TaxTMI 
TaxTMI 
2023 (3) TMI 1240
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....g addition of Rs.24,79,290/- as unexplained cash deposit without considering facts and evidences in their entirety. 3. The impugned order is bad in law. 4. The appellant reserves the right to add, amend, alter, omit or withdraw all or any of the grounds of appeal." Also the assessee has raised an additional ground of appeal which reads as under: "In the facts and circumstances of the case and in law, the assessment order is bad in law, illegal and without jurisdiction for the assessment order was passed by the Income-tax Officer-1(3), Bhilai while notice u/s.148 of the Income Tax Act, 1961 was issued by the Income Tax Officer 1(1), Bhilai being the jurisdictional officer." 2. Succinctly stated, the A.O on the basis of AIR information that the assessee had made cash deposits of Rs.28.50 lac in his saving bank account No.20057093434 with State Bank of India, Branch : Kumhari, Bhilai but had not disclosed the same in his return of income for the year under consideration thus, reopened his case u/s.147 of the Act. Notice u/s.148 of the Act, dated 25.10.2016 was thereafter issued by the ITO, Ward-1(1), Bhilai. 3. During the course of assessment procee....
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....ty of the jurisdiction assumed by the A.O for framing of the assessment vide his order passed u/s.143(3) r.w.s. 147 of the Act dated 29.12.2017, which involves purely a question of law based on the material available on record and would not require looking into facts any further beyond those available on record, therefore, after hearing the ld. authorized representatives of both the parties I have no hesitation in admitting the same. My aforesaid view that where an additional ground of appeal involving purely a question of law requiring no further verification of facts is raised before the Tribunal, though for the first time, then, the same merits admission is supported by the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC). 9. I shall first deal with the claim of the Ld. Authorized Representative (for short 'AR') for the assessee that as the A.O i.e. ITO, Ward-1(1), Bhilai had wrongly assumed jurisdiction and reopened the case of the assessee u/s.147 of the Act, therefore, the consequential assessment so framed u/s.143(3) r.w.s 147 of the Act dated 29.12.2017 being based on illegal assumption of jurisdicti....
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....for want of valid assumption of jurisdiction by the A.O at the stage of issuance of notice u/s.148 of the Act. 10. Per contra, the Ld. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. 11. As observed by me hereinabove, it is a matter of fact borne from record that proceedings u/s.147 of the Act were initiated in the case of the assessee by the ITO, Ward-1(1), Bhilai on the basis of the following "reasons to believe": "Reasons for issuing notice u/s.148 As per the information available on records of this office, the assessee has made cash deposits of Rs.28,50,000/- in his bank account during the F.YR. relevant to the assessment year under consideration. However, it is also on records that the assessee has not filed return of income for the said assessment year. Further it is also on records that the assessee was in receipt of Rs.1,89,792/- on which T.D.S under section 194A has been deducted during the financial year under consideration. Thus I have reasons to believe that income to the extent of Rs.28,50,000/- and Rs.1,89,792/- (Total Rs.30,39,792/-) has escaped assessment within the meaning of prov....
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.... had pursuant to receipt of the assessee's case a/w. records had not issued any fresh notice u/s.148 of the Act and had proceeded with on the basis of that as was issued by the ITO, Ward- 1(1), Bhilai on 25.10.2016. 12. At this stage, I may herein observe that as the ITO, Ward-1(1), Bhilai was admittedly pursuant to the Notification No 01/2014-15 dated 15.11.2014 issued by the Joint Commissioner of Income Tax, Range-2, Bhilai at the stage of initiation of proceedings u/s.147 of the Act was not having any jurisdiction over the assessee's case, therefore, both the recording of "reasons to believe" on 09.05.2016 and the issuance of notice u/s.148 on 25.10.2016 by him was devoid and bereft of any force of law. Although the ITO, Ward-2(1), Bhilai on transfer of assessee's case a/w records, i.e. on 03.08.2017 had substantial time available with him to issue notice u/s.148 of the Act to the assessee, but no such notice was ever issued by him. 13. Considering the aforesaid factual position I find that my indulgence has been sought for adjudicating the sustainability of the order passed by the A.O u/ss.143(3)/147 dated 29.12.2017, which in turn is based on the initiation of proceeding....
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....erefore, he was precluded from assailing the same in the course of present proceedings, I am unable to persuade myself to subscribe to the same. As the assessee involved in the present appeal had not challenged the territorial jurisdiction of the A.O, but in fact had assailed the very inherent jurisdiction of the ITO Ward-1(1), Bhilai for issuing notice u/s.148 dated 25.10.2016, therefore, on the said count itself the aforesaid objection so raised by the Ld. DR cannot be accepted. 17. Apart from that, the contention of the Ld. DR that now when the assessee as per the mandate of sub-section (3) of Section 124 had not called in question the jurisdiction of the A.O within the stipulated time period of one month from the date of receipt of notice u/s.148, dated 25.10.2016 from the ITO, Ward-1(1), Bhilai, therefore, he could not have assailed the same for the very first time in the course of the present proceedings, in my considered view does not merit acceptance. As stated by the Ld. AR and, rightly so, as the notice u/s.148, dated 25.10.2016 issued by the Income-Tax Officer, Ward- 1(1), Bhilai was not a notice issued by an authority falling within the meaning of an "Assessing Offic....
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..... Raisoni & Sons Vs. Assistant Commissioner of Income Tax & Anr (2019) 260 Taxman 281 (Bom.), had observed, that the time limit for raising objection to the jurisdiction of the A.O prescribed under subsection (3) of Section 124 has a relation to the A.O's territorial jurisdiction and the same would not apply to a case where the assessee contends that the action of the A.O is without authority of law and therefore, wholly without jurisdiction. For the sake of clarity, the relevant observation of the Hon'ble High Court is culled out, as under: "7. We are also in agreement with the contention of the Counsel for the petitioner that the petitioner's objection to the jurisdiction of the Assessing Officer on the ground that if no search was initiated, notice under Section 153A of the Act could not have been issued, cannot be curtailed on the ground that such objection was raised beyond the period referred to in sub-section (3) of Section 124 of the Act. Section 124 of the Act pertains to jurisdiction of Assessing Officers. Sub- section (1) of Section 124 lays down territorial jurisdiction of the Assessing Officer. Sub-section (2) of Section 124 provides that where the questio....
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....er or Assessing Officers from whom the case is transferred, but the same would by no means come to the rescue of the revenue in the present case. I, say so, for the reason that as the ITO, Ward-1(1), Bhilai at the time of initiating proceedings and issuance of notice u/s.148 dated 25.10.2016 was not vested with any jurisdiction over the case of the assessee, therefore, the aforesaid notice so issued by him de-hors valid assumption of jurisdiction will have no existence in the eyes of law and would be non-est. To sum up, the aforesaid non-est notice u/s.148 dated 25.10.2016 issued by the ITO, Ward-1(1), Bhilai can by no stretch of imagination be validated pursuant to the transfer of the case of the assessee by him on 03.08.2017 to ITO Ward-2(1), Bhilai. 21. As I have quashed the assessment for want of valid assumption of jurisdiction by the ITO, Ward-1(1), Bhilai for initiating proceedings u/s.147 of the Act on the basis of "reasons to believe" recorded on 09.05.2016 a/w. issuance of notice u/s.148 of the Act dated 25.10.2016, therefore, I refrain from adverting to and therein adjudicating the other contentions advanced by the Ld. AR as regards the merits of the case, which, thus....