JAYESH LALWANI,,VADODARA vs. THE ITO, WARD-1,, GODHRA

The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-4, Vadodara (‘CIT(A)’ in short), dated 23.06.2017 arising in the assessment order dated 17.03.2016 passed by the Assessing Officer (AO) under s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (the Act) concerning AY 2008-09.

raised by assessee read as under: [Jayesh Lalwani Vs. ITO] A.Y. 2008-09 - 2 - “1.00 ORDER IS BAD IN LAW. 1.01 On the facts and circumstances of your appellant's case and in law, the Hon'ble CIT (Appeal) has erred in disposing appeal of appellant without providing any opportunity of being heard without providing personal hearing. 1.02 Your appellant prays that the Order be treated as Bad in Law. 2.00 ADDITION OF RS. 23, 42,276 /- u/s 68. OF THE INCOME TAX ACT, 1961 AS UNEXPALINED CASH AND CHEQUES DEPOSITS INTO BANK ACCOUNT. 2.01 On the facts and circumstances of your appellant's case and in law, the Hon'ble CIT (Appeal) has erred in confirming the action of ld. AO by making addition to the tune of Rs. 23,42,276/- as unexplained cash credit without considering the facts of the case. The Hon'ble CIT (Appeal) failed to appreciate the authentic facts and circumstantial evidences furnished before the Hon'ble CIT (Appeal) to prove the genuineness and creditworthiness of transaction for such unwarranted and unjustified addition of unexplained cash credit. The same has been completely ignored.”

3. The assessee has also filed additional ground challenging the jurisdiction assumed under s.147 of the Act which reads as under:

“The appellant, through oversight, could not raise in the original appeal memo, the following legal ground of appeal and therefore, appellant now craves leave to raise this additional ground of appeal before this Hon'ble ITAT. This, being a legal ground, can be raised before Hon'ble the ITAT as per decision of Hon'ble Supreme Court in the case of "National Thermal Power - 229 ITR 383".

1. On the facts and circumstances of the case, the Assessing Officer was not justified in reopening the assessment under section 147 of the Act.”

4. When the matter was called for hearing, the learned AR for the assessee requested for admission of additional ground concerning jurisdiction issue raised with reference to Section 147 of the Act. When enquired by the Bench, it was admitted that the issue challenging the jurisdiction was not raised before the lower authorities. The learned AR however insisted that the legality of jurisdiction can be raised before the Tribunal for the first time as the relevant facts are available on record. [Jayesh Lalwani Vs. ITO] A.Y. 2008-09 - 3 - 5. The learned DR, on the other hand, submitted that the issue raised in the additional ground towards legality of jurisdiction has not been examined by the lower authorities and therefore it will not be proper for the Tribunal to examine the issue for the first time without taking cognizance of the observations of the lower authorities on this score.

6. As noted above, the assessee has challenged the validity of assumption of jurisdiction under s.147 of the Act. It is noticed that the issue was neither raised before the AO nor before the CIT(A). It is however well settled that the provision which confers the jurisdiction for assessment and re-assessment could never be waived for the simple reason that the jurisdiction could neither be waived nor created by consent. The Tribunal is thus not prevented from considering the question of law towards jurisdiction although not raised earlier. The question of inherent lack of jurisdiction to re-open a case goes to the root of the matter and substantially affects the rights of the assessee if the illegal proceeding on the basis of wrongful usurpation of jurisdiction is allowed to continue. It thus appears to us that the assessee is entitled to plead lack of jurisdiction for the first time before the Tribunal. We however in the same vain observe that the pros and cons of the objections of the assessee with regard to jurisdiction requires to be examined by the Revenue authorities to enable us to take an informed view on the issue. We thus consider it expedient to restore the issue towards lack of jurisdiction to the file of the CIT(A). It shall be open to the assessee to raise the objections in connection with the assumption of jurisdiction under s.147/148 of the Act. The CIT(A) shall examine the legality of assumption of jurisdiction in accordance with law and pass a speaking order in this regard.

7. As the issue of jurisdiction has been remitted back to the file of the CIT(A), we also consider it expedient to set aside the order of the CIT(A) on merits and restore the issues raised before the CIT(A) on merits once again to the file of the CIT(A) for de novo examination after [Jayesh Lalwani Vs. ITO] A.Y. 2008-09 - 4 - granting reasonable opportunity to the assessee and after making or cause to make such enquiry as may be considered necessary for adjudication on merits. Consequently, the order of the CIT(A) is set aside and all issues are remitted back to the file of the CIT(A) for determination in terms of directions noted above and in accordance with law.

This Order pronounced in Open Court on 02/08/2019

Sd/- Sd/- (RAJPAL YADAV) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 02/08/2019 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।