RAMAN PILLAI SIVASANKARA PILLAI,BALTANA vs. DCIT, INTERNATIONAL TAXATION, CIRCLE, CHANDIGARH

Brief facts are that the assessee had been non-resident from the year 2000 to 2013 as he was working in Afghanistan as a cook and he came back to India only in the year 2013, due to adverse circumstances in Afghanistan and during the year under consideration, the assessee had deposited Rs. 28.50 lacs in his bank account, maintained with Syndicate Bank, Sector-17, Chandigarh. It was argued that on account of such cash deposits, the Assessing Officer, Ward 4(4), Chandigarh vide notice, dated 09.03.2016, issued a letter for verification of deposits of Rs.28.50 and to which the assessee by way of letter dated 14.03.2016 replied that he had sold certain agricultural land in 'District Kollam', Kerala in FY 2008-09 and out of that amount, the sale proceeds were deposited in the saving bank account. It was further stated that he was out of India from 2000 to 2013 and he is a non-resident Indian. It was contended that the AO was made aware of the fact that the Assessee is an NRI. It was further

It was further argued that without there being any request by the assessee to transfer the case to the DCIT (International Taxation), Chandigarh, the case was transferred to the DCIT, (International Taxation), Chandigarh vide letter dated 10.08.2016 and the same is borne out from the order of the Assessing Officer Ward-3(1), Chandigarh wherein, he on his own transferred the case records, along with the notice u/s 148 to the DCIT, International Taxation, Chandigarh. The DCIT, International Taxation, without any fresh issue of notice u/s 148, framed the assessment in the status of non-resident and made an addition of Rs. 28.50 lacs in respect of the cash deposit in the bank account maintained with Syndicate Bank, Sector-17, Chandigarh.

It was contended before us that neither the ITO Ward-4(4), Chandigarh or the ITO Ward-3(1) had the jurisdiction, as the assessee

The ld. Counsel for the Assessee, thus, argued that though the assessee had intimated to Assessing Officer, Ward 4 (4), Chandigarh that he was an NRI as per the letter dated 14.03.2016 in the year under assessment, but the Assessing Officer Ward-3(1), Chandigarh went ahead to issue notice u/s 148.. The assessee never asked for transfer of the case to the DCIT, International Taxation, Chandigarh. Relying on various case laws, the ld. Counsel argued, on the basis of the Jurisdictional bench of ITAT and of the coordinate Bench of ITAT Delhi, Jaipur and Raipur Tribunal and of the Hon'ble Mumbai High Court, for which, the brief synopsis were filed sought the quashing of reassessment proceedings u/s 148 as framed by the Assessing Officer vide order dated 22.12.2016. The reliance is placed on the following judgements: - • The DCIT vs. Shri Manjeet Singh as reported in (ITAT Chd, 15.10.2024) • Shri Manjeet Singh vs. The DCIT as reported in (ITAT Chd. 17.12.2019)

The Ld. Counsel of the assessee, also argued at length on the issue that there was no service of notice u/s 148, either by post or by way of affixture and service of the valid notice is a prerequisite and without their being any service of a notice u/s 148, the assumption of jurisdiction by the Assessing Officer was bad in law. He relied upon the judgment of ITAT Amritsar Bench in the case of ‘Mandeep vs. ACIT’ reported in [2024] 162 taxmann.com 637 (Asr. Trib.), dated 07.05.2024 and the judgment of Punjab & Haryana High Court in the case of ‘CIT vs. Harish Chandra’ reported in 323 ITR 49. On merits of 770-Chd-2019 – Raman Pillai Sivasankara Pillai Baltana, Punjab 9 the case, the copy of sale deeds were filed before the ld. CIT(A) and even the copies of the purchase deeds of the agricultural land acquired in the year 2005 had been placed on record and the said agricultural land was sold in the year under consideration, for which, a certificate from the Tehsildar, certifying that the land as sold by the assessee are located beyond 12 km from the Municipal Limit and, thus, it was not liable to be taxed as capital gain. Thus, it was argued that on merits also, the addition is wholly unjustified.

It was further argued that before the ld. CIT(A) detailed submissions about the service of notice, and also on merits of the case had been made. The ITO-Ward-3(l), who have assumed the jurisdiction by issuing a notice u/s 148 did not have valid jurisdiction to issue the notice u/s 148. It was further argued that reliance had been placed by the ld. CIT(A) on the case of 'Abhishek Jain vs. ITO', is not applicable since, that was on different facts and that judgment is not applicable at all. Identical facts of the case are in the case of ‘Sh. Manjit Singh’ of Chandigarh Bench, particularly and other judgments as cited 'supra' and, as such, the confirmation of the order of the AO by the Ld. CIT(A) was highly unjustified.

The ld. DR argued before us that the DCIT, International Taxation, Chandigarh had rightly framed the assessment on the basis of the issuance of notice by Ward-3(1) as it was found, later on, that the assessee was NRI and relied upon the order of the ld. CIT(A). The Assessee was also present at the time of hearing and he admitted that there was no fresh issue of a notice u/s 148 by the DCIT, International Taxation, Chandigarh and neither, there was a communication from the assessee regarding the transfer of case from the ITO, Ward-3(1) to the DCIT, International Taxation, Chandigarh. The ld. DR sought the confirmation of the order of the Ld. CIT(A).

We have considered the rival submissions and the order of the Assessing Officer and of the ld. CIT(A) and the paper book filed by the Counsel of assessee along with the copies of the various judgments. Facts under consideration are not disputed by both the sides in as much as, the assessee was a NRI from 2000 to 2013 and he had earlier been living in Afghanistan, but due to disturbed conditions, he came back to India under adverse circumstances, and also that there was no fresh issue of a notice u/s 148 by the Assessing Officer, International Taxation. The jurisdiction was assumed by the DCIT, International Taxation on the basis of the notice u/s 148 as issued by ITO Ward-3(l), Chandigarh. As the AO, ITO, Ward 3 (1) did not have 770-Chd-2019 – Raman Pillai Sivasankara Pillai Baltana, Punjab 11 the jurisdiction to issue the notice u/s 148, realising his mistake, on his own, he transferred the case to the DCIT, International Taxation, Chandigarh which is evident form the following observations of the AO without their being any intimation or request from the assessee:

We have also gone through the order of the ld. CIT(A). The ld. CIT(A) relied on the judgments of the Delhi High Court in the case of’ Abhishek Jain vs. ITO’ is on different facts. The case of the assessee is squarely covered on the basis of the identical facts by the judgment of Sh. Manjit Singh and Others. Findings in the case by the jurisdictional Bench of Chandigarh ITAT are quite apt which is as under:- • The DCIT vs. Shri Manieet Singh as reported in (ITAT Chd, 15.10.2024) "16. Thus, considering the above facts and in case laws, we have no hesitation in holding that since the assessment has been framed by the AO of International Tax on the basis of notice u/s 148 issued by the non-jurisdictional AO, Ward-3(4) Ludhiana, the assessment framed by the AO of International Tax is quashed."

Similarly other judgments as cited above by the Ld. Counsel of the assessee on this issue, we have no hesitation in holding that the initiation of proceedings u/s 148 by the ITO Ward-3(1), Chandigarh was bad in law. Since he had no jurisdiction to issue notice to an NRI and consequently the assessment as framed by the Assessing Officer International Taxation is also bad in law as he had proceeded on the basis of notice issued by the ITO, Ward 3 (1), Chandigarh. Thus, the assessment as framed by the Assessing Officer, International Taxation cannot be sustained. Accordingly, it deserves to be quashed.

We are fortified by the finding given in the case of Sh. Manjit Singh in and CO. No. 13/Chd/2022 wherein, the following finding has been given:

Thus, considering the above facts and in case laws, we have no hesitation in holding that since the assessment has been framed by 770-Chd-2019 – Raman Pillai Sivasankara Pillai Baltana, Punjab 14 the Assessing Officer of International Tax on the basis of notice u/s 148 issued by the non-jurisdictional Assessing Officer, Ward-3(4), Ludhiana, the assessment as framed by the Assessing Officer of International Tax is quashed.

Both the Department and the Assessee have raised certain other issues but since, we have quashed the assessment as framed by the Assessing Officer, International Tax, on the legal issue, the other grounds of appeal are not being adjudicated being academic in nature because the relief has been allowed to the assessee on legal ground.