TaxTMI 
TaxTMI 
2025 (10) TMI 154
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....under Section 148 of the Income Tax Act, 1961 (For Short "the Act") for the Assessment Year 2017-18 on the ground that the respondent Assessing Officer, Ward 1(1)(3), Ahmedabad has no jurisdiction to issue the notice as the jurisdiction of the petitioner lies with the Assessing Officer, Bhavnagar, in addition to their challenge to the merits of the notice. 5. The brief facts of the case are as under : 5.1. The petitioner filed return of income for Assessment Year 2017-18 at Bhavnagar on 28.09.2017 declaring loss of Rs. 1,47,53,889/-. The respondent no. 1 Income Tax Officer, Ward 1(1)(3), Ahmedabad issued the impugned notice dated 30.03.2021 calling upon the petitioner to file the return of income for Assessment Year 2017-18 under Section 148 of the Act. The petitioner without prejudice filed its return in compliance to the said notice on 22.04.2021 and sought for reasons recorded for reopening which were provided by the respondent no. 1 on 10.06.2021. 5.2. The petitioner thereafter filed the preliminary objection on 02.08.2021 challenging the validity of the impugned notice raising the objection that as per provisions of Section 124 of the Act, the business of the petition....
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.... that the reliance placed by the respondent on the screenshot showing the PAN jurisdiction in the ITBA (Income Tax Business Application) portal is of no consequence in absence of the order passed under Section 127 of the Act by the competent authority. It was, therefore, submitted that in view of such undisputed fact, the petition is required to be allowed as the impugned notice and the order disposing of the objections are without jurisdiction. It was submitted that in alternative also the petitioner has a very good case on merits as the reasons recorded for reopening are pertaining to the entities with which the petitioner has never dealt with and, therefore, there is no information available on record which shows that there is escapement of income so as to reopen the assessment for the year under consideration. 7. Per contra, learned Senior Standing Counsel Mr. Varun K. Patel for the respondents referred to and relied upon the first affidavit affirmed on 19.01.2025 on behalf of the respondent no. 1 wherein it is contended as under:- "5. With reference to para 3.2, the respondent denies each and every allegation, averment and/or contention raised in this para. In supp....
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....unaccounted fund of M/s. Globe 200 Sourcing Pvt. Ltd which has been routed back to M/s. Globe 200 Sourcing Pvt. Ltd in the form of unsecured loans and the Surat based entities were being used as a conduit only. Therefore, the reason assigned while issuing notice and order under Section 148 are just and proper. Annexed hereto and marked as Annexure-R/2 is a copy of information along with documents available to the assessing officer on the insight portal in the present case." 7.1 From the above averments it was submitted that the respondent no. 1 had assumed the jurisdiction on the basis of the information relating to the PAN jurisdiction available in the system. Learned Senior Standing Counsel Mr. Patel invited the attention of the Court to the Annexure-R1 (page 62 of the paper book to demonstrate that after 2020, the PAN jurisdiction is with the respondent no 1. It was submitted that the jurisdiction was transferred from Ward 1(1)(4), Ahmedabad to Ward 2(1) Bhavnagar on 08.11.2019 by transfer order ending with 16109 and thereafter the jurisdiction was transferred from Ward 1(1) (4), Ahmedabad to Ward 1(1)(3) Ahmedabad on 13.10.2020 by transfer order ending with 46063 an....
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.... 4. It is further relevant to submit that though the assessee in his objections stated that the assessee company does not have any or in office/factory/place of business at Ahmedabad district, the website of the petitioner company i.e. diamondtmt.com/contact-us and diamondtmt.com/about [DIAMONDTMT500+] shows as on the date that the corporate office of the company is in Ahmedabad at 402, Ashirvad Paras Near Prahladnagar, Auda Garden, Satelite, Ahmadabad Gujarat (IN)-380015. The screenshot of relevant pages of website of the petitioner company are marked as Annexure-R/2." 7.3. Referring to the above averments it was submitted that the Assistant Commissioner, Income Tax Bhavnagar has also stated that the transfer of the PAN from Ahmedabad to Bhavnagar could not be executed in view of the transfer order dated 25.10.2016 and the PAN of the petitioner had remained with the office of the ITO Ward 1(1) (4) Ahmedabad at the relevant point of time, which was further transferred on system to Ward 1(1) (3) Ahmedabad and therefore, the impugned notice is with jurisdiction. It was also submitted that the Assistant Commissioner of Income Tax Bhavnagar in the affidavit has also stated that the....
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....nexed hereto and marked as Annexure-R/4. 5. It is submitted that efforts were made by the AO to effectuate the PAN transfer on the system. That for a brief period during 2019, the PAN did reflect technically under Bhavnagar jurisdiction, however, this was not sustained due to system-related constraints. As per the ITBA, the transfer order could not be executed on 08.11.2019 and thus PAN could not be erred, acknowledging the system failure. 6. It is further respectfully submitted that in the current system-pendent regime, jurisdiction is effectively exercised only appropriate jurisdiction in the ITBA portal. The transfer of case records, although duly completed, does not suffice in practical terms without technical reflection of PAN. For complete transfer of the case from one charge to other charge both activities are necessary i.e. passing of order u/s 127 of the Act and PAN transfer. Notwithstanding the technical shortcoming, the AO at Bhavnagar was able to conduct necessary proceedings in coordination with the AO at Ahmedabad and carried out basic assessment functions. 7. It is submitted that when the notice under Section 148 for A.Y. 2017-18 was issued....
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....aced on the judgment of Hon'ble High Court of Calcutta in the case of Elite Pharmaceuticals Vs. ITO. ward46(1) Kolkata (2016) 73 taxmann.com 69 (Calcutta) and the judgment of Hon'ble High Court, Delhi in the case of Abhisek Jain vs. ITO, Ward-55(1), New Delhi [ (2018) 94 taxmann.com 355 (Delhi)]." 7.5. Referring to the above affidavit and the averments made therein, it was submitted that as the petitioner is having place of business in Ahmedabad and respondent no. 1 has jurisdiction to issue the impugned notice for reopening under Section 148 of the Act. 8. In support of his submissions, reliance was placed on the following decisions :: (1) The decision of Hon'ble Delhi High Court in case of Abhishek Jain v. Income Tax Officer, Ward 55(1), New Delhi reported in [2018] 405 ITR 1. (2) The decision of Hon'ble Delhi High Court in case of Commissioner of Income Tax, Delhi-XVI v. S.S. Ahluwalia reported in [2014] 267 CTR 185 (Delhi). 8.1. It was submitted that in both the cases, similar facts were available with the Hon'ble Delhi High Court. It was submitted that in case of Abhishek Jain (supra) the notice issued under Section 148 of the Act by the resp....
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.... or place of business or work etc. the Assessing Officer of place where the assessee has shifted or otherwise will have jurisdiction and it is not necessary that in such cases, an order under Section 127 of the Act is required to be passed. It was, therefore submitted, that when the petitioner has Corporate office at Ahmedabad there is no need of any order of transfer under Section 127 of the Act to assume the jurisdiction to issue notice under Section 148 of the Act. 10. Having heard the learned advocates for the respective parties and considering the facts of the case, it is not in dispute that there is no transfer order passed under Section 127 of the Act is available after the transfer of the case of the petitioner to Bhavnagar by the transfer order dated 25.10.2016. It appears that the respondent no. 1 Assessing Officer has assumed the jurisdiction only on the basis of the data reflected in the ITBA system which shows that the PAN jurisdiction of the Assessing Officer was with the respondent no. 1. 10.1. It is therefore very apparent that the respondent no. 1 Assessing Officer has without application of mind as to whether the petitioner has filed the return of income for....
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....come Tax Officer, Noida had not passed any order for transfer of the case. In such facts, the Hon'ble Delhi High Court held that the case of the petitioner before the Court did not respond to the notices issued under Section 148 of the Act and thereafter the objection was raised to the Income Tax Officer Ward 1(1) Noida after 31.03.2016 and thereafter so as to see that the prescribed time limit under Section 149 of the Act is over and thereafter the Income Tax Officer, Delhi could not have issued the fresh notice under Section 148 of the Act. In view of the provisions of the Act and peculiar facts of the case, it was held as under :- "19. We would reiterate that sub-section (1) to Section 124 states that the Assessing Officer would have jurisdiction over the area in terms of any direction or order issued under sub-section (1) or sub-section (2) to Section 120 of the Act. Jurisdiction would depend upon the place where the person carries on business or profession or the area in which he is residing. Sub-section (3) clearly states that no person can call in question jurisdiction of an Assessing Officer in case of non-compliance and/or after the period stipulated in clauses (a....
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....ection 120 and Section 124 of the Act. Under sub-section (1), transfer order under Section 127 can be passed by the Director General, Chief Commissioner or Commissioners from one Assessing Officer to another Assessing Officer subordinated to them. Sub-section (2) applies where the Assessing Officer to whom the case is to be transferred is not subordinated to the same Director General, Chief Commissioner or Commissioners of the Assessing Officer from whom the case is to be transferred. This is not a case of a transfer under Section 127 of the Act. This is a case in which the assessee had raised an objection stating that the Income-Tax Officer, Ward-1 (1), Noida should not continue with the assessment as the petitionerassessee was regularly filing returns with the Income-Tax Officer, Ward-58 (2), Delhi. Objection as raised were treated as made in terms of sub-section (3) to Section 124, notwithstanding the fact that there was delay and non-compliance. The Income-Tax Officer, Ward-1 (1), Noida accepted the request/prayer of the petitioner and had transferred pending proceeding to the Assessing Officer, Ward-58 (2), Delhi. Therefore, there was no need to invoke and follow the procedure....
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....2, 257/02 and 255/02 holding:- (i) There was failure on the part of the Assessing Officer, Delhi and ITO, Dimapur in not following the procedure prescribed under Section 124 of the Act, but this would not make the assessment in the first round a nullity. The assessment order passed should have been set aside as was directed by CIT(Appeals) and assessments remitted for a fresh decision. Question of law is accordingly answered in favour of the Revenue and against the respondent-assessee but in the aforesaid terms. (ii) ITA Nos. 314/02, 315/02 and 316/02 which relate to the second round, the substantial question of law is answered in favour of the Revenue and against the respondent-assessee. The tribunal clearly erred in not noticing that in the second round assessment order were passed by ITO, Dimapur and consequent to the order under Section 127, the first appeal was decided by CIT(Appeals) at Delhi. In view of the decision in ITA Nos. 256/02, 257/02 and 255/02 relating to the 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 an....
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....5/02 and 316/02 which relate to the second round, the substantial question of law is answered in favour of the Revenue and against the respondent-assessee. The tribunal clearly erred in not noticing that in the second round assessment order were passed by ITO, Dimapur and consequent to the order under Section 127, the first appeal was decided by CIT(Appeals) at Delhi. In view of the decision in ITA Nos. 256/02, 257/02 and 255/02 relating to the 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. 58. In light of the aforesaid discussion and the position of law, the substantial question of law raised in the present wealth tax appeals are answered in favour of the appellant-Revenue and against the respondent-assessee. It is apparent that the respondent assessee did not challenge and object to the ju....