AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2025 (5) TMI 895
X X X X Extracts X X X X
X X X X Extracts X X X X
.... issued under section 148 of the Income Tax Act,1961 [for short 'the Act'] for the Assessment Year 2017-18. 5. Factual matrix of the matter can be summarized as under: 5.1 The petitioner-company filed return of income for the Assessment Year 2017-18 on 31.10.2017 declaring total income of Rs. 58,50,620/-. 5.2 The petitioner-company was earlier known as "Infimium Resources Investment Private Limited" and its name was changed to "M/s. O3 Developers Private Limited" from 18.03.2019. The petitioner informed the change in name to the respondent and thereafter, a new PAN Card in name of the petitioner was issued on 30.04.2019. 5.3 The respondent thereafter, issued notice dated 31.03.2021 under section 148 of the Act seeking to reopen assessment for A.Y. 2017-18. 5.4 The petitioner therefore, filed return of income for the year under consideration in response to the notice under section 148 alongwith a request to provide reasons for reopening. 5.5 The respondent provided copy of reasons for reopening along with notice dated 28.10.2021 issued under section 143 (2) of the Act which reads as under: "The assessee's case has selected/pushed through Insight Portal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s raised by the petitioner holding that the action of reopening is justified. Being aggrieved, the petitioner has preferred this petition. 6. Learned Senior Advocate Mr. Tushar Hemani appearing for the petitioner submitted that the impugned notice for reopening is without jurisdiction as the respondent ITO, Ward-2 (1) (1), Ahmedabad does not have jurisdiction over the petitioner. Hence, the impugned notice issued by the Income Tax Officer, who has no jurisdiction as the name of the petitioner which was changed from Infinium Natural Resources Investments Private Limited to M/s. O3 Developers Private Limited, would not now fall within the jurisdiction of the respondent, who has issued the impugned notice. 6.1 It was further submitted that as per the new PAN number, which was issued in the name of the petitioner on 30.04.2019, the jurisdiction of the petitioner will fall within Circle 3 (1) (1), Ahmedabad and not with the respondent. It was submitted that as per the details as to the jurisdiction issued by the Principal Commissioner of Income Tax, Gujarat, all the persons being companies registered under the Companies Act, 2013 or the Companies Act, 1956 and having its registere....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the petitioner. It was therefore, submitted that the respondent has not put any effort so as to even look into the nature of transaction concerned in the name of the person from whom such funds have been received and in absence of such details, the respondent could not have formed reason to believe that income chargeable to tax in the hands of the petitioner has escaped the assessment. 6.5 It was further submitted that the allegation regarding accommodation entry is as per the information received from the credible sources to the effect that the petitioner is one of the beneficiary of entries provided from Kushal Ltd, Ahmedabad i.e. the entity wherein a search action was carried out. However, the respondent-Assessing Officer has not taken into consideration the objection raised by the petitioner that the petitioner has not taken any such entry from Kushal Limited, Ahmedabad, and the petitioner has accounted for all the credit entries in the bank account and the return of income has been filed after considering the credit entries in the bank account and mere receipt of entry in bank account would not constitute any income. Hence, it was submitted that the impugned notice is witho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7.2 It was submitted that the respondent-Assessing Officer was within his jurisdiction to issue the impugned notice. It was submitted that the petitioner filed the return of income with the respondent-Assessing Officer for the A.Y. 2017-2018 and subsequently, the name of the petitioner-company was changed to M/s. O3 Developers Private Limited and as per the allocation of the jurisdiction, the name of the petitioner-Company would fall within the jurisdiction in Circle 3(1)(1), Ahmedabad. 7.3 In support of his submissions, reliance was placed on the decision of Abhishek Jain vs. Income Tax Officer, Ward 55(1), New Delhi reported in [2018] 94 taxmann.com 355 (Delhi) to submit that the Income Tax Officer would not per se lack jurisdiction for issuance of reopening against the assessee in view of the provision of section 124 read with section 120 of the Act. 7.4 It was submitted that as per the provision of section 120 (1) of the Act, the Income Tax Authority have to exercise all or any of the powers and perform all or any of the functions conferred on it. It was submitted that the respondent therefore, is within its jurisdiction to issue impugned notice. It was submitted that as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the petitioner has not raised the issue of jurisdiction as per the provision of the Act and therefore, the impugned notice cannot be questioned on the ground of jurisdiction of the petitioner. 7.7 Learned Senior Standing Counsel Mr. Varun Patel referred to and relied upon the additional affidavit filed on behalf of the respondent to contend that the petitioner was required to intimate the Assessing Officer regarding the change in name of the Company and PAN, however, the same has not been done as per the say. 7.8 Learned advocate Mr. Patel has referred to the following averments made in the additional affidavit-in-reply: "3. It is further submitted that as per the notification / instructions issued by the CBDT Vide F. No. 187/4/2020-ITA-I dated 08.12.2020, the jurisdictional assessing officer has jurisdiction to issue notice u/s. 143 (2) of the Income Tax Act in cases where notice u/s. 148 of the Act was issued before such case is assigned to ReAC/NeAC (i.e. Regional/ National e-assessment centre). Annexed hereto and marked as Annexure-R 2 is a copy of notification/instructions issued by the CBDT Vide F. No. 187/4/2020-ITA-I dated 08.12.2020. The case of the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce was placed on the following averments made in the affidavit-in-reply filed on behalf of the respondent: "The main ingredient required to issue notice u/s 148 of the I.T. Act, 1961 is to form 'reason to believe'. At the stage of issue of notice u/s 148, the only question is whether there was relevant material on which reasonable person could have form the requisite belief as to whether an income chargeable to tax has escaped assessment. The expression 'reason to believe' cannot be read to mean that the AO should have finally ascertained the fact by legal evidence or conclusion. Whether material would conclusively prove escapement of income is not the concern at the stage of issue of notice. It only means that the AO forms a belief from the examination of facts, from any information the AO receives. If the AO discovers or finds or satisfies that the taxable income has escaped assessment, it would amount to saying that the AO had reason to believe' that such income has escaped assessment. The justification of AO's belief is not to be judged from the standards of proof required for coming to a final decision. A belief though justified for the purpose of initiation of the pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. 6. In view of the above, notice issued under section 148 is legal and valid and therefore, the petition is devoid of merits and same may kindly be rejected." 7.11 In support of his submissions, reliance was placed on the following decisions: * Jayant Security & Finance Ltd vs. Assistant Commissioner of Income Tax, Officer Circle 1(1) reported in [2018] 91 taxmann.com 181 (Gujarat); * Yogendrakumar Gupta vs. Income Tax Officer reported in [2014] 46 taxmann.com 56 (Gujarat). 8. Having heard learned advocates for the respective parties and considering the material placed on record, it appears that the respondent-Assessing Officer has issued the impugned notice based upon the information made available on the insight portal regarding the alleged accommodation entries received by the petitioner in the bank account from Kushal Ltd, who was alleged to be an accommodation entry provider. 9. With regard to the contention raised on behalf of the petitioner that the respondent-Assessing Officer could not have jurisdiction to assume the jurisdiction in view of change of jurisdiction on account of change of name of the petitioner-Company, it would be germa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any of the other income-tax authorities who are subordinate to it. (3) In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely :- (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases. (4) Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,- (a) authorise any [Principal Director General or Director General] or [Principal Director or Director] to perform such functions of any other income-tax authority as may be assigned to him by the Board; (b) empower the [Principal Director General or Director General] or [Principal Chief Commissioner or Chief Commissioner] or [Principal Commissioner or Commissioner] to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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 situate 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 situate within the area, and (b) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the [Principal Director General or Director General] or the [Principal Chief Commissioner or Chief Commissioner] or the [Principal Commissioner or Commissioner]; or where the question is one relating to areas within the jurisdiction of different [Principal Director General or Director General] or [Principal Chief Commissioner or Chief Commissioner] or [Principal Commissioner or Commissioner], by the [Principal Director General or Director Gene....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion (1) or sub-section (2) of section 120." 10. On perusal of the above provisions, it is clear that the petitioner-Company, after change of the name, is situated within the same territorial jurisdiction and therefore, the Assessing Officer, before whom the petitioner-Company had filed return of income for A.Y. 2017-18 on 31.10.2018 and as such the respondent- Assessing Officer, Ward 2 (1) (1), Ahmedabad would have equal jurisdiction to issue the notice for reopening and thereafter, he may transfer the case after obtaining permission from the higher authorities to the proper jurisdiction. In view of the facts of the case, it cannot be said that the respondent did not have jurisdiction to issue the notice for reopening upon receipt of the information, more particularly, when the petitioner has not informed the respondent with regard to the change of jurisdiction as averred in the additional affidavit-in-reply filed on behalf of the respondent as extracted here-in-above. In view of the fact that the petitioner never informed about the change in PAN of the petitioner due to change of name to the respondent-Assessing Officer and as such, the impugned notice dated 31.10.2017 was issu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessment year 1986-87 on 30th July, 1986 with ITO, Dimapur but there is no proof or evidence. Notice under Section 148 was issued by ITO, Dimapur on 26th June, 1987. (7) For the assessment year 1987-88, the respondent had filed return with ITO, Dimapur on 27th April, 1988 but defect memo dated 6th July, 1988 was issued. However, no order was passed declaring the return void or bad on account of the fact that TDS, self assessment and advance tax challans and dividend warrants etc. had not been attached. (8) There was exchange of correspondence between Assessing Officer at Delhi and ITO, Dimapur. ITO, Dimapur conceded and accepted that for the assessment years 1985-86, 1986-87 and 1987-88, the Assessing Officer at Delhi had jurisdiction to initiate and complete the assessment proceedings. However, the procedure under Section 124 of the Act was not followed and the Commissioners concerned did not deliberate in writing upon the said issue. Even if they did, no such document or evidence was brought on record. (9) After the order of the CIT (Appeals) dated 26.02.1993 setting aside the assessment but permitting the Assessing Officer to proceed further from ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ier provisions would apply with reference to proceedings upto 31st March, 1988 and accordingly, limitation period for challenging of assessment etc. would be applicable. However, the assessment orders were passed post 1.4.1988. CIT (Appeals) has observed that in absence of proof of service of notices under Section 148, date of notice under Section 142 (1) was relevant. Notices under Section 142 (1) were post 1.4.1988. There is no factual finding on service of notices under Section 148 of the Act by the Tribunal. It is imperative to observe that in spite of the amendments, the basic postulates of the provisions both pre and post amendments remain substantially similar. The provisions as they existed before and after the amendments, postulate filing of objections before the Assessing Officer within stipulated periods, reference to the Commissioner or Commissioners concerned and a decision by the said Commissioner/ Commissioners/ the Board/ appropriate authority in case of disagreement between the Commissioners. (13) The provisions indicate that Sections 120, 124 and 127 of the Act recognizes flexibility and choice, both with the assessee and the authorities i.e. the Assessin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ars 1980-81 to 1983-84 were filed in Delhi, he would alone continued or had exclusive jurisdiction for assessment year 1985-86 onwards as well. ITO, Dimapur wrongly accepted the said plea/contention and had erroneously understood the legal provisions. They had concurrent jurisdictions, if the respondent assessee had residence in Delhi. The said stance and stand of the Revenue is contrary to their own stand in the case of K.K. Loomba (supra). On the said aspect, decision of the Delhi High Court in the case of K.K. Loomba (supra) is binding on us. Thus, the question of jurisdiction or the place of filing has to be examined each year with reference to provisions of Section 124 of the Act. Decision in K.K Loomba (supra) was pronounced in the year 2000 and dissents from the view/ ratio of the Punjab and Haryana High Court in Lt. Col Paramjit Singh (supra). Thus, when the proceedings were going on, the legal position was not clear and hence, debatable. However, as noticed above, Section 124 of the Act provides flexibility and postulates multiple and concurrent jurisdiction including filing of return and where the assessee has permanent or current residence or where he has sole/only sourc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....first round, the order of the tribunal dated 13.05.2002 cannot be sustained. (iii) In view of the answers to the substantial questions of law mentioned above relating to the first and the second round, the substantial question of law in the fourth round i.e. ITA Nos. 1577/2006, 1578/2006 and 1580/2006 has to be answered in favour of the Revenue and against the respondent-assessee but subject to the observations made above." 13. We have also perused the decisions which are relied upon by the Hon'ble Delhi High Court, as stated in the aforesaid paragraphs and on perusal of such decisions, copies of which are provided by the petitioner, it appears that the impugned notice issued by the respondent Assessing Officer cannot be said to be without jurisdiction. Therefore, in case of Abhishek Jain (supra), the Hon'ble Delhi High Court has also relied upon the decision in case of S.S. Ahluwalia (supra) to come to the conclusion that the notice in the facts of the said case, cannot be said to be without jurisdiction in view of the provision of section 124(1) of the Act which provides that the Assessing Officer would have jurisdiction over the areas in terms of the directions issue....