TaxTMI 
TaxTMI 
2024 (4) TMI 202
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.... received a notice dated 25th March 2023 under Section 148A(b) of the Act alleging that there was information that the income of Petitioner had escaped assessment for AY 2016-2017. The information relies on the statement recorded during the course of search and seizure action conducted under Section 132 of the Act in the case of one Ashwin Kumar Mali. As per the information, Petitioner/Assessee had undertaken a financial transaction in the sum of Rs. 1,30,66,755/- with one Secure Exim Private Limited ("SEPL") and said SEPL was controlled by Ashwin Kumar Mali and said entity was providing accommodation entries of bogus sale/purchase and bogus unsecured loans to various entities in lieu of cash. Assessee allegedly had entered into fictitious loan transactions with SEPL, which provides accommodation entries, which suggest income chargeable to tax has escaped assessment in the case of Assessee. The relevant portion of information reads as under : "1. Whereas in your case for the A.Y. 2016-2017 relevant to FY 2015-2016, information is available in accordance with the risk management strategy formulated by the Board. Information was received in category of information on Insight Portal....
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....l evidence and documents and has not been able substantiate his claim as an NRI. We also fail to understand what evidence Assessee has to show when Assessee makes the statement that in the income tax returns filed by him, his residential status appears as "Non-resident". So also, in the income tax portal, his residential status shown as "Non-resident". In fact the intimation under Section 143(1) of the Act issued to Assessee for AYs 2019-2020, 2021-2022, 2022-2023 and 2023-2024, all show the residential status of Petitioner as "Non-resident". Therefore, we would not hesitate to observe that the stand taken by the AO is a dishonest stand. 7. Respondent No. 1 thereafter passed the impugned order dated 12th April 2023 under Section 148A(d) of the Act in which, according to us, the AO has accepted that he had no jurisdiction, but because there was no time to mitigate the PAN at the stage it was, he went ahead and has issued the reassessment notice. Paragraph No. 5.2 of the impugned order reads as under : "5.2 Further, the assessee stated that since he is an NRI, the jurisdiction of his case lies with International Taxation, Ward 3(2)(1), Mumbai and the undersigned has no jurisdictio....
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....who did not have jurisdiction over Petitioner. 10. Since in the affidavit-in-reply a stand is taken that the file can be transferred now to the AO who had jurisdiction over Petitioner, Dr. Shivram submitted, relying on Commissioner of Income Tax v. M.I. Builders (P.) Limited [2014] 44 taxmann.com 360 (Allahabad)., that the notice issued by Non-jurisdictional Assessing Officer is invalid, no records can be transferred when the proceedings were invalid ab-initio and such transfer cannot validate any proceedings taken in continuation thereof. 11. Ms. Nagaraj appearing for Respondents-Revenue relying on a judgment of Hon'ble Delhi High Court in Abhishek Jain v. Income Tax Officer and Another 2018 SCC OnLine Del 9435., submitted that the objections as to the jurisdiction of AO cannot be equated with lack of subject matter jurisdiction and therefore, the fact that Respondent No. 1 has issued a notice under Section 148A(b) of the Act, cannot be fatal. In our view, this judgment does not help in the case of Respondents-Revenue because that was a case where the AO had concurrent jurisdiction. That was not a case where per-se there was lack of jurisdiction. 12. This Court in Pavan Morarka....
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....l also be useful to reproduce paragraph no. 17 of M.I. Builders (supra) and it reads as under : "17. Having heard learned Counsel for the parties and perusing the records, we are of the view that on 29.03.2004, when the notice under Section 148(1) of the Act was issued, ACIT, Range-IV, Lucknow have no jurisdiction over the Assessee on the date of issuance of such notice as the jurisdiction over the Assessee was transferred to the Additional CIT, Range-I, Lucknow vide order dated 01.08.2001 passed under Section 120 of the Act by the CCIT, Lucknow. Therefore, it cannot be situation where two Assessing Officers would have simultaneous jurisdiction over the assessee, one being Additional CIT, Range-I, Lucknow and other being ACIT, Range-IV, Lucknow. In these backgrounds, the Tribunal has rightly held that the issuance of notice under Section 148(1) of the Act by the ACIT, Range-IV, Lucknow was without jurisdiction." 14. In the circumstances, the fact that Petitioner has been filing returns as a Non-resident, cannot be disputed. The fact that the Income Tax Officer (International Taxation) would be the AO who had jurisdiction over Petitioner, cannot be disputed. 15. The further poi....