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2023 (5) TMI 1048
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....ed by the Assessing Officer who did non hold jurisdiction (either territorial or class of person) over the appellant. 2. That the notice u/s 148 of the IT Act dated 30103/2015 is bad in law and without jurisdiction in as much as there was no cogent material or evidence on record to form reason to believe that any income of the assessee, for the concerned assessment year has escaped assessment. The information received (AIRICIB information) in itself was insufficient and could not be cogent material to assume a valid jurisdiction u/s 147/148 of IT Act. Learned CIT(A) turned down the submission of the assessee without looking in to the detail. 3. That the learned Commissioner of Income tax (A) further erred in law in deciding the appeal on merits only without appreciating the fact that notice u/s 143(2) of the Act was neither issued nor served on the assessee whereas it is being a mandatory requirement before passing any order u/s 143(3)/147 of the Act, assessment order passed without issue of such notice deserves to be quashed as failure to issue notice u/s 143(2) render the reassessment void. 4. That the learned CIT(A) has erred both on facts and law by u....
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....wide Interbank Financial Telecommunications (2010) 323 ITR 249." 4. Facts giving rise to the present appeal are that the Assessing Officer ("AO") was having information regarding cash deposited by the assessee in his bank account. The case of the assessee was re-opened for the assessment u/s 147 of the Income Tax Act, 1961 ("the Act"). Thereafter, the AO framed the assessment vide order dated 29.03.2016 and the income was assessed at Rs.16,89,866/- u/s 147 r.w.s. 143(3) of the Act. Thus, he treated the cash deposited in bank account as unexplained income of the assessee, even without giving set off of cash withdrawal by him. 5. Aggrieved against the action of the AO, the assessee preferred appeal before Ld.CIT(A) who after considering the submissions, dismissed the appeal of the assessee and confirmed the addition made by the AO. 6. Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal. 7. Apropos to Ground Nos. 1 to 3 raised by the assessee, are against the validity of the re-opening and framing of the assessment u/s 147/143(3) of the Act. 8. Ld. Counsel for the assessee reiterated the submissions as made in the written submission.....
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...., interest certificate and copy of invoices, AO has chosen to issue notice u/s 133(6) of the Act in two cases and one of them returned back on 10/03/2016 while other was not replied but on 08/03/2016 (two days prior the letter issued u/s 133(6) got returned back) issued a final show cause notice u/s 142(1) fixing date for 11/03/2016 for FINAL HEARING proposing addition of cash deposit in bank as undisclosed income u/s 69 A of the Act. 6. The AO committed the error of law by adding the sum of Rs. 15,31,500/- without waiting for reply (and returned post), which has resulted in non-application of the judicial mind prejudicial to the interests of the Appellant. The act of aforesaid addition of Rs. 15,31,500/- is arbitrary ignoring jurisdiction, reasons, submission of assessee (letter) and other evidences which were available on record. 7. The matter was finally discussed on 11/03/2016 (on scheduled date) with AR of the assessee and assessment was completed except issue of assessment order. AO has not issued notice u/s 143(2) and the facts came in our knowledge when the file was inspected by counsel of the assessee and the matter is agitated before First Appellate Auth....
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....ge no. 83-86), where notice u/s 148 was issued by AO, Ward 26(4), New Delhi and the file was transferred to AO ward 26(3), New Delhi who was having valid jurisdiction and assessment order was passed by AO ward 26(3), New Delhi. The Hon'ble ITAT has quashed the assessment proceeding since there was no valid notice pursuant to which assessment was made. The issue of valid jurisdiction is a condition precedent to the validity of any assessment under Section 147 of the Act; therefore, the assessment made pursuant to such notice is bad in law. 1.3 The case of Mukesh Kumar Vs. ITO (supra) is squarely applicable in the present case and hence the assessment proceeding, as the notice u/s 148 issued by non-jurisdictional AO [Ward, 65(1), New Delhi], is liable to be quashed because the notice is invalid and assessment so made without issue of fresh notice u/s 148 from AO [Ward, 65(5), New Delhi] having jurisdiction, is non est in law. Ground -2 (Related to Reason to Believe) 2.1 Notice u/s 148 dated 30/03/2015 is issued merely on the basis of AIR information. Except AIR information, Ld. AO had nothing in his possession to make a belief as to escapement of income. Ev....
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.... cases, opening of assessment u/s 148 has been questioned on the basis of invalid reason to believe and appeal has been allowed to assessee. 2.3 The Hon'ble jurisdictional Delhi High Court in case of Pr. CIT Vs. Meenakshi Overseas (395 ITR 677) (paper book page no. 132-141) has held that reasons recorded without independent application of mind, without tangible material, where link between the tangible material and formation of belief is missing, cannot be sustained. 2.4 In view of the facts and circumstances of the present case and the proposition of the law as settled in cases relied upon (mentioned above), we request your honour to quash the assessment so made on the basis of invalid notice u/s 148 of the Act. Ground -3 (Related to Non-issue of Notice u/s 143(2)) 3.1 Notice u/s 143(2) of the Act has neither been issued nor served in this case before completion of the assessment. This fact can be verified with the assessment order itself where there is no mention about issue of notice u/s 143(2). Further, order sheet maintained by the Ld. AO (paper book page no. 36-40) has confirmed the same. There is no mention about issue of notice u/s 14....
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....d vs. CIT, judgment dated 29/05/2017, the hon'ble courts on various occasions has concluded that for completion of the assessment under Section 148 of the Act, compliance with the procedure under Section 143 (2) is mandatory, and if notice is not issued to the Assessee before completion of the re-assessment, then such reassessment was not sustainable in law and liable to be quashed. 3.4 Therefore, keeping in view the facts mentioned above and decisions of the Supreme Court in ACIT Vs. Hotel Blue Moon (supra) and jurisdictional Hon'ble Delhi High Court in the cases mentioned above, we request your honour to quash the assessment as no notice u/s 143(2) was issued by the Ld.AO. We have mentioned above, all the legal issues connected with this case in summary manner for your quick view. Please allow us to present the case in detail containing all the grounds of appeal. Our submission is as under: Ground No. -1 "On the facts and circumstances of the case, the learned CIT (A) has erred in confirming the reopening of the assessment proceedings u/s 148 of the Act as a valid proceedings, though the notice u/s 148 of the Act was issued by the Assessing Off....
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....ing in Gurgaon, Haryana at the time of issue of notice, Income Tax Officer at Gurgaon is vested with the jurisdiction over the assessee on the basis of territorial criteria. In any case, notice u/s 148 was not issued by jurisdictional Assessing Officer. 1.4 As per Notification No. 70/2014 dated 13/11/2014 (Paper book page no. 220-246) which is applicable from 15/11/2014, jurisdiction of the assessee was decided by that notification and relevant extract of the list/notification are reproduced to the extent applicable in the matter at hand: New Jurisdiction of Income-tax in Delhi w.e.f. 15.11.2014 B. Non- Corporate Charges i For the purpose of jurisdiction of Non Corporate Charges (a) 'persons other than companies deriving income from sources other than income from business or profession and residing within the territorial area mentioned in column (4); (b) Persons other than companies deriving income from business or profession and whose principal place of business or profession is within the territorial area mentioned; in column (4) i.e., Municipal Wards of MCD of Delhi or other areas as mentioned. ii Cases or classes of cases has been defined as (a) A....
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....ed by assessee, Ld. AO passed an order (Paper book page no. 32-33) rejecting the objection as to jurisdiction by quoting that in absence of ITR, type of income can't be ascertained and hence PAN jurisdiction is treated as current jurisdiction and the learned CIT(A) has further erred in confirming the view of the Ld. AO in her appellate order knowing that there is no such concept of PAN jurisdiction under the Income Tax Act. 1.8 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. Further, it is settled position that where law has a clear provisions, matter should be decided by law itself and not by common sense or by giving the logic/argument suit....
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....ction conferring on the AO to reopen the assessment and their non-fulfilment renders the initiation itself ab-initio void. 1.11 The notice prescribed by section 148 cannot be regarded as a mere procedural requirement. It is only if the said notice is served on the assessee that the ITO would be justified in taking proceedings against the assessee. If no notice is issued or if the notice issued is shown to be invalid, then the proceedings taken by the ITO would be illegal and void. In support of this proposition we rely upon the cases of Hon'ble Apex Court and other Hon'ble Courts in the cases of: a) Y. Narayana Chetty Vs. ITO, 35 ITR 388, 392 (SC); b) CIT Vs. Maharaja Pratap Singh Bahadur, 41 ITR 421 (SC); c) CIT Vs. Robert, 48 ITR 177 (SC). d) CIT v. Thayaballi Mulla Jeevaji Kapasi (1967) 66 ITR 147 (SC) e) CIT v. Kurban Hussain Ibrahimji Mithiborwala (1971) 82 ITR 821 (SC) f) DR. (MRS.) K.B. Kumar vs. Income Tax Officer (2010) 131 TTJ (Del) 511 g) ITO vs. Krishan Kumar Gupta (2008) 16 DTR (Del)(Trib) (Paper book page no. 98-102) h) Ranjeet Singh vs. Asstt. CIT (2009) 120 TTJ (Del) 517 (D....
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.... information (Paper book page no. 7) which reflects the cash deposit of Rs. 15,31,500/- in saving bank account of assessee and no other tangible material was in the possession of the ld. AO. Even the bank account number (not mentioned in reasons recorded) in which cash was deposited was not known to the Ld. Assessing Officer at the time of issue of notice u/s 148. Moreover, reasons recorded by Ld. AO are totally silent as to the availability of tangible, cogent and reliable material with him on the basis of which he formed his belief and the Ld. AO fallaciously concluded that total cash deposited into the bank account of the assessee is equivalent to income escaped assessment. b) Assessing Officer has issued non-statutory inquiry letters to assessee to furnish necessary details/documents so that the source of cash deposit may be examined. As there was no response to the inquiry letter issued, the Assessing Officer formed the belief that income of the assessee had escaped assessment. c) There exists possibility as on the date of issue of notice in the opinion of Ld. AO, that there may be other income which may have escaped assessment. 2.3 The reasons recor....
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..... Nothing can be added to the reasons so recorded, nor anything can be deleted from the reasons so recorded. 2.6 Hon'ble Bombay High Court, in the case of Hindustan Lever Ltd. vs. R.B. Wadkar [(2004) 268 ITR 332], has observed that "It is needless to mention that the reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn on the basis of reasons not recorded. It is for the AO to disclose and open his mind through the reasons recorded by him. He has to speak through the reasons." Their Lordships added that "The reasons recorded should be self- explanatory and should not keep the assessee guessing for reasons. Reasons provide link between conclusion and the evidence....".Therefore, the reasons are to be examined only on the basis of the reasons as recorded. The next important point is that even though reasons, as recorded, may not necessarily prove escapement of income at the stage of recording the reasons, such reasons must point out to an income escaping assessment and not merely need of an inquiry which may result in detection of an incom....
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....time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and farfetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. 2.7 The Ld. Assessing Officer has initiated the proceeding u/s 147 of the Act by issue of notice u/s 148 of the Act is absolutely based on AIR information. No other tangible material, credible, cogent and relevant material was in his possession. Had the bank statements of the assessee was in the possession of the Ld. AO at the time of formation of his belief as to escapement of income, and had he seen the bank statement, as there is cash withdrawal to the extent of Rs. 14,80,750/-, his belief might be different than that he believed in reasons recorded. In absence of materials, belief can not be made. Hence, reasons to believe is based on surmises, conjectures, suspicion, and therefore, the same is without jurisdiction. Further, the reasons recorded are highly vague, far-fetched and cannot by any stretch of imagination lead to conclusion of escapement of income and this can only be treated as presumption. The Ld. AO has acted....
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.... to an income escaping assessment, cannot be reason enough to hold the view that income has escaped assessment. It is also important to bear in mind the subtle but important distinction between factors which indicate an income escaping the assessments and the factors which indicate a legitimate suspicion about income escaping the assessment. The former category consists of the facts which, if established to be correct, will have a cause and effect relationship with the income escaping the assessment. The latter category consists of the facts, which, if established to be correct, could legitimately lead to further inquiries which may lead to detection of an income which has escaped assessment. There has to be some kind of a cause and effect relationship between reasons recorded and the income escaping assessment. While dealing with this aspect of the matter, it is useful to bear in mind the following observations made by Hon'ble Supreme Court in the case of ITO Vs LakhmaniMewal Das [(1976) 103 ITR 437], " the reasons for the formation of the belief must have rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there mus....
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....xamine the matter in detail, but then reassessment proceedings cannot be resorted to only to examine the facts of a case, no matter how desirable that be, unless there is a reason to believe, rather than suspect, that an income has escaped assessment. In view of the reasons set out above, as also bearing in mind entirety of the case, we are of the considered view that the reasons recorded by the Assessing Officer, as set out earlier, were not sufficient reasons for reopening the assessment proceedings. We, therefore, quash the reassessment proceedings. As the reassessment itself is quashed, all other issues on merits of the additions, in the impugned assessment proceedings, are rendered academic and infructuous. 2.9 Proposition of the law as set out in the case of Bir Bahadur Singh Sijwali Vs. Income Tax Officer Ward (1), Haidwani (supra) has not been disputed by the department and has been followed in number of cases, a few is mentioned hereunder: (i) Amrik Singh Vs. ITO, [reported in 159 ITD 329 (Asr)] (ii) Vinod Maheshwari Vs. ITO, order dated 9.9.2016.[reported in ITA No. 1498/Del/2015(Delhi ITAT, SMC Bench)] (Paper book page no. 142-145) ....
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....f Income tax (A) further erred in law in deciding the appeal on merits only without appreciating the fact that notice u/s 143(2) of the Act was neither issued nor served on the assessee whereas it is being a mandatory requirement before passing any order u/s 143 (3)/147 of the Act, assessment order passed without issue of such notice deserves to be quashed as failure to issue notice u/s 143(2) renders the reassessment void." 3.1 Notice u/s 143(2) of the Act has neither been issued nor served in this case before completion of the assessment. This fact can be verified with the assessment order itself where there is no mention about issue of notice u/s 143(2). Further, order sheet maintained by the Ld. AO confirmed the same. There is no mention about issue of notice u/s 143(2) on the order sheet of the Ld. AO. Notice u/s 143(2) has not been issued by the Ld. AO1 at all and this fact is further confirmed by the counsel of the assessee who inspected the assessment file (record) after completion of the assessment and got re-confirmed when the matter was agitated before First Appellate Authority, Learned CIT (A)- XXI (who heard the appeal in detail prior to disposal by Ld. CIT(A)....
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....ught attention of the Ld. Assessing Officer that compliance of statutory requirement is mandatory and farther stated that in case of CIT Vs. Chetan Gupta, order dated 15.09.2015, the Hon'ble Delhi High Court lays down the guidelines on the issue, service and validity of notice that need to be observed thoroughly. But, even after our request to follow the guidelines as laid down in CIT Vs. Chetan Gupta (supra), issue/ service of notice u/s 143(2) is not executed. 3.6. In absence of valid issue of notice u/s 143(2) of the Act, assessment so framed becomes invalid and void-ab-inito and against the provisions of the law and was not sustainable in the eyes of law. 1. The Hon'ble Supreme Court in the case of ACIT Vs. Hotel Blue Moon, 321 ITR 362 (paper book page no. 159-165) held that the requirement to issue notice under Section 143(2) was mandatory. It was not "a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with." 2. The Hon'ble Delhi High Court (Division Bench) in PR. Commissioner of Income Tax vs. Silver Line: (2016) 383 ITR 455 (paper book page no. 166-174) has observ....
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....(SC) reiterated in CIT v. Madhya Bharat Energy Corporation [2011] 337 ITR 389 (Del) and Principal Commissioner of Income tax v. Jai Shiv Shankar Traders (P.) Ltd. [201 6]383 ITR 448 (Del). In the last mentioned judgment, this Court held that the delay in issuing a notice under Section 143(2) of the Act would be fatal to the re-assessment proceedings. 15. For the aforementioned reasons, it is held that as far as the second ground is concerned, the Petitioner should succeed. In that view of the matter, the Court does not consider it necessary to examine the first ground of challenge. The impugned notice dated 22 February, 2013 issued to the Petitioner under Section 148 of the Act as well as the consequential order dated 20th January, 2014 disposing of its objections as well as the reassessment proceedings pursuant thereto are hereby quashed." 6. The Hon'ble Delhi High court in the case of CIT vs. Shri Jai Shiv Shankar Pvt. Ltd. [2016]383 ITR 448 (Del) (paper book page no. 179- 187) has also considered the judgment of Delhi High court in the case of Mandhya Bharat Energy Corporation (supra) and has also considered the decision in the case of CIT vs. Vision Inc. (supr....
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....ologies Pvt. Ltd. Vs. ITO Wd-18(l), New Delhi in ITANo.5293 & 5294/Del/201O dated. 11.2.2011 19. ITO Vs. M/s. Staunch Marketing Pvt. Ltd. in ITA No.l643/Del/2008 dated 12.5.2015 20. ITO vs. Gravity Systems Pvt. Ltd (ITAT Delhi), order dated 30.03.2017 21. Sanjeev Aggarwal Vs. DCIT, order dated 25.05.2016 (Chandigarh ITAT) 22. Raj Files & Stationers P. Ltd. v. ITO in ITA.No. 7553/Mum/2016 dated 05.07.2017 23. M/s. Tiny Girl Clothing Company Private Limited in ITA.No. 3599/Mum/2016 dated 20.12.2017 24. Mehta Emporium JewellersVs ITO (ITAT Mumbai) ITA No.3769/MUM/2016 dated 15/06/2018 25. Pankaj Dutta Vs ITO (ITAT Kolkata), I.T.A. No. 2206/Kol/2016, dated 17/11/2017 26. Shri G.N. Mohan Raju v. ITO passed in ITA No. 242 & 243(Bang) 2013, dated 10-10-2014 3.8 In the case of Commissioner Of Income Tax Vs. Laxmam Das Khandelwal, (paper book page no. 188-192) the Supreme Court in its decision dated 13 August, 2019 has observed at para 9 of its order that "According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even ....
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.... during assessment proceeding." Ground -5 "That the learned CIT(A) has erred both on facts and law by upholding the impugned addition u/s 69A of the Act, failing to appreciate that verification letter under provisions of section 133(6) of the Act were sent after a long period of time and held assessee responsible for return of letter as well as non-response." 4.1 Assessee was carrying on retail trading of unstitched cloths in local market popularly known as Saptahik Bazar i.e. weekly market that is still being organised in various parts of Delhi. Usually, sales were made in cash in that market. We have furnished copy of invoice (paper book page no. 66-77), monthly sales and purchases (paper book page no. 78 & 79), name of employees who were employed at that time but the Ld. Assessing Officer was erred in rejecting business activity arbitrarily and labeled a charge that it is cover up exercise i.e. after thought to justify cash deposit. Assessee was unaware of the reasons as to why details are being asked from the department. Copy of notice u/s 148 as well as reasons recorded was received on 04/01/2016 whereas return of income of income was filed on 07/12/....
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....to verify the genuineness of the business has not been exercised by the Ld. AO, therefore, non-service of letter u/s 133(6) should not be the sole criteria to conclude that the business activity is not genuine and thus deposit in the bank account remained unexplained. Further, Ld. AO has not given due attention to the bank statement of the assessee which itself reflect that a huge amount of Rs. 14,80,750/- has also withdrawn from the bank account during the year 2007-08 and this basic facts has not been considered by the Ld. AO. 4.4 In her assessment order, The Ld. AO has travelled an extra mile, by giving the details of investment of Rs. 100169/- as on 12/10/2007, Rs, 700000/- on 29/11/2007, Rs. 929250/- on 23/01/2008, Rs, 200000/- on 28/01/2008 (in fact, it is cash withdrawn, presumed by AO as investment as the cheque no. is mentioned in bank statement) and Rs. 3,38,856/- on 12/02/2008, to justify that the assessee has invested a large sum of money and failed to appreciate that the assessee has withdrawn Rs. 14,80,750/- from his bank account during FY 2007-08. Assessee has also furnished a statement (paper book page no. 81-82) showing date wise cash withdrawn from bank a....
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....ttention to other bank statements, available with him on record as on date of assessment order, and the date-wise cash deposit and withdrawn summary (paper book page no. 8182) furnished by the assessee during assessment. The cash summary contains details such as date of transaction, activity i.e. either cash withdrawal or deposit, instruments no., if any, amount deposited, amount withdrawn, balance after considering opening balance increased by cash withdrawn and reduced by cash deposited into the bank account and last column indicate the name of bank with which transaction was made. The said summary is self- explanatory, however, for sake of convenience, bank name and account number (last four digit of the account no.) has been written in short. 5.4 The Ld. Assessing Officer, in her order at para 3, page no.-2 & 3, depicted a chart showing cash deposit and consequent investment made by assessee. It reveals that, deposit of cash is to the extent of Rs. 15,31,500/- and investment made is to the extent of Rs. 22,68,275/-. Figure of investment as shown in chart and narrated at para 3.2 of the order is misleading to the extent that Rs. 2,00,000/- which was the cash withdrawal ....
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.... 5000/- -54964/- 24/03/2008 6500/- 40036/- Total 15,45,500/- 5.6. From the table given above, it may been seen that while recording cash deposit in her assessment order, the Ld. AO has also recorded cheque deposit as cash deposit on two occasions. We would like to make it abundantly clear that this cash summary of deposit and withdrawal is based on banking transaction only and the business receipt is not considered at all. This summary also reveals that, only Rs. 1,54,964/- (maximum negative balance at any time during the year on 23/01/2008) that falls short of cash deposited into the bank over cash withdrawal. If there is so huge cash withdrawal which is vivid from the bank statement, as to why Ld. AO failed to consider such cash withdrawal? Further, assessee was carrying on business activity and the balance amount of cash which fall short of cash withdrawn, has been met out of business receipts. During the assessment, assessee has well explained to Ld. AO that the payment by cheque was given against construction of residential house which is totally ignored and labelled a charge that assessee has deliberately desisted from giving narration of ....
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....ion has been used by the assessee for any other purpose. In my view addition is made on inferences and presumptions which is bad in law." 3. Hon'ble Delhi High Court in the case of CIT vs KuIwantRai in 291 ITR 36 wherein the Court has held as under "This cash flow statement furnished by the assessee was rejected by the AO which is on the basis of suspicion that the assessee must have spent the amount for some other purposes. The orders of AO as well as CIT(A) are completely silent as to for what purpose the earlier withdrawals would have been spent. 4. Moongipa Investment Ltd. vs. ITO: [2013] 30 taxmann.com 113 (Delhi Trib) Held that where deposits in bank were from cash balance available to assessee in its books of account, no addition could be made under section 68. It was further held that the addition could not be made on the basis that there was time gap between withdrawal and deposits. 5. Anupama Chaudhary Vs. Income Tax Officer: ITA No. 4155(Del)/2009, decision dated 27/12/2010 (paper book page no. 197-203) Relying on the decision of Ld. ITAT in case of ACIT Vs. Baldev Raj Charla & others (2009) 121 TTJ 366, the Ld. Court....
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....se other than deposit in the bank account i.e. cash has been withdrawn from three saving account and majorly deposited in a single bank account, can't be treated as unexplained money u/s 69A of the Act and hence we request your honour to delete the addition made by Ld. AO which is solely based on the presumption that the nature of deposit speaks that these may not be the extent of Rs. 14,85,750/- has also been withdrawn from the bank and Ld. CIT(A) also failed to appreciate this facts and thus, the addition of Rs. 15,31,500/- made by the Ld. AO and later on confirmed by CIT(A) may kindly be deleted. Prayer: - In view of the facts and in circumstances of the case and legal submissions made herewith, it is prayed that this Hon'ble Appellate Tribunal may be pleased to (i) Set aside the impugned assessment order dated 29/03/2016 passed by (ii) Pass such other order/ orders, which this Appellate Tribunal may deem fit and proper." 9. Ld. Counsel for the assessee reiterated the submissions as made in the written submission as raised in respect of the additional grounds. The relevant contents of the written submission are reproduced as under:- ....
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....on to whom it is served. That is, notice is not directly sent to assessee at his last known address by the Ld. AO but deliberately sent on the address which fall under the territory of Delhi. Assessee is a retired employee of Delhi Police and after his retirement from service, he is residing in Gurgaon (Now Gurugram) since mid of 2008. It is being informed that the assessee is already assessed to tax by the same Ld. AO for AY 2008-09 and the assessee is in Second Appeal before this Learned Tribunal vide ITA NO. 799/DEL/2020. Here is brief facts about the notice issue date and address of the assessee in tabular form (for both assessment year): Particulars Assessment Year 2008-09 Assessment Year 2008-09 Address on the reasons recorded for reopening of the case u/s 147 8-23. Masoodpur, New Delhi H.No.- 415, Sector-22, Gurgaon- 122016 Notice issued at the address 8-23, Masoodpur, New Delhi 8-23, Masoodpur, New Delhi Subsequent notice u/s 142( 1) issued by the Ld. AO H.No.- 415, Sector-22, Gurgaon- 122016 H.No.- 415, Sector-22 Gurgaon- 122016 (not all but majority of them) Address mentioned by Ld. AO on assessment order H.....
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....t she did not have jurisdiction over a person who is pensioner and living in Gurgaon (Now Gurugram), she issued notice u/s 148 of the Act which is contrary to the provisions of the law. 1.4 According to Section 124(1) "Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction. (a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situated within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situated within the area, and (b) in respect of any other person residing within the area." 1.5 Section 120 of the Income Tax Act, 1961 is mentioned hereunder: Section 120 (1):- Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as th....
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....me from sources other than income from business or profession and residing within the territorial area mentioned in column (4); (b) Persons other than companies deriving income from business or profession and whose principal place of business or profession is within the territorial area mentioned; in column (4) i.e., Municipal Wards of MCD of Delhi or other areas as mentioned. 11 Cases or classes of cases has been defined as (a) All cases of persons referred to in corresponding entries in item (a) and (b) above other than: (i) Persons whose principal source of income is from salary. (ii) Persons falling under jurisdiction of Principal Commissioner I Commissioner of Income Tax, Delhi-21 III Jurisdiction over residual cases in respect of the entire NCT of Delhi including corporate and non- corporate cases lies with Pr. CITI CIT -3, New Delhi S. No. Charge Rangel Assessment Unit Jurisdiction (Alphabetical) 11 Pr. Commissioner/ Commissioner of Income Tax, Delhi-II Range 33/ Ward 33(3) Falling under ward name of Vasant Kunj under MCD and number is 171. 22 Pr. Commissioner/ Commissioner of Income Tax, Delhi-2....
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....ssessing Officer though who has no jurisdiction as per the CBDT's notification, such mistake cannot confer the jurisdiction on such an Assessing Officer. Jurisdiction can be conferred only by notification u/s 120(1) and 120(2) of the Act only." 1.9. Hence, the impugned notice u/s 148 under the Act which was issued by Ld. Assessing Officer Ward 65(5), New Delhi was without jurisdiction and hence it is an invalid notice in the eye of law and thus, assessment order passed by Ld. Assessing Officer, Ward 65(5), New Delhi pursuant to such notice is void-ab-initio. 1.10.1. In CIT Vs. M/s MT Builders Pvt. Ltd., (2012) 349 ITR 271 (All.) It was held by the Hon'ble Allahabad High Court that "the notice issued by an Officer who had no valid jurisdiction for the assessee is invalid." 1.10.2. In Smt. Smriti Kedia Vs. Union of India and Others, [2011] 339 ITR 37 (Cal.) and in Indorama Software Solution Ltd. Vs. Income Tax Officer, [2013] 29 taxmann.com 78 (Mumbai), In both cases, the hon'ble courts have held that "When it is apparent that the notice u/s 148 was issued by the AO who was not vested with the jurisdiction over the assessee the....
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....ings taken by the ITO would be illegal and void. In support of this proposition we also rely upon the cases of Hon'ble Apex Court and other Hon'ble Courts in the cases of: a) Y. Narayana Chetty Vs. ITO, 35 ITR 388, 392 (SC); b) CIT Vs. Maharaja Pratap Singh Bahadur, 41 ITR 421 (SC); c) CIT Vs. Robert, 48 ITR 177 (SC). d) CIT v. Thayaballi Mulla Jeevaji Kapasi (1967) 66 ITR 147 (SC) e) CIT v. Kurban Hussain Ibrahimji Mithiborwala (1971) 82 ITR 821 (SC) f) DR. (MRS.) K.B. Kumar vs. Income Tax Officer (2010) 131 TTJ (Del) 511 2. Additional Ground -2 [Related to issue of notice u/s 143(2) of the Income Tax Act on the date of filing of Return) "That on the facts and circumstances of the case, the Ld.AO has erred in law while issuing notice u/s 143(2) of the Act, (on 08/11/2016, that is the day of filing of ITR in response to notice u/s 148 and notice u/s 143(2) handed over to AR of the assessee), which is issued in gross violation of the scheme of section 143(2) and thus the assessment order passed by the Ld. AO liable to be quashed in view of the decision of Hon'ble Jurisdictional High Court (D....
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....without application of mind and without examination of the return on the part of Ld. AO and in gross violation of the scheme of the section 143(2) which vitiate the entire proceeding and hence, the order passed by the Ld. AO is liable to be quashed. 2.4 The Hon'ble Delhi High Court in the case of Director of Income Tax vs. Society for Worldwide Interbank Financial Telecommunications (2010) 323 ITR 249 (Del.) (page no. 55-57) has held as under: "Both the CIT(A) and the Tribunal have returned a concurrent and clear finding of fact that the notice under s. 143(2) was issued on 23rd March, 2000 and since the return was filed on 27th March, 2000, the notice was not a valid one and, therefore, the assessment completed on the basis of the notice was also invalid and was consequently set aside. It is for the first time that the counsel for the appellant contends that the notice, in fact, was issued on 27th March, 2000 and not on 23rd March, 2000, the date which is recorded on the notice itself. No such contention was raised before the lower appellate authorities. Consequently, the said contention cannot be raised before the Court for the first time. The appellant has ....
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....he paper book. He has, therefore, submitted that the A.a. has not validly assumed jurisdiction under section 147 and 143(3) of the LT. Act to pass the assessment order against the assessee. He has submitted that the issue is covered in favour of the assessee by the judgment of the Hon'ble Delhi High Court in the case of Director of Income Tax vs. Society for Worldwide Interbank Financial Telecommunications (2010) 323 ITR 249 (Del.) in which it was held as under: "Both the CIT(A) and the Tribunal have returned a concurrent and clear finding of fact that the notice under s. 143(2) was issued on 23rd March, 2000 and since the return was filed on 27th March, 2000, the notice was not a valid one and, therefore, the assessment completed on the basis of the notice was also invalid and was consequently set aside. It is for the first time that the counsel for the appellant contends that the notice, in fact, was issued on 27th March, 2000 and not on 23rd March, 2000, the date which is recorded on the notice itself. No such contention was raised before the lower appellate authorities. Consequently, the said contention cannot be raised before the Court for the first time. The appellant has....
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....n'ble Tribunal held that: "7.6 Further we also find force in argument of Ld. counsel for the assessee that language of section 143(2) of the Act in so far as it uses the phrase "if considers it necessary or expedient" presupposes application of mind on part of Ld. AO before notice u/s 143(2) of the Act is issued which words have been explained by Hon'ble Apex court in case of Bhikubhai Patel vs. State of Gujarat (4 SCC 144) relevant extract of which is reproduced above where it is observed by Hon'ble Apex court that " ... The expression: so considered necessary is again of crucial importance. The term consider means to think over, it connotes that there should be active application of the mind. In other words the term consider postulates consideration of all the relevant aspects of the matter. A plain reading of the relevant provision suggests that the State Government may publish the modifications only after consideration that such modifications have become necessary. The word necessary means indispensable, requisite, indispensably requisite, useful, incidental or conducive, essential, unavoidable, impossible to be otherwise, not to be avoided, inevitable. The....
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....f Assessing Authority is after thought and just to gain under advantage. He contended that the assessee has no case. Therefore, he is raising such technical issue. 12. I have heard Ld. Authorized Representatives of the parties and perused the material available on record. The assessee has raised question of jurisdiction of proceedings which goes to the root of any proceedings. It is well settled that initiation of proceedings by an Authority which has no jurisdiction would vitiate the order passed in consequence to such proceedings. The assessee has relied on various case laws on the validity of the proceedings. The reliance was placed by the Ld. Counsel for the assessee on the decision of the Tribunal rendered in the case of Mukesh Kumar vs ITO in ITA No.2358/Del/2012 order dated 12.06.2015. It is contended that the decision of the Tribunal squarely applies on the facts of the present case. Ld. Counsel for the assessee submitted that in the light of the binding precedents where it has been categorically held that the notice issued u/s 148 of the Act by the Assessing Authority who was not vested with the requisite jurisdiction and in that event, issuance of such notice is ab-ini....
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.... the AO was based on invalid notice hence, it also vitiated the assessment order in the light of binding precedents as cited by the assessee. The assessment order is hereby, quashed. 15. Other grounds are related to addition on merits. Before the Lower Authorities, it was stated by the assessee that there were cash withdrawals and deposits. Before Ld.CIT(A), it was stated that the cash was withdrawn and deposited in the bank account. Ld. Counsel for the assessee has pointed out that a sum of Rs.14,85,750/- was available out of withdrawals on the bank account for making the deposits. I find that Ld.CIT(A) has not given any findings. Therefore, looking to the totality of the facts or findings of the Lower Authorities are based on conjectures and surmises and ignored the facts placed on record. Therefore, in my considered view, the AO was not justified in making the addition. The grounds raised by the assessee are allowed on merit. 16. In the result, the appeal filed by the assessee is allowed. ITA No.800/Del/2020 [Assessment Year : 2009-10] 17. Now, I take up ITA No. 800/Del/2020 filed by the assessee pertaining to Assessment Year : 2009-10. The assessee has raised follow....