer of PAN, she cannot proceed and pass the assessment order in absence of requisite jurisdiction at first place which is governed by last known residence address of the deceased assessee as mandated by section 124(1)(b) of the Act. Therefore, where there is no dispute that the jurisdiction over the deceased assessee lies with ITO Ward 2(1), Jaipur, the assessment order passed by ITO Ward 1(4) cannot be sustained and set-aside for want of requisite jurisdiction. Where there is no dispute that the jurisdiction over the deceased assessee lies with ITO Ward 2(1), Jaipur, the assessment order passed by ITO Ward 1(4) cannot be sustained and set-aside for want of requisite jurisdiction. "7. I....
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....s with ITO Ward 1(4) and having issued the notice u/s 148, she continued with the proceedings and passed the assessment order u/s 147 read with 143(3) of the Act. Therefore, even though notice has been issued by ITO, Ward 1(4), Jaipur but once she is clear that the jurisdiction over the matter lies with ITO, Ward 2(1), Jaipur, merely because the permission has not been received from the ld. Pr. CIT for transfer of PAN, she cannot proceed and pass the assessment order in absence of requisite jurisdiction at first place which is governed by last known residence address of the deceased assessee as mandated by section 124(1)(b) of the Act. The fact that jurisdiction over last known residence address of the deceased assessee lies with ITO Ward 2(1), Jaipur is also corroborated by the assessment order passed for same assessment year 2008-09 in case of the legal Heir, Shri Subhash Chand Ajmera who happens to share the same residential address as that of the deceased assessee and which is passed by ITO Ward 2(1), Jaipur. Therefore, where there is no dispute that the jurisdiction over the deceased assessee lies with ITO Ward 2(1), Jaipur, the assessment order passed by ITO Ward 1(4) cannot ....
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....ssessee filed the return under protest. The question of jurisdiction arose. Their Lordships opined that the contention of the assessee was without foundation: "Now the place where an assessment is to be made pursuant to a notice under s. 22(2) has to be determined under s.64. Indeed that is the only provision in the Act for deciding the proper place for any assessment. There is nothing which makes s. 64 inapplicable to an assessment made under s. 34. Therefore, it seems to us clear, that the place where an assessment under s. 34 can be made has to be decided under s. 64. Now the appellant was not carrying on any business, profession or vocation. He was working as the Defence Minister of the Government of India and residing in Delhi. He could be properly assessed by the Income-tax Officer, Delhi, under s. 64(2) if the assessment was the original assessment. This is not in dispute. It follows that no objection can legitimately be taken by the appellant to his assessment under s. 34 by the ITO, Delhi." Sections: 34- s.147, 64- s.120, 22(2)-143(2) K.A. WIRES LTD. VERSUS INCOME TAX OFFICER, ITA 1149/Kol/2019, dt. 22.01.2020 "Under the scheme ....
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....risdiction over the assessee i.e., ITO Ward - 8(3), Kolkata had not issued the notice to the assessee u/s 143(2) of the Act as mandatorily required under the Act, the assessment framed u/s 143(3) of the Act, is bad in law as held by the Hon'ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon: 321 ITR 362 (SC)." In M. Ramasamy Asari vs. ITO (1964) 51 ITR 57 (Mad), the Division Bench has held "In regard to the business income of an assessee it is only the ITO having jurisdiction over the place where his business activities are concentrated who would have jurisdiction to assess; where the assessee has no business it is the place of residence that determines jurisdiction. No other officer except the officer having territorial jurisdiction, either over the place where the assessee is carrying on business or over the place where he is residing, if there is no business, would have jurisdiction, and any assessment passed by any other officer would be illegal." In Pannalal Binjraj vs. Union of India AIR (1956) 31 ITR 565 (SC) their Lordships have vide para. 20 analysed the scheme of the provisions in the IT Act relating to jurisdiction and tr....
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....ssuance of a valid notice. If the notice issued by him is invalid for any reason the entire proceedings taken by him would become void for want of jurisdiction." ITO vs. Indus Valley Investment and Finance Limited, ITA 4239/Del/2011, dt. 06.07.2012 "5. We have heard both the parties and gone through the facts of the case. The issue before us is as to whether the reassessment framed by the AO i.e ITO Ward- 11(4), New Delhi, in pursuance to a notice dated 31.03.2008 u/s 148 of the Act, issued by Income-tax Officer, Ward-2, Gurgaon, who did not have jurisdiction over the case of the assessee, is valid one. A mere glance at the relevant provisions reveals that section 147 authorizes and permits the AO to assess or reassess income chargeable to tax if he has reason to believe that income for assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the AO has cause or justification to know or suppose that income has escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The reason to believe must be that of the concerned AO, having juri....
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.... by the ITO Ward- 2, Gurgaon. This was objected to by the assessee vide letter dated 3-12-2008. Apparently, the jurisdictional AO i.e. ITO, Ward-11(4),New Delhi never acquired jurisdiction to re- assess the income of the assessee under section 147 of the Act nor ever recorded the reasons in writing as stipulated in the said section reasons for reopening of any assessment have to be recorded by jurisdictional AO alone because he maintains the relevant and primary records. The basic requirement u/s 147 of the Act is that the AO has reason to believe that any income chargeable to tax has escaped assessment. Such belief can be of jurisdictional AO alone and not of any other AO or authority. Reassessment proceedings initiated on the directions given by the CIT were held to be invalid in CIT v. T. R. Rajkumari [1973] 96 ITR 78 (Mad.) & Sheo Narain Jaswal & Ors. v. ITO & Ors. [1989] 176 ITR 352 (Pat.). Hon'ble Apex Court in CIT v. A. Raman & Co., [1968] 67 ITR 1 (SC) observed that whether on the information in his possession he should commence a proceeding for assessment or reassessment must be decided by the Income-tax Officer and not by the High Court. The Income-t....
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.... by Dy. CIT, Circle 21(2), New Delhi, and notice issued by the ITO, Ghaziabad, was invalid." Dr. Mrs. K.B. Kumar vs. ITO, ITA 4436/Del/2009, "5. The learned Authorised Representative for the assessee contended before us that the reassessment order passed by the ITO, Ward-34, New Delhi was without jurisdiction and liable to be quashed because he has simply framed the reassessment by issuing a notice under section 143(2) on 16-12-2008 without recording any reasons and without issuing a fresh notice under section 148 of the Act. He further submitted that now the issue, i.e., whether in the absence of any valid recording of reasons by the Assessing Officer having jurisdiction and without issuing notice under section 148 the order passed by the Assessing Officer was without jurisdiction and liable to be quashed, stands covered in favour of assessee and against the revenue. In support of his contentions, the learned Authorised Representative for the assessee relied on the following decisions: ITO v. Krishan Kumar Gupta [2008] 16 DTR 1 (Delhi - Trib.) wherein the Tribunal, Delhi Bench 'E' held reassessment completed by an ITO on the basis of notice under....
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....ime before us after completion of the assessment but, since the assessee has raised this objection right from the beginning and the Assessing Officer as well as CIT (A) has given a finding, therefore, this issue does not question the jurisdiction of the AO who has completed the re-assessment but questions the validity of Notice u/s 148 and emanates from the impugned orders of the authorities below. The definition of the Assessing Officer as provided u/s 2(7A) of the Income Tax Act means "the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or ITO who has vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section 1 or sub-section (2) of section 120 or any other provisions of this Act" 11. Section 148 mandates issue of notice before assessment, reassessment or computation u/s 147. As per section 148, it is mandatory that the Assessing Officer shall serve on the assessee a notice required him to furnish a return. The expression "Assessing Officer" used in the section 148 means 'the Assessing Officer vested with the jurisdiction over the assessee as stipulated in the definition u/s 2(7A) b....
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....ice u/s. 142(1). The Assessee informed the AO about its jurisdiction to be assessed at Delhi and requested for transfer of records at Delhi and accordingly, the case was transferred. Accordingly, the notice u/s. 142(1) and 143(2) was issued by the Jurisdictional AO Ward 18(2), New Delhi for the first time on 15.10.2013 and no notice u/s. 148 was ever issued by the jurisdictional AO. Hence, the Ld. CIT(A)'s action of confirming the validity of assessment made by the ITO, Ward 28(2), New Delhi without service of valid notice under section 148 is not sustainable in the eyes of law and needs to be quashed." Ramesh Mishra vs. DCIT 646/Luc/2018, dt. 20.09.2019 "9. Principal CIT-II, Lucknow v. Mohd. Rizwan, Prop. M/s M.R. Garments Moulviganj, Lucknow (supra), thus, in effect, holds, answering the question in favour of the assessee, that where a notice under section 148 of the Act was issued by an incompetent officer, i.e., one who has no jurisdiction, and subsequently, on the objection of the assessee with regard to the jurisdiction, the matter is transferred to the Assessing Officer having jurisdiction, a valid assessment cannot be made by him without issui....
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....t also contended that after receipt of notice u/s 148 of the I.T. Act for the AY under consideration, appellant vide letter dated 15.11.2014 submitted before the ITO, Ward 2(2) Jaipur stating that it has shifted its registered office from Jaipur to Delhi and address has also been changed in PAN database and therefore, the appellant requested the ITO, Jaipur to transfer the case of the appellant from Jaipur to Delhi. In view of the above facts, the appellant has challenged the assumption of jurisdiction by the Assessing Officer ITO, Ward 2(2) u/s 147 of the I.T. Act and has stated that assessment is void ab initio and liable to be quashed as the Assessing Officer cannot assume jurisdiction without issue of notice u/s 147 of the I.T. Act. It is contended by the appellant that ITO, Ward - 2(2), Jaipur at the time of issuing notice u/s 148 of the I.T. Act, 1961 did not have any jurisdiction over the appellant's case, hence, the appellant submitted that notice issued u/s 148 by the ITO, Ward - 2(2), Jaipur in the case of appellant, was invalid. The appellant submitted that ITO, Ward - 2(2), New Delhi was the only competent authority to issue notice u/s 148 of the I.T. ....
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....59] 35 ITR 388. Held that Service of requisite notice is a condition precedent for validity of reassessment made under section 34 of 1922 Act, and a notice prescribed by section 34 of 1922 Act cannot be regarded as a mere procedural requirement; it is only if said notice is served on assessee as required then ITO would be justified in taking proceedings against him." The appellant also contended that the jurisdictional AO, ITO, Ward - 2(2), New Delhi continued with the proceedings initiated u/s 147 by the assessing officer, ITO, Ward - 2(2), Jaipur who had issued notice without jurisdiction, therefore, notice issued by him was invalid. The proceedings continued with that invalid notice, will automatically be invalid, since no fresh notice u/s 148 of the I.T. Act, 1961 has been issued by the jurisdictional assessing officer, ITO, Ward - 2(2), New Delhi and thereby no satisfaction in the form of reason has been recorded by the jurisdictional AO which is sine qua non for assumption of jurisdiction u/s 147 of the I.T. Act, 1961. The appellant contended that it is settled law that jurisdiction of the assessing officer to reopen an assessment u/s 147 o....
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....risdiction over the assessee, issued a notice u/s 148 of the Act as soon as the assessee informed him that jurisdiction over his case was vested with ITO Ward- 11 (4), New Delhi, records were transferred to New Delhi. Thereafter, the said ITO proceeded to complete the assessment without even recording reasons to believe stipulated in section 147 or issuing any notice u/s 148 of the Act. Apparently, the ITO Ward 11(4), New Delhi committed an irregularity by not issuing notice u/s. 148 of the Act again and instead continued the proceedings u/s. 148 of the Act, initiated on 31.3.2008 by the ITO Ward- 2, Gurgaon. It is well- settled that if a notice under section 148 of the Act has been issued without the jurisdictional foundation u/s 147 of the Act being available to the AO, the notice and the subsequent proceedings will be without jurisdiction and thus, liable to be struck down . In view of the foregoing, we have no hesitation in upholding the findings of the Id. CIT(A), quashing the reassessment order. Consequently, ground no1 in the appeal is dismissed. " b. The appellant has also relied upon the judgement of Hon'ble ITAT in the case of Dr. Mrs. K.B. Kumar v. ITO ....
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....risdiction over the case of the appellant as the Director of the appellant had informed the ITO, Ward 2(2) through telephone which is recorded by the ITO, Ward 2(2) in his letter dated 04.03.2014 written to the Director of the appellant company. In the said letter, the Director informed the AO that he is filing his return at Delhi and has already shifted his office to New Delhi. It is also seen that appellant has got its address changed in PAN database and the same was communicated to the appellant by Income Tax PAN Services Unit vide its letter dated 26.03.2014 for change of address at New Delhi. It is also seen that after issue of notice, the ITO, Ward 2(2) vide his letter dated 20.05.2014 has written to CIT-I, Jaipur has mentioned that he has contacted Sh. Deepak Tyagi, Director of the appellant company wherein he has informed that appellant company has shifted its office to New Delhi and regularly filing its return of income at Delhi, therefore, ITO requested the CIT to transfer the case to ITO, Ward 2(2), New Delhi immediately. It is also seen that appellant company changed its registered office from Bhiwadi to New Delhi vide its Company Law Board order dated 22.09.2010. The c....