SAROJIN SATPATHY,BHUBANESWAR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5(1), BHUBANESWARW, BHUBANESWAR

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ITA 261/CTK/2024Status: DisposedITAT Cuttack13 August 2024AY 2017-184 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that issuing a notice under Section 148 of the Income Tax Act when the original return was still pending and within the time limit for issuing a notice under Section 143(2) is bad in law. Consequently, the notice and the consequential assessment were quashed.

What were the facts?

The assessee's appeal was delayed by 61 days due to the order being missed in the spam folder. The assessee challenged the reopening of assessment proceedings initiated by the Assessing Officer via a notice under Section 148 before the processing of the originally filed return.

What were the issues?

Whether reopening of assessment under Section 148 is valid when the original return is pending and within the time limit for normal assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(2),Section 124(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,

Before: MANISH AGARWAL

For Appellant: Shri P.K.Mishra, Adv
For Respondent: Shri S.C.Mohanty, Sr
Hearing: 13/8Pronounced: 13/8

Assessment Year : 2017-18 Sarojini Sarojini Satpathy, Satpathy, At:N At:N- Vs. Asst. Asst. Commissioner Commissioner of of 3/455, IRC Village, PO/PS: 3/455, IRC Village, PO/PS: Income Income Tax, Tax, Circle Circle-5(1), Nayapalli, Bhubaneswar Nayapalli, Bhubaneswar Bhubaneswar Bhubaneswar PAN/GIR No. No.ASGPS 9377 Q (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : Shri P.K.Mishra, Adv P.K.Mishra, Adv Revenue by : Shri S.C.Mohanty, Sr S.C.Mohanty, Sr DR Date of Hearing : 13/8 8/2024 Date of Pronouncement : 13/8 /8/2024 O R D E R Per Bench

This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated CIT(A), NFAC, Delhi dated 7.2.2024 in Appeal No.CIT(A), Bhubaneswar CIT(A), Bhubaneswar- 2/10298/2019 2/10298/2019-20 for the assessment year 2017-18.

2.

Shri P.K.Mishra, P.K.Mishra, ld AR appeared for the assessee and Shri the assessee and Shri S.C.Mohanty, Sr. S.C.Mohanty, Sr. DR appeared for the revenue.

3.

The appeal of the assessee is delayed by 61 days. The The appeal of the assessee is delayed by 61 days. The The appeal of the assessee is delayed by 61 days. The assessee has filed condonation petition supported by affidavit, wherein, he has mentioned filed condonation petition supported by affidavit, wherein, he has mentioned filed condonation petition supported by affidavit, wherein, he has mentioned

P a g e 1 | 4 that the order had been served in the spam folder of the assessee’s counsel and same was lost track of. It was only when the assessee opened the portal, he found that the order has been passed and same was verified by the counsel and checked spam folder and immediately on tracing the order, the appeal has been filed. The reasons given by the assessee is found to be plausible and has not been found to be false. Consequently, the delay in filing of the appeal is condoned and the appeal of the assessee disposed of on merits.

4.

It was submitted by ld AR that the assessee had filed his return of income for the impugned assessment year on 25.9.2017. It was the submission that without processing the said return filed, the Assessing Officer had initiated the proceedings of reopening by issuance of notice u/s.148 on 23.5.2018. It was the submission that the time limit for issuance of notice u/s.143(2) was available till 30.9.2018. Consequently, notice issued u/s.148 of the Act on 23.5.2018 was bad in law. Ld AR placed reliance on the decision of Hon’ble Madras High Court in the case of K.M.Pachayappan (2008) 304 ITR 264 (Mad), wherein, following the decision of Hon’ble Supreme Court in the case of Trustees of H.E.H. The Nizama’s Supplemental Family Trust vs CIT, 242 ITR 381 (SC) and also the decision of Hon’ble Delhi High Court in the case of KLM Royal Dutch Airlines vs Asst. Director of Income Tax, 292 ITR 49 (Del) held that no action could be initiated u/s.147 of the Act when there is pendency of the return before

P a g e 2 | 4 the Assessing Officer. Ld AR also relied upon the decision of Hon’ble Madras High Court in the case of CIT vs. Qatyalys Software Technologies Ltd., (2009) 308 ITR 249 (Mad), wherein, identical finds have been rendered by the Hon’ble High Court.

5.

In reply, ld Sr DR vehemently supported the order of the AO and ld CIT(A). It was the submission that in view of the provisions of section 124(3) of the Act, the assessee having not challenged the reopening within one month before the Assessing Officer, the reopening is liable to be upheld.

6.

We have considered the rival submissions. A perusal of the provisions of section 124(3) of the Act clearly shows that the provision is in relation to the jurisdiction of the Assessing Officer over an assessee. In the present case, the assessee has not challenged the jurisdiction of the AO. The assessee has challenged the action of the Assessing Officer in reopening of the assessment during the pendency of a valid return remaining live before the Assessing Officer. Admittedly, in the present case, the return has been filed on 25.9.2017 and the time limit for issuance of notice u/s.143(2) of the Act expires only on 30.9.2018. Consequently, the issuance of notice u/s.148 of the Act on 23.5.2018 when the return was live before the Assessing Officer is bad in law and is liable to be quashed and we do so. Our view finds support from P a g e 3 | 4 the decision of Hon’ble Madras High Court in the case of CIT vs. K.M.Pachayappan (supra) and in the case of Qatalys Software Technologies Ltd (supra). Consequently, notice issued u/s.148 of the Act is quashed and the consequential assessment also stands quashed.

7.

In the result, appeal of the assessee stands allowed.

Order dictated and pronounced in the open court on 13/08/2024.

Sd/- sd/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 13/08/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : 1. The Appellant : Sarojini Satpathy, At:N- 3/455, IRC Village, PO/PS: Nayapalli, Bhubaneswar 2. The Respondent: Asst. Commissioner of Income Tax, Circle-5(1), Bhubaneswar 3. The CIT(A)- NFAC, Delhi 4. Pr.CIT2, Bhubaneswar 5. DR, ITAT, 6. Guard file. //True Copy// By order

Sr.Pvt.Secretary ITAT, Cuttack

P a g e 4 | 4

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