INCOME TAX OFFICER, TANUKU vs. RAJESWARI MULLAPUDI, TANUKU

In the above cited appeal, the Revenue filed an appeal before the ITAT stating that the Learned Commissioner of Income-Tax (Appeals) (hereinafter in short “Ld.CIT(A)”) has erred in quashing the notice issued under section 148 of Income Tax Act, 1961 (hereinafter in short “the Act”) by the Jurisdictional Assessing Officer (“in short “JAO”) because the said notice was issued in accordance with the provisions of the Finance Act, 2021 w.e.f. 01.04.2021 and after following the due procedure prescribed under section 148A of the Act including providing opportunity. As per the provisions of section 148 r.w.s. 148A of the Act, the JAO based on the information in his possession that certain income chargeable to tax has escaped assessment and hence a notice was properly issued under section 148 of the Act. As the action of the JAO is in conformity with the law, the order of Ld.CIT(A) in quashing the notice is erroneous and unsustainable. Second ground of appeal raised by the Revenue is that Ld.AO issued the notice as per provisions of section 124(5) of the Act r.w.s. 120(1) & 102(2) of the Act because the JAO is expressly vested with authority over the assessees situated within the relevant territorial area. Thirdly, the Ld.CIT(A) ignored the provisions of section 124(3)(a) and section 124(3)(b) of the Act because the assessee ought to rise the objections with respect to jurisdiction of JAO within the stipulated time of one month from the date of service of notice under section 143(2) / 142(1) of the Act where a return of income was filed otherwise before the completion of assessment in case no return of income was filed, but not after completion of reassessment proceedings. In the above cited appeal, the Ld.CIT(A) quashed the notice issued by the JAO stating that the Ld. JAO does not have jurisdiction to issue the said notice and hence the consequent proceedings are also invalid. Aggrieved by this order of Ld.CIT(A), the Revenue filed an appeal before the Tribunal.

During the hearing proceedings before the ITAT, the Learned Departmental Representative (hereinafter in short “Ld.DR”) has stated that the issue relating to validity of passing the assessment order by the Ld.JAO reached the Hon’ble Supreme Court because there is difference of opinion between Hon’ble High Courts. The Hon’ble Delhi High Court supported the case of Revenue whereas the other Hon’ble High courts held that the JAO cannot issue a notice under section 148 of the Act after the new Faceless Scheme of Assessment has been incorporated under the Act. Hon’ble Supreme Court has remitted the above issue relating to section 148 of the Act, back to the respective Hon’ble High courts to adjudicate the issue in view of the retrospective amendments made by the Legislature. Now the matter is to be adjudicated by the respective Hon’ble High Courts.

In view of the above, this matter relating to the validity of issuing notice under section 148 of the Act by the JAO is remitted back to the file of Ld.CIT(A). He is directed to give opportunity to the assessee and follow the direction of the Jurisdictional High Court as and when the order is passed by the Hon’ble High Court.

In the result, appeal filed by the Department is allowed for statistical purposes.