YOGESH CHOPRA,NEW DELHI vs ITO, WARD-2(1), GHAZIABAD

Income Tax Appellate Tribunal, DELHI ‘SMC-I’ BENCH, NEW DELHI

Before: SHRI H.S. SIDHU

For Appellant: Shri Sanjay Malik, Advocate

This appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax [Appeals], Ghaziabad dated 31.7.2018 pertaining to assessment year 2010-11 on the following grounds:-

1. That having regard to the facts and circumstances of the case the Ld. CIT(A) has erred in law and on facts in upholding the action of the AO in not admitting the additional evidences submitted by the assessee under Rule 46A of the Income Tax Rules, 1962.

2. That having regard to the facts and circumstances of the case the Ld. CIT(A) has erred in law and on facts in sustaining the action of the AO in making addition of Rs. 26,02,000/-.

3. That in any case and in view of the matter impugned reassessment order made under section 144/147 of the Income tax Act, 1961 is bad in law, illegal and unjustified and deserve to be quashed.

4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are prejudice to each other.

2. Later i.e. on 30.09.2019 the assessee has also filed some additional grounds, which are reproduced hereunder for the sake of convenience and Ld. Counsel for the assessee stated that these additional grounds goes to the root of the matter and in view of the Hon’ble Supreme Court of India decision in the case of NTPC 229 ITR 383 (SC) the same may be admitted. Additional Ground Ground 5 (in reference to ground no. 4): “That on facts and in law there is no jurisdiction with the ITO, Ward 2(1), Ghaziabad passing the order dated 06.11.2017. The jurisdiction of the assessee lied with ACIT/DCIT, Central Circle, Ghaziabad on that date. In the assessee case order of the said assessment year was also passed u/s. 153A/143(3) on 31st March, 2013 by DCIT, Central Circle, Ghaziabad.

Ground 5(a) The order u/s. 127 was passed on 21.6.2018 by Ld. CIT, Central Circle, Kanpur, for transferring the file from ACIT/DCIT, Central Circle, Ghaziabad to Addl. CIT, Range-30, New Delhi. Thus on facts in law the initiation on proceedings u/s. 148 by the AO, Ghaziabad on 30th March, 2017 is illegal, void and without jurisdiction, prayed that order may be quashed. Ground 6 (In reference to ground no. 4). That on facts and in law there is no tangible material with the AO and there was proper direction by the authorities, thus proceeding u/s. 148 are illegal, void and without jurisdiction, prayed that the order may be quashed.

At the time of hearing, Ld. Counsel for the assessee stated that the assessment order passed u/s. 153A/143(3) of the Income Tax Act, 1961 by the DCIT, Central Circle, Ghaziabad as on 31.3.2013, a copy thereof is attached at page no. 1&2 of the Paper Book. He further stated that the order u/s. 147 of the Act for transfer of jurisdiction was passed by the Ld. PCIT, Lucknow on 21.6.2018 which the assessee has attached at paper book page no. 3-4. He further stated that the order of the assessee’s file was transferred by the Ld. PCIT, Kanpur from Central Circle, Ghaziabad to ACIT, Range-30, New Delhi. The assessee has the jurisdiction with Central Circle, Ghaziabad from 26.2.2009 to 21.6.2018, placed at page no. 3-4 of the APB. The notice u/s. 148 of the Act was issued by the ITO, Ward 2(1), Ghaziabad having no jurisdiction over the assessee. He further stated that from the order of the PCIT, Kanpur, it was clear that at the time of issuing the notice u/s. 148 of the Act, the jurisdiction of the assessee lies with the DCIT, Central Circle, Ghaziabad and not with the ITO, Ward 2(1), Ghaziabad. He requested that keeping in view the facts and circumstances of the case, the assessment needs to be declared annulled and void. In support of his contention, he relied upon the decision of the ITAT, Amritsar Bench in the case of Mrs. Amina Rasool (2014) 49 taxmann.com 40 (Amritsar-Trib), copy attached at APB- 31-39 and ITAT, Lucknow Bench decision in the case of MI Builders (P) Ltd. (2008) 115 ITD 419 (Lucknow), copy attached at APB-40-54).

On this issue of jurisdiction the Ld. DR relied upon the orders of the revenue authorities.

I have heard both the parties and perused the relevant records especially the order passed by the revenue authorities. I find that the additional grounds raised by the assessee goes to the root of the matter and therefore, the same are admitted, in view of the Hon’ble Supreme Court of India decision in the case of NTPC 229 ITR 383. I am of the view that originally the AO completed the assessment u/s. 153A/143(3) of the Act by the DCIT, Central Circle, Ghaziabad on 31.3.2013 and order of transfer of jurisdiction was passed by the Ld. PCIT, Kanpur on 21.6.2018 which the assesse has attached in APB Page 3-4 and assessee’s file was transferred by the PCIT, Kanpur from ACIT/DCIT, Central Circle, Ghaziabad to Addl. CIT, Range-30, New Delhi. Therefore, the asessee has jurisdiction with Central Circle, Ghaziabad from 26.2.2009 to 21.6.2018. But the notice in dispute i.e. u/s. 148 of the Act issued by the ITO, Ward 2(1), Ghaziabad having no jurisdiction over the assessee. Therefore, I am of the considered view that the decisions relied upon by the Ld. Counsel for the assessee are applicable in the present case i.e. ITAT, Amritsar Bench, in the case of Mrs. Amina Rasool (2014) 49 taxmann.com 40 (Amritsar-Trib) wherein the Tribunal held that “where assessee, since its inception was being assessed at New Delhi, Assessing Officer, Srinagar had no jurisdiction to make assessment of assessee.”. Similarly the decision of the ITAT, Lucknow Bench in the case of MI Builders (P) Ltd. (2008) 115 ITD 419 (Lucknow) also applicable in the present case wherein it has been held that whether jurisdiction cannot be assumed by consent it has to be given by statute or by authorities under statute who are empowered in this behalf. Held, yes. It was further held that whether validation of proceeding by virtue of section 124(3) is specific from proceeding to proceeding and it cannot correct or create a jurisdiction in respect of other proceedings if Assessing Officer does not have jurisdiction. - Held yes. 5.1 Keeping in view of the facts and circumstances as explained above, I am of the considered view that assessment framed vide order dated 06.11.2017 by the ITO, Ward 2(1), Ghaziabad is null and void, because the AO has no jurisdiction over the assessee, therefore, the same is cancelled by accepting the contention raised by the assessee in the additional grounds of appeal

by deleting the addition in dispute.

6. As regards addition of Rs. 26,02,000/- made by the revenue authority on account of cash deposit in the savings bank account. I have gone through the contentions raised by the assessee in the impugned order as well as in the written submissions filed by the assessee alognwith the documentary evidences. I am of the view that the assessee is an individual and during the year under consideration earned income from business, house property and other sources as per para 6.2 at page no. 7 of the impugned order, the contention of the assessee is that the assessee has deposited the cash of Rs. 26,02,000/- in the savings bank account by withdrawing the cash in hand available with M/s Ashok Wadia and Sons (AOP) which is engaged in retail business of country liquor and IMFL. Assessee has also filed his copy of account in the books of AOP as on 31.3.2009. For the sake of convenience, the same is reproduced as under:- “Capital account of Sh. Yogesh Chopra Ji In the books of M/s Ashok Wadia & Others. As on 31.3.2009 Opening Balance Credit Balance As on 1.4.2008 30364.62 Add: Cash received on 1.4.2008 2250000.00 Add: Net profit after Tax of AOP @0.75% 221303.84 2501658.36

Less: Cash paid on 31.3.2009 2500000.00 _______________ Net Credit balance as on 31.3.2009 1659.36 PAN No. AAAAA4223E” 6.2 After going through the aforesaid capital account of the assessee, I am of the view that assessee has deposited a sum of Rs. 26,02,000/- out of cash in hand available with M/s Ashok Wadia and others, AOP, which is engaged in retail business of country liquor and IMFL. The assessee has also filed the documentary evidences of the same before the revenue authorities which have not been properly appreciated. Therefore, keeping in view of the facts and circumstances of the case, I am of the view that the addition in dispute is not sustainable in the eyes of law, because the assessee has fully explained the cash deposits in his savings bank account which he has deposited by withdrawing the cash available with M/s Ashok Wadia and others, AOP. Therefore, the addition in dispute is hereby deleted and this ground is accordingly allowed. Besides above, no other

YOGESH CHOPRA,NEW DELHI vs. ITO, WARD-2(1), GHAZIABAD