TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 795
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....turn 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 the law and facts on record and he requested that impugned order....
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....d 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 test of (i) the convenience of the assessee, and (ii) the exigencies of tax collection." CIT Vs. Lalit Kumar bardia, ITA ....
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.... 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. In the reasons so recorded by the ITO, Ward 1(4), Jaipur, the name and of address of the assessee has been stated as Sh. Tarachand Ajmera, 3659, Bhoot Ke Kuye Ki G....
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....), 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 be sustained and set-aside for want of requisite jurisdiction." CIT vs. Anjali Dua, (2008) 219 CIT 183 (Del) "4. It is in this background that the Tribunal noted that the request of the assessee to transfer the jurisdicti....
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....rmined 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 of "e" filing of return, the assessee has to fill PAN on the return. It has to also fill its address and some of the details are picked-up by the assesse. If the Department's system fails to correctly transfer the return to the jurisdictional Assessing Officer and transfer the same to a Ass....
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.... 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 transfer of cases. Their Lordships have held that an assessee is entitled to be assessed by the ITO of the particular area where he resides and carries on his business. If a question may arise as to the place of assessment it is to be determined by the CIT. The principles underlying determination of jurisdiction on which the provisions are based are: (i) con....
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....O 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 jurisdiction over the case, who has relevant returns and other material in his possession. Section 148(1) of the Act envisages that before making the assessment, reassessment or re-computation u/s 147, the AO shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act duri....
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.... 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-tax Officer alone is entrusted with the power to administer the Act; if he has information from which it may be said, prima facie, that he had reason to believe that income chargeable to tax had escaped assessment, it is not open to the High Court, exercising powers under article 226 of the Constitution, to set aside or vacate the notice for reassessment on a reappraisal of the evidence. The ITO referred to herein is, ITO having jurisdiction over the assessee ....
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....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 section 148 issued by another ITO who had no jurisdiction over the assessee is not valid. Reassessment was also held to be invalid for the reason that the jurisdiction over assessee's case was not transferred by any order passed under section 127 by any competent authority to the ITO who passed the impugned assessment order. (i) Ranjeet Singh v. Asstt. CIT [2009] 120 TTJ (Delhi) 517 wherein the Tribunal held that notice under section 148 issued by the ITO at Ghaziabad to the assessee who was assessed....
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....ssistant 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) by virtue of the directions / orders passed u/s 120, sub-section (1) & (2)'. Thus, the notice u/s 148 is required to be issued by the Assessing Officer who is vested with the jurisdiction over the assessee on the basis of the criteria of territorial area, a person or classes of persons, income or classes of incomes and cases or classes of cases as enumerated in sub-section 3 of section 120 of Income Tax Act. It is not the case of the Revenue that the Assessing Officer who has issued the notice u/s 148 was vested with the jurisdiction by virtue of any d....
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....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 issuing a fresh notice under section 148 of the Act. Therefore, since the Assessing Officer, having jurisdiction over the assessee, completed the reassessment without issuance of notice under section 148 of the Act, the reassessment order passed is invalid and cannot be sustained. It is, accordingly, set aside and cancelled". 9. After going through the aforesaid written submissions filed by the assessee alongwith the case laws mentioned by the assessee's counsel in her written submissions especially the finding given by the learned First Appellate Authority at page 13 to 18. For the sake of co....
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.... 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. Act, 1961. Since, the ITO, Ward 2(2) has not issued any notice u/s 148 and has completed the proceedings on the basis of the notice issued by ITO, Ward 2(2), Jaipur, therefore, the assessment framed by the ITO, Ward 2(2), Delhi was ab initio and needs to be quashed. The appellant in this regard has relied upon the judgment rendered by Hon'ble High Court of Delhi in case of Commissioner of Income-tax v. -6 v. Smt. Anjali Dua [2008] 174 TAXMAN 72 "4. It is in this background that the Tribunal noted that the request of the assessee to transfer the jurisdiction was noted in the letter dated 25-3-1998 whereby the no objection of Commis....
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....ings 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 of the I.T. Act, 1961 depends upon the issuance of a valid notice u/s 148 after recording his own "reason to believe" that certain income has escaped assessment and if the notice issued u/s 148 is invalid for any reason the entire proceedings would become void for want of jurisdiction. In support of its contention, the appellant has relied upon the following judicial pronouncements: a. Income-tax Officer, v M/s Indus Valley Investment & Finance P. Ltd.[July 2012] (assessment year 2002-03) ITA no.4239 /Del/2011 (ITAT - Delhi) "FACTS The assessee filed its return declaring income of 37,440/-, was processed u/s 143(1) of the I.T. Act. Based upon information received from DIT (....
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....eing 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 [2011] 12 taxmann.com 318 (ITAT - Delhi) "Section 148, read with section 143 of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for - Assessment year 2001-02 - Whether where Assessing Officer on basis of notice under section 148 issued by another Income-tax Officer, framed reassessment under section 143(2) without recording any reasons and without issuing a fresh notice under section 148, reassessment so framed was invalid in law and, thus, it was liable to be quashed - Held, yes" FACTS ITO, Ward-21(3), Ghaziabad, based on information received by him from Addl. CIT, Range-1, Ghaziabad, regarding receipt of Rs. 5 lakhs on 19-2-2000 from Sanjay Mohan Aggarwal recorded reasons of income escaping assessment on 25-3-2008 and issued notice....
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....ormed 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 copy of the said order is placed before me and the appellant has filed its balance sheet for F.Y. 2010-11, 2011-12, 2012-13 and 2013-14 before Registrar of Companies, NCR Delhi. All these facts established that ITQ, Ward 2(2), Jaipur had issued notice to the appellant company without having jurisdiction over the appellant's case and the ITO, Ward 2(2), New Delhi has continued with the said proceedings and completed the assessment u/s 143(3) read with Section 147 of the I.T. Act which is invalid in the eyes of law. The ITO, Ward 2(2) has assumed jurisdiction without recording his own satisfaction and without issue of notice u/s 148 of the I.T. Act. From the factual as well as legal position discussed above, it is seen that facts of the appellant's case are identical with the various decisions relied upon by the appellant, th....