PR. COMMISSIONER OF INCOME TAX -12, vs. SHRI HARBANS LAL

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ITA/528/2017HC DelhiDLHC01320609201725 July 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH2 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the Income Tax Appellate Tribunal (ITAT) was justified in annulling the assessment order by invoking Section 124(3) of the Income Tax Act, 1961. The reasoning was based on the admitted fact that the jurisdiction of the case was transferred from ITO Ward 19(4), New Delhi to ACIT, Circle 19(1) New Delhi by an order under Section 127 of the Act. Consequently, the ITAT rightly concluded that no jurisdiction was vested with the ITO, Ward 19(4). Therefore, the notice issued by him under Section 143(2) on 21st July, 2008, was invalid. The inevitable result of an invalid notice issued by an officer lacking jurisdiction is that the consequential assessment order would be invalid. The Tribunal found no substantial question of law arising from the impugned order of the ITAT. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue, Pr. Commissioner of Income Tax -12, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 27th December, 2016, passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 2458/Del/2011. The appeal pertains to Assessment Year 2007-08. The core issue revolves around the ITAT's decision to annul the assessment order by invoking Section 124(3) of the Act. The admitted fact is that the jurisdiction of the case was transferred from ITO Ward 19(4), New Delhi to ACIT, Circle 19(1) New Delhi by an order under Section 127 of the Act. The ITAT found that the ITO who issued the notice under Section 143(2) lacked jurisdiction.

What were the issues?

1. Whether the ITAT was justified in annulling the assessment order by invoking Section 124(3) of the Income Tax Act, 1961? (Question of law) Assessee's Contention: The ITAT rightly held that no jurisdiction was vested with the ITO, Ward 19(4), and therefore, the notice issued by him under Section 143(2) on 21st July, 2008, was invalid. Consequently, the assessment proceedings were bad in law and the assessment was annulled. Revenue's Contention: The Revenue argued that the ITAT was not justified in annulling the assessment order by invoking Section 124(3) of the Act. The judgment does not record any specific authorities, circulars, or precedents relied upon by the Revenue.

Which sections of the Income-tax Act were involved?

Section 260A,Section 124(3),Section 127,Section 143(2)

AI-generated summary — verify with the full judgment below

$~28 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 528/2017 PR. COMMISSIONER OF INCOME TAX -12, ..... Appellant Through : Mr. Arun Chatri, Advocate. versus SHRI HARBANS LAL ..... Respondent Through : Nemo. CORAM: JUSTICE S.MURALIDHAR JUSTICE PRATHIBA M. SINGH O R D E R % 25.07.2017 CM APPL. No. 26009/2017 (Delay in re-filing) 1. For the reasons stated in the application, the delay in re-filing this appeal is condoned. The application is disposed of. ITA 528/2017 2. This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (‘Act’) is directed against an order dated 27th December, 2016 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 2458/Del/2011 for the Assessment Year (‘AY’) 2007-08. 3. The question urged by the Revenue is whether the ITAT was justified in annulling the assessment order by invoking Section 124(3) of the Act or not.

4.

The admitted fact is that the jurisdiction of the case was transferred from ITO Ward 19 (4), New Delhi to ACIT, Circle 19(1) New Delhi by order under Section 127 of the Act. The ITAT has rightly held that no jurisdiction was vested with the ITO, Ward 19(4) and, hence, the notice issued by him under Section 143(2) on 21st July, 2008 was invalid. The consequent assessment proceedings were held to be bad in law and assessment was, accordingly, annulled. 5. Once the notice under Section 143 (2) of the Act is found to have been issued by an ITO who lacks the jurisdiction to do so, the inevitable result is that the consequential assessment order would be invalid. No substantial question of law arises from the impugned order of the ITAT. 6. The appeal is, accordingly, dismissed. S.MURALIDHAR, J PRATHIBA M. SINGH, J JULY 25, 2017 j

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