TaxTMI 
TaxTMI 
2025 (2) TMI 936
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....ment proceedings/order as the same has been framed in violation of the principles of natural justice without granting to the assessee a fair, proper and reasonable opportunity including without issuing specific SCN to the assessee. 3. Under the facts and circumstances of the case, ld. CIT (A) grossly erred in confirming the action of ld.AO in making addition of Rs. 8,94,545/- on account of professional or technical services without appreciating the facts available on records and without considering them in their true perspective and sense therefore complete addition should be deleted. 4. Under the facts and circumstances of the case, ld. CIT (A) grossly erred in confirming the action of ld. AO in confirming the action of ld. AO for charging Interest u/s 234A, 234B & 234C of the Act. 5. The appellant reserved his right to add, amend or alter the grounds of appeal on or before the date of appeal hearing. 2. The appeal filed by the assessee is delayed by 21 days. The ld. A/R has filed condonation application dated 20.11.2024 stating that "That reason for late filing was that the order would have been served on the assessee's e-mail address on time, but th....
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....ome on 23.04.2017 declaring total income of Rs. 9,80,460/- and mentioned his address located at C-70, Shakti Nagar Ext., Delhi. Notice under section 142(1) along with query was issued to the assessee on 12.07.2017 requiring the assessee to furnish certain details/documents which remained unattended by the assessee. Again notice under section 142(1) and notice under section 143(2) of the IT Act, 1961 was issued on 11.08.2017 which also remained unattended by the assessee. Further, a show cause letter was issued on 11.08.2017 but the same was also not responded. Finally, the AO holding that since the assessee did not comply with any of the notices issued during the assessment proceedings, completed the assessment ex parte vide order dated 22.11.2017 at an assessed income of Rs. 21,65,000/- after making addition of Rs. 11,84,540/- which included unexplained income of Rs. 8,94,545/- and unexplained expenditure of Rs. 2,89,995/-. 5. Being aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT (A). The ld. CIT (A) partly allowed the appeal of the assessee by deleting the addition of Rs. 2,89,995/- on account of credit card payment as unexplained expenditure....
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....ing out his professional activities from Delhi at above mentioned address and residing on same place at Delhi, it can be verified with the Copies of Acknowledgment of ITR as Annexed for the period from AY 2010-11 to 2019-20. In addition to these evidences Copy of Bank Statement for the period from 01.04.2009 to 31.03.2010 is also being annexed and marked as Annexure 47-54 for your kind perusal where it is specifically mentioned that assessee appellant has been residing at C-70, SHAKTI NAGAR EXTENTION, DELHI-110052 and was carrying out his business operation from that place, at that time also. Therefore in view of above context it is stated that in impugned case the assessment was being done by the Income Tax Authority ACIT Circle-1, Jaipur while by virtue of Section 124 of the Income Tax Act, 1961 it comes under the territorial jurisdiction of ITO Ward-70(3), Delhi. It is also established that before initiating this assessment proceedings the Income Tax Department neither exercised the powers as conferred under section 120 (Territorial Jurisdiction of Income Tax Authorities) nor under section 127 of the Income Tax Act, 1961 (Power to transfer cases), henceforth complete re....
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....jurisdiction to assess any person, the question shall be determined by the Principal Director-General or the Principal Chief Commissioner or the Principal Commissioner; or where the question is one relating to areas within the jurisdiction of different Principal Directors- General or Principal Chief Commissioners or Principal Commissioners, by the Principal Directors-General or Principal Chief Commissioners or Principal Commissioners concerned or, if they are not in agreement, by the Board or by such Principal Director-General or Principal Chief Commissioner or Principal Commissioner as the Board may, by notification in the Official Gazette, specify. (3) ................. (4)................... (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120. 127.....
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....residence/place of profession. The address was changed in the records prior to passing of the assessment order and subsequent thereto, the PAN has been migrated on 26.02.2021. The record also discloses that notices were served to the appellant on her Bangalore address. Thus, for all practical purposes, it is not in dispute that at the time when the impugned action was taken and the assessment order was passed, the appellant was residing and was carrying on her profession at Bangalore. The question is whether the AO at Mumbai could have assumed jurisdiction in the matter? 12. The jurisdiction of various income tax authorities has to be reckoned on the basis of statutory provisions, which confer such jurisdiction; both territorial, pecuniary or otherwise. Sub-section (1) of Section 120 of the Act provides that income tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred or assigned to them under the Act, in accordance with such directions as the Central Board of Direct Taxes ('Board' for short) may issue from time to time. Section 124 of the Act thereafter becomes relevant for the purpose which pertains to the jurisdiction ....
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....e Madras High Court in Abdul Azeez Haroonvs DCIT (IT) [2020] 115 taxmann.com 289 (Madras) and the decision of Pune Bench of this Tribunal in Capstone Securities Analysis Pvt. Ltd. vs. Dy. Commissioner of Income Tax, Circle1(1), Pune [2017] 85 taxmann.com 270 (Pune - Trib.) (supra) which has been confirmed by the Hon'ble Bombay High Court in Principal Commissioner of Income Tax vs Capstone Securities Analysis Pvt. Ltd. [2023] 457 ITR 775 (Bombay) (supra). 16. In the case of Abdul Azeez Haroon (supra), the assessee was a non-resident Indian. After the assessment was completed in respect of the relevant year, Commissioner (International Taxation) issued a reopening notice against the assessee at his address at Madurai (Tamil Nadu). The assessee contended that he was residing at Madurai prior to period relating to assessment year 2011- 12 and admittedly no return of income was filed by him during his stay at Madurai as he had no taxable income during that period. From assessment year 2010-11 assessee had shifted to Shimoga (Karnataka) where he was carrying on business and thus, the return of income from assessment year 2012-13 onwards were filed at Shimoga. The Hon'ble Madras ....
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....templated only the transfer of an assessment case for particular year actually pending before an Income-tax Officer; (b) that the petitioner was, therefore, entitled to the benefit of the provisions of section 64(1) and (2) and had the right along with other bidi merchants to have its assessment proceedings before the Income Tax Officer of the area in which its place of business was situate; (c) that the order was calculated to inflict considerable inconvenience and harassment to the petitioner; the books of accounts would have to be produced hundreds of miles away from Calcutta, the partners or principal officer would have to be away fro the head office to comply with the order, and extra expenditure would have to be incurred by way of railway fare, etc.; that "the state" which included the income tax department had by an illegal order denied to the petitioner, as compared with other bidi merchants who were similarly situate, equality before the law and the assessee had the right to complain of an infraction of its fundamental rights under article 14 of the Constitution; (d) that therefore the order was liable to be set aside and an injunction would be i....
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....ngs had started by the Ld. AO on borrowed satisfaction but not their own which is mandatory condition of the law as provided for re -opening of any assessment, section 147 of Act clearly specify. In the instant case the Ld. AO had claimed that assessee received income from professional services and paid some credit card expenses on the basis of AIR but could not conduct any enquiry regarding both the facts and without conducting any enquiry/investigation re-opened the case and issued the notices which is completely based on presumptions/assumptions and deserve to be declared as null and void ab initio. Here in impugned case AO's self-satisfaction regarding escapement of income is not bringing on record which is mandatory condition of law under section 147 of Income Tax Act, 1961, it could have been come only after conducting enquiry and investigation but Ld. AO did not make such therefore complete re-assessment proceedings come under suspicious circle, various honorable courts propounded and led on this aspect and issue direction to handle such situation. In this case the Ld. AO did not make necessary efforts for discharging his liability and merely on th....
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....le-I, Jaipur for reopening and the approval thereof by the Ld. Pr. Commissioner of Income tax-I, it is noted that AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has been escaped by the assessee during the year under consideration. Interestingly, reason are vague and are not based on any tangible material as well as are not acceptable in the eye of law. The AO has mechanically issued notice u/s 148 of the Act, on the basis of information as received from Annual information return (AIR). Further, the Ld. PCIT has written "yes" and put his signature for approved the notice which established that he has not recorded proper satisfaction/approval, before issue of notice u/s 148. By observing all the facts it is noted that for initiating the assessment proceedings there are some inbuilt safeguards to prevent the arbitrary exercise of power by an Assessing officer on the assessee. If the Ld. PCIT has given his approval after verifying the facts as submitted by the Ld. AO, perhaps he would not have granted his approval, which was mandatory condition to initiate the reassessment proceedings. In the instant ca....
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....thority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression 'approved' or 'Yes' says nothing. It is not as if the CIT has to record elaborate reasons for agreeing with the noting put up before him. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed. It is also noted that the ld. AR of the assessee has advanced his paper book at Pages 3 to 5 as to reasons recorded for no satisfaction by the ld. Pr. CIT, the satisfaction if any was of the AO, who is not competent in the present case. In the case of N.C. Cables (supra) following case laws were relied therein. i. Maruti Clean Coal And Power Ltd. vs. ACIT (2018) 400 ITR 0397 (Chhattisgarh) ii. CIT vs. S. Goyanka Lime & Chemicals Ltd. (2015) 231 TAXMAN 0073 (MP) iii. PAC AIR SYSTEMS P. LTD. vs. ITO (2....
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....he AO. In this regard, we draw strength from the decision in the case of Pr. CIT vs. N. C. Cables Ltd.(2017) 98 CCH 0010 Del HC wherein it has been held that Section 151 of the Act clearly stipulates that the CIT, who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression 'approved' says nothing. It is not as if the CIT has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed." We also draw strength from the decision in the case of CIT vs. S. Goyanka Lime & Chemicals Ltd. (2015) 231 TAXMAN 0073 (MP) wherein it has been held that While according sanction, the Joint Commissioner, Income Tax has only recorded so "Yes, I am satisfied" If the case in hand is analysed on the basis of....
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.... we are of the view that the issuance notice 148 of the Act and all the consequent proceedings and assessment order passed was not in accordance with law. The case laws relied upon by the ld. DR are not tenable in the facts and circumstances of present case, therefore, considering the totality of facts and circumstances of the case as well as the judicial pronouncements qua the issue under consideration, we find merit in the contention of the ld AR, therefore, we quash the proceedings U/s 147 of the Act. Once, we quash the proceeding U/s 147 of the Act, therefore, there is no need to adjudicate the other grounds raised in this appeal." Hence, in view of the above facts, circumstances of the case and case laws cited hereinabove, the Bench feels that there is jurisdictional error and the order passed by AO does not survive. Thus the appeal of the assessee is allowed. 3.1 As regards the penalty appeal of the assessee, it is not required to deal with for the reason that when the quantum appeal has been allowed then consequently penalty order of the ld. CIT(A) is infructuous 4.0 In the result, both appeals of the assessee are allowed Order pronounced ....
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....pra), the same question has been considered by a Coordinate Bench of this Court and the following principles are laid down:- "The Commissioner acted, of course, mechanically in order to discharge his statutory obligation properly in the matter of recording sanction as he merely wrote on the format "Yes, I am satisfied" which indicates as if he was to sign only on the dotted line. Even otherwise also, the exercise is shown to have been performed in less than 24 hours of time which also goes to indicate that the Commissioner did not apply his mind at all while granting sanction. The satisfaction has to be with objectivity on objective material." 8- If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 148, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration. 9- As far as explanation to Section 151, brought into force by Finance Act, 2008 is concerned, the same only pertai....
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....he evidence collected by the department is not worthy of credence as there is no independent evidence on the record, therefore, we are of the view that addition with the help of this much information cannot be made. Therefore, addition made is not sustainable in law. (iv) It is necessary in the interest of justice that all relevant evidence must be submitted, the party must be informed on the evidence on which reliance is placed and to allow witnesses to be questioned and to allow evidence and cross-examination on the same. (v) Any statement which is recorded by the Department, an assessee is entitled to get the copy of the statement/information so collected, using evidence behind the back of the assessee is against the principles of natural justice. Also where copies of reports or documents or statement of third party is relied upon for making an addition, it is the duty of the Department to allow the assessee not only to examine such documents but also to cross-examine the party. (vi) In support of our contention, we relied upon the decision of Hon'ble Supreme Court in case of Andaman timber industries V/s Commissioner of Central Excise (SC) 281 CTR....