HARI DASS SINGLA,DELHI vs. INCOME TAX OFFICER, DELHI

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ITA 958/DEL/2021Status: DisposedITAT Delhi23 June 2022AY 2011-125 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment order was bad in law because the AO who framed the assessment did not issue the mandatory notice under Section 148. The Tribunal quashed the reassessment proceedings and deleted the consequential additions.

What were the facts?

The assessee challenged the reassessment proceedings and the assessment order. The primary contention was that the Assessing Officer (AO) who passed the assessment order had not issued the notice under Section 148 of the Income Tax Act. The assessment records were transferred without proper sanction.

What were the issues?

Whether the assessment framed by an AO who did not issue the Section 148 notice is valid. Whether the transfer of assessment records without proper sanction affects the jurisdiction of the AO.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 127,Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, DELHI BENCH, ‘SMC’: NEW DELHI

Hearing: 23.06.2022Pronounced: 23.06.2022

Appellant by Sh. R.R. Singla, CA Respondent by Sh. Sanjay Kumar, Sr. DR Date of Hearing 23.06.2022 Date of Pronouncement 23.06.2022 ORDER This present appeal has been preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) National Faceless Centre, Delhi [hereinafter referred to as CIT(A)] dated 30.07.2021, pertaining to AY 2011-12.

2.

The assessee in this appeal has taken following grounds of appeal:- 1. “The Ld. CIT(A) has erred in law and on facts by upholding the re-assessment proceedings.

2. The Ld CIT(A) has erred in law and facts while rejecting the ground of jurisdiction of the id. AO to frame the assessment

3. The Ld. CIT(A) has erred in iaw and on facts while upholding the additions made by invoking the provisions of section 69A of the Income Tax Act.

4. The Ld. CIT(A) has erred in law and facts while upholding the additions without providing cross confrontation to the assessee on the evidences relied upon by the Id.AO.

5. The Ld. CIT(A) has erred in law and facts while presuming the facts and figures which were quite wrong and irrelevant as against the actual facts and figures explained by the assessee.

6. The Ld. CIT(A) has erred in law and facts while taking the online purchase of shares to be offline preferential purchase converted to Dmat Account

7. The Ld. CIT(A) has erred in law and facts while upholding the invocation of provisions of section 115BBE of the Income Tax for the Assessment Year 2011- 12.”

3.

The assessee inter alia has challenged the jurisdiction of the AO who framed the impugned assessment order. At the outset, the Ld. Counsel for the assessee has invited my attention to page 28 of the paper book to submit that the notice u/s 148 of the Act dated 31.03.2018 was issued by the ITO, Ward-37(4), Delhi and whereas, the assessment order in this case has been passed by the ITO Ward 50(4). The Ld. counsel for the assessee has submitted that ITO, Ward 50(4), New Delhi, who framed the assessment order did not issue any notice u/s 148 of the Act. The ld. Counsel for the assessee further submitted that the assessment records were transferred by the ITO, Ward-37(4) to the ITO, Ward-50(4), Delhi during the pendency of the proceedings without getting any order/sanction u/s 127 of the Income Tax Act from the competent authority. The Ld. Counsel for the assessee has submitted that to assume jurisdiction to frame the assessment order u/s 147 of the Act, the notice might have been issued by the concerned Assessing Officer as per law and that since the concerned ITO, Ward-50(4) did not issued notice u/s 148 of the Act, therefore, the assessment order framed by him was not valid and the same is liable to be quashed. The Ld. Counsel for the assessee in this respect has relied upon the decision of the Co-ordinate Bench of the Tribunal in the case of Mukesh Kumar vs ITO in order dated 12.06.2015.

4.

The Ld. DR, on the other hand, relied upon the findings of the lower authorities.

5.

I have heard the rival contention and gone through the record.

Admittedly, no notice was issued by the concerned ITO-Ward-50(4) to the assessee before proceeding to frame the assessment. Any notice issued by ITO, Ward-37(4) being without jurisdiction has no legal sanctity. The issue is squarely covered by the decision of the Co-ordinate Bench of the Tribunal in the case of Mukesh Kumar vs ITO in order dated 12.06.2015. The relevant part of the order is reproduced hereunder:-

“5. We perused the relevant material on record. In the present case the notice u/s 148 was issued on 2nd March 2009 by ITO Ward-26(4) New Delhi. After receipt of notice the appellant had responded through its authorized Representative and submitted the copy of the return filed under provisions of section 139. After noticing that the jurisdiction over the appellant is vested with ITO Ward-26(3), the file was transferred by ITO Ward-26(4) to ITO Ward - 26(3). The ITO Ward-26(3), New Delhi had proceeded with the framing assessment without issuing fresh notice u/s 148. It means that ITO Ward-26(4), New Delhi had no valid jurisdiction over the appellant, at the time of issuing notice u/s 148 of the Act. In such circumstances, it was held by the Hon'ble Allahabad High Court in the case of CIT Vs. M/s MT Builders Pvt. Ltd., (2012) 349 ITR 271 (All.) that the notice issued by an Officer who had no valid jurisdiction over the assessee is invalid. The notice under Section 148 of the Act issued by the Income Tax Officer, Ward-26(4) is non est in the eyes of law since he had no valid jurisdiction over the appellant either territorial as notified under Section 124 of the Act or by transferring the case under the provisions of Section 127 of the Act. Now, the question is whether the action of the Income Tax Officer, Ward-26(3) New Delhi was valid in law in concluding the assessment proceedings based on the notice issued under Section 148 of the Act by the Income Tax Officer, Ward- 26(4) who had no valid jurisdiction to issue the notice. The issue of valid jurisdiction is a condition precedent to the validity of any assessment under Section 147 of the Act; therefore, the assessment made pursuant to such notice is bad in law. In support of this proposition we rely upon the cases of Hon'ble Apex Court in the cases of Y. Narayana Chetty Vs. ITO, 35 ITR 388, 392 (SC); CIT Vs. Maharaja Pratap singh Bahadur, 41 ITR 421 (SC); and CIT Vs. Robert, 48 ITR 177 (SC). In the light of the above settled principle of law, we have no hesitation to quash the reassessment proceedings since there was no valid notice pursuant to which the reassessment proceeding was made in the present case. Accordingly, the appeal filed by the appellant is allowed.”

6.

In view of this, the assessment framed by the ITO, Ward-50(4) being bad in law for want of issue of notice u/s 148 of the Act is hereby quashed and consequential addition stands deleted.

7.

In the result, the appeal of the assessee stands deleted.

Order pronounced in the open Court on 23.06.2022.

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