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Income Tax Appellate Tribunal, LUCKNOW BENCH A, LUCKNOW
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA
2012-13 against impugned appellate order dated 05/01/2024 (DIN & Order No.ITBA/NFAC/S/250/2023- 24/1059394364(1) of Commissioner of Income Tax (Appeals) [“CIT(A)”] for short]. In this appeal the assessee has raised the following grounds:
“1. Because the Ld. CIT (A) has failed to know about the facts and circumstances of the case, and has arbitrarily given the decision thereof is bad in law and liable to set aside.
2. Because, the ld. CIT (A), NFAC, has without consider the reply and submissions and passed the order stated with that the appellant has failed to reply and submissions, hence it is not correct and bad in law.
3. Because, the Notice issued u/s 148 dated 31/03/2019 that is last day of six years, but the service of notice is 14/05/2019, that is after expiry of six years and service of notice u/s 148 of IT Act,1961 is beyond the time lime limit than therefore, the reopening of case is invalid and bad in law.
4. Because, the reasons recorded by the ld. ITO-1(5) and obtained approval Pr. CIT-1, at Kanpur and issued notice u/s 148 dated 31/03/2019, and income tax department transferred the PAN jurisdiction is ITO-4(3), at Kanpur dated 19/08/2019, and ld. AO-4(3), initiate proceedings in same reasons to believe priorly and passed assessment order then therefore, assessment proceeding done by ld. ITO -4(3), without using our own mind and she is prejuris of the case hence therefore the entire assessment is nullity and bad in law.
5. Because, the ld. AO-1(5), has recording the reasons u/s 147 and issuing notice 148 of the Income Tax Act is without jurisdiction bad in law then therefore, have to be annulled.
6. Because, the necessary compliance having being made in response to notices issued u/s 142(1) there was no reason to exparte.
7. Because, the AO has failed to appreciate the facts and circumstances of the case and has arbitrarily made in addition of Rs.74,76,1 80/- is bad in law.
8. Because, the ld. AO has make a penalty u/s 271(1)(b) of IT Act,1961 after compliance done within time limit through official E-mail at kanpur.ito2.1.3@incometax.gov.in dated 25/11/2019 but she was not considered the same, then therefore is bad in law.
Because, the ld. AO knowingly issued notice u/s 142(1) of IT Act, and sending through speed post and fixing the hearing date is too short after knowing the appellant belongs to more than 400 K.M's, that is bad in law and could not give proper opportunity of being heard then therefore the order passed by ld. AO is annulled.
10. Because, the ld. AO has erred the facts and in law in order passed by the AO is change of opinion hence therefore the addition made illegally.
11. Because, the notice u/s 1 48 of the Income Tax was not received by the appellant and assessment order passed by the ld. AO is invalid.”
2. The assessee has also filed revised/amended grounds of appeal, which are reproduced as under:
“1. Because the Ld. CIT(A) has failed to know about the facts; circumstances and without considering the case reply, and has arbitrarily give the decision thereof is bad in law and liable to be set aside.
2. Because the notice under section 148 of the Income Tax Act, 1961, issued by ld. ITO-1(5), Kanpur with approval obtained from ld. Pr. CIT-1, Kanpur is without jurisdiction hence it is bad in law.
3. Because the notice under section 148 of the Income Tax Act, 1961, served dated 14.05.2019 that is after expiry of six years hence it is time barred hence whole assessment order passed based on this notice is annulled.
4. Because the assessment proceeding; order passed and made such demand by the ld. ITO-4(3), Kanpur based on reasons and notice under section 148 issued by ld. ITO-1(5), Kanpur is without jurisdiction and failure of application of mind and change of opinion hence therefore the entire assessment is nullity and bad in law.
5. Because the ld. AO, has failed to appreciate reply and submissions which was filed by the Appellant during the case proceeding and imposed penalty u/s 271(1)(b) of IT Act, 1961 passed the order is clear cut violation of settled principle of law and against the principle of natural justice.
6. Because the ld. AO issued notice u/s 142(1) in the correct address of the Appellant i.e. from Kanpur to Noida through speed post and fixing the hearing date is too short when she is very well known that the distance is more than 400 K.M's, that is bad in law and failed to give proper opportunity of being heard then therefore the order passed by ld. AO is not justified by law.”
2.1 As the assessee has filed revised/amended grounds of appeal, as per paragraph (2) of this order; the original grounds of appeal, as per paragraph (1) of this order, are not being considered.
This appeal has been filed by the assessee, beyond time limit prescribed under section 253(3) of IT Act. The assessee has submitted application, duly supported by affidavit, for condonation of delay in filing of the appeal; pleading that the delay was unintentional and beyond the control of the assessee and has requested to admit the appeal for hearing. The learned Sr. Departmental Representative for Revenue did not express any objection to assessee’s application for condonation of delay in filing of the appeal. In view of the foregoing, and in specific facts and circumstances of the present appeal before us, the delay in filing of this appeal is condoned; and the appeal is admitted for hearing.
The facts of the case, in brief, are that the assessee is an individual and retired from the post of Chief Manager from LIC. The Assessing Officer passed assessment order under section 144 read with section 147 of the I.T. Act on 05/12/2019 assessing the total income of the assessee at Rs.74,76,180/- and creating a demand of Rs.29,21,980/-. Being aggrieved, the assessee carried the matter in appeal before the learned CIT(A), who has confirmed the order passed by the Assessing Officer. Now the assessee is in appeal before the Income Tax Appellate Tribunal.
5. During the course of hearing, learned Counsel for the assessee filed detailed written submissions, which are reproduced below for the ease of reference:
Written submission on behalf of Appellant Re: Nisha Fazal, at 6181, 8th Floor, Alok Vihar -II, F –6,Sector-50,Noida, Gautam Budh Nagar, Uttar Pradesh, 201301, Assessment Year: 2012-13, PAN: AACPF0740Q.
Hon’ble Members, May it please your Honours: Brief Facts and Issued Involved:
1. That the present appeal is being filed inter-alia for challenging the Order dated 05.01.2024 passed by the ld. CIT(A) under Section 250 of the Income Tax Act, 1961, vide which appeal bearing no. CIT (A) Kanpur-2/10184/2019-20 filed by the Appellant was rejected and demand of Rs.29,21,980/- was upheld against the Appellant. A copy of order dated 05.01.2024 are already been annexed herewith asAnnexure No.3of the Index to Appeal.
2. That the Appellant is also challenging the order dated 05.12.2019 passed by the ld. ITO-4(3), Kanpur, under Section 144 r.w.s.147 of the Income Tax Act, 1961, vide which demand of Rs. 29,21,980/- has been confirmed against the Appellant. A copy of order dated 05.12.2019 arealready been annexed herewith as Annexure No.6 of the Index to Appeal.
3. That the Appellant is also challenging the Demand Notice in Form – 7, dated 05.12.2019 passed by the ld. ITO-4(3), Kanpur under section 156 of the Income Tax Act, 1961. A copy of demand notice dated 05.12.2019 are already been annexed herewith as Annexure No.7 of the Index to Appeal.
4. That the appellant is individualbearing PAN No. AACPF0740Q and she has retired in the post of Chief Manager from LIC of India. Her present/permanent residential addressat 6181, 8th Floor, Alok Vihar- II, F-6, Sector-50, Noida (U.P.) -201301.
5. That the Appellant is aware of her basic legal obligations, hence she has always been making necessary compliances with good intensions during assessment as well as first appeal proceedings and is ready to do so in future but even after her compliance, the first appellate authority has passed ex-parte order which is not fair in the eyes of law.
6. That the beginning of the disputes and till date the appellant is continuously facing mental and physical problems due to divorce form her husband and other personal issues, due to which she has not able to file income tax return during the year.
7. That the dispute arises due to sale of property situated at House No. 170, Block – E, 2nd Scheme, Sujatganj, Kanpur Nagar, Sale amount of Rs.35,00,000/- instead of Rs.83,93,860/- (Market Value), dated 30.01.2012, due to which that the ld. ITO-1(5), Kanpur has recorded the reasons and issued notice u/s 148 after obtained approval of ld. Pr. CIT-1, Kanpur. Copy of sale deed are annexed herewith as Annexure No. 10.
That the case was reopened and reason recorded by the Assessing Officer -1(5), Kanpurdated 25.03.2019 after obtained approval from Pr. CIT -1, Kanpur,and issued notice u/s 148 of the Income Tax Act, 1961 dated 31.03.2019 and notice u/s 148 was served in the old address of the appellantthrough affixture on 14.05.2019 i.e. expiry of the prescribed period of the Act.A copy of reasons dated 25.03.2019 and notice under section 148 of the Income Tax Act, dated 31.03.2019 are annexed herewith as Annexure No. 11& 12.
9. That the Appellant sifted NCR reasons after sale of property and her PAN jurisdiction have been transferred to NCR and changed ITR address from A.Y. 2013-14 to till date and same was shown in the filed ITR’s. Kindly see the filed ITR in the Assessment Year 2019-20 filed on 19.08.2019 in which the address and PAN jurisdiction of the Appellant is mentioned while the reasons and notice under section 148 has been issued by the ld. ITO-1(5), Kanpur dated on 25.03.2019 and 31.03.2019 respectively is without jurisdiction. Copy of ITR Acknowledgement for Assessment Year 2019-20 are annexed herewith as Annexure No.13.Copy of ITR Acknowledgement from Assessment Year 2013-14; 2014-15; 2015-16; 2016-17; 2017-18; 2018-19 and 2020-21 are annexed herewith as Annexure No.14.
10. That during the assessment proceeding council of the appellant requested in respect of service of notice u/s 148 of the Act, as to how the notice was served to the appellant and through which mode and documentary proof regarding the service of said notice but the ld. AO till date has not been able to produce any documentary evidence in this regard.A copy of the objection dated 15.10.2019 are annexed herewith as Annexure No.15.
11. That the ld. AO simply stated through letter dated 22.10.2019 that the said notice was send through speed post bearing tracking id EU933091264IN dated 31.03.2019 hence it is prescribed time as prescribed in IT Act 1961. However, you are again given a copy of notice u/s 148 dated 31.03.2019 as documentary evidence as requested by you in your letter dated 15.10.2019.Assessee was further served notice u/s 148 by affixture on 14.05.2019 as notice issued on 31.03.2019 was returned back by the Postal Authority stating 'Not Known'. Since assessee failed to comply the notice u/s 148, assessee was issued notice u/s 142(1) dated 04.09.2019 requiring to file return of income for A.Y.2012-13 on or before 09.09.2019 at her PAN address. Assessee was also issued notice uls 142(1) dated 04.09.2019 requiring to produce documents /reply required as per Annexure - A enclosed with this notice on or before 09.09 2019 at her PAN address. Assessee did not comply to this notice on or before 09.09.2019. Thus, it is seen that notice issued u/s 142(1) is also valid and within the time prescribed in I.T. Act 1961.A copy of the Letter regarding removal of objection dated 22.10.2019 are annexed herewith as Annexure No.16.
That the reasons recorded dated 25.03.2019 and notice u/s 148 issued dated 31.03.2019 by the ld. AO-1(5) at Kanpur under the approval of Pr. CIT - (1), Kanpur but the assessment proceedings and assessment order passed by the ld. AO-4(3) at Kanpur dated 05.12.2019 under the Pr. CIT - (2), Kanpur, hence it is without jurisdiction and not maintainablein the eyes of law.
That the reasons for reopening recorded and notice under section 148 of the Income Tax Act, 1961 was issued by the ld. ITO – 1(5) and assessment order under section 144 / 147 of the Income Tax Act, 1961, which was passed by the ld. ITO – 4(3), Kanpur, is out of his / her jurisdiction, When the PAN jurisdiction was fall Ward – 1(2) Gautam Budh Nagar from Assessment Year 2014-15.Further in the assessment year 2019-20 when the notice under section 148 of the Income Tax Act, was issued, even then the Jurisdiction of this PAN was fall Ward 5(2)(3), Gautam Budh Nagar and address of the appellant was mentioned in her ITR at Gautam Budh Nagar till A.Y. 2020-21 and after that also, hence therefore all the assessment proceeding which was completed by the ld. ITO-1(5) and ITO – 4(3) Kanpur are annulled and whole assessment proceeding are without jurisdiction hence invalid. Further that the Assessment Year 2019-20, return of income tax was filed by the appellant dated 13.08.2019 i.e. after the date of reasons and notice u/s 148 of the Income Tax Act. Copy of ITR Acknowledgement for Assessment Year 2019-20 are annexed herewith as No.13.Copy of ITR Annexure Acknowledgement from Assessment Year 2013-14; 2014-15; 2015- 16; 2016-17; 2017-18; 2018-19 and 2020-21 are annexed herewith as Annexure No.14.
That during the first appeal proceeding appellant has filed complete reply and submissions annexed with relevant annexures through official e-Mail of the ld. CIT (A) -2, at Kanpur dated 24.09.2020 and same has been informed to the ld. CIT (A) (NFAC), Delhi.But without considering the reply and submission of the Appellant passed the appeal order under section 250 of the Income Tax Act, dated 05.01.2024, stated that “In view of the above,considering the fact that the appellant hasfailed to produce any documentary evidence or explanation in support of the groundsof appeals,the action of the AO is upheld and the taxation of LTCG computed at Rs.70,92,161/- is confirmed. In the result, the appeal is treated as dismissed”. Hence it is therefore not justified by law. Screen shot of e-Mail; submissions and acknowledgement copy are annexed herewith as Annexure No.15 and A copy of order dated 05.01.2024 are already been annexed herewith as Annexure No.3of the Index to Appeal.
That during the assessment proceeding, council of the appellant has filed complete reply and submissions in compliance to notice under section 142(1) of the Income Tax Act, in time to time but ld. AO failed to give complete reply to the appellant query and failed to provide complete details of the reopening and jurisdiction details she has passed the best judgement assessment order dated 05.12.2019. A copy of assessment order dated 05.12.2019 arealready been annexed herewith as Annexure No.6 of the Index to Appeal.
That the case related to Assessment Year 2012-13 and the reasons on 25.03.2019 and notice under section 148 of the Income Tax was issued on 31.03.2019by the ld. ITO-1(5), Kanpur with prior approval from ld. Pr. CIT-1, Kanpur, and made assessment and passed the assessment order by ld. ITO-4(3), Kanpur that is worked with ld. Pr. CIT-2, Kanpur with internal letter of transferred of the case based on reasons and notice dated 25.03.2019 and 31.03.2019 hence if we look at the above process carefully, then we came to know that this is nothing but a change of opinion.
17. The ld. Assessing officer thereupon assessed the Total Income of the assessee at Rs.74,76,180/- vide order dated 05.12.2019 issued u/s 144 r.w.s. 147 of the Income Tax Act, 1961.
18. The appellant being aggrieved has come up before your Honour for relief as per Ground of Appeal in respect of which our submissions are as under:
Grounds of Appeal No.2&3:
With most respectfully kindly draw your kind attention to the ITR acknowledgements from the Assessment Year 2014-15 to 2019-20, then we found that the said PAN jurisdiction under Ward - 1(2) & Ward-5(2)(3), at Gautam Budh Nagar, Uttar Pradesh.
Further in the assessment year 2019-20 returns are filed on 13.08.2019 that is after the date of reasons and issued notice under section 148 of the Income Tax Act, 1961,then we found that the PAN jurisdiction is under Ward-5(2)(3), at Gautam Budh Nagar, Uttar Pradesh, hence it is clear cut shown that the reasons recorded and notice issued under section 148 of the Income Tax Act, 1961, by the ld. ITO-1(5), Kanpur and assessment order and demand notice issued by the ld. ITO-4(3), Kanpur is without jurisdiction. In respect of this we most respectfully submitted the PAN jurisdiction history chart along with PAN address in assessment year wise as under:
Sl. A.Y. Jurisdiction Address in ITR ITR Date No. 1 2013-14 Ward-2(1)(1), 6/21, Ramesh 31.07.2013 Kanpur Nagar, New Delhi – 110015. 2 2014-15 Ward -1(2) G LIC of India, E-3, 31.07.2014 Budh Nagar Sector-1, Noida. 8th 3 2015-16 Ward-5(2)(3) G 6181, Floor, 08.08.2015 Budh Nagar. Alok Vihar II F-6, Sector-50, Noida (UP)-201301. 8th 4 2016-17 Ward-5(2)(3) G 6181, Floor, 29.07.2016 Budh Nagar. Alok Vihar II F-6, Sector-50, Noida (UP)-201301. 8th 5 2017-18 Ward-5(2)(3) G 6181, Floor, 31.07.2017 Budh Nagar. Alok Vihar II F-6, Sector-50, Noida (UP)-201301. 6 2018-19 Ward-5(2)(3) G 6/21, Ramesh 01.08.2018 Budh Nagar. Nagar, New Delhi – 110015. 7 2019-20 Ward-5(2)(3) G E-3, GB Nagar, 13.08.2019 Budh Nagar. Sector-1, Noida (UP)-201301. 8 2020-21 B-2103, 18.12.2020 Aishwaryam Apartment, Gaur
City 2, ChipyanaBuzurg, Gautam Budh Nagar (UP)- 201009.
In the above table that the PAN jurisdiction which was fall from the A.Y. 2013-14 at Kanpur Ward 2(1)(1) but the address of the appellant mentioned in the ITR at New Delhi. Further in the Assessment Year 2014-15 to 2019-20 that the PAN jurisdiction was fall Ward – 1(2), Gautam Budh Nagar and Ward - 5(2)(3), Gautam Budh Nagar and A.Y. 2019-20 return of Income was filed dated 13.08.2019, with the same ward and address of the appellant is Noida was shown. Apart from this, Appellant has been filing her return of income at her Noida address till date but reasons recorded and notice under section 148 of the Income Tax was issued dated 25.03.2019 and 31.03.2019 respectively that is prior to the date of ITR hence it is clear cut shown that the reasons recorded and notice under section 148 of the Income Tax Act, 1961 issued by the ld. ITO-1(5), Kanpur and assessment order and demand notice issued by the ld. ITO-4(3), Kanpur is without jurisdiction.Copy of ITR Acknowledgement for Assessment Year 2019-20 are annexed herewith as Annexure No.13.Copy of ITR Acknowledgement from Assessment Year 2013-14; 2014-15; 2015-16; 2016-17; 2017-18; 2018-19 and 2020-21 are annexed herewith as Annexure No.14. Further that the ld. AO has posted notice under section 148 of the Act, with wrong address to the Appellant when the Appellant has been maintaining her correct address in the income tax return continuously hence it is clear cut shown it is nothing but failure of application of mind and moreover, ld. AO affixed a notice under section 148 of the income tax act, on 14.05.2019 to a wrong address and accepted the service but during all these proceedings, not even once was an attempt made to investigate the filed income tax returns which were being filed continuously.
In this regard that the Appellant council has filed objections against issue of notice and service of notice vide his letter dated 15.10.2019; 22.10.2019 and 28.11.2019, before the ld. ITO-4(3). The objections raised are reproduced as under:
1. The notice u/s 148 is beyond the time as prescribed by the Income Tax Act.
2. That the ld. AO has failed to provide documentary evidences regarding the service of notice u/s 148 of the Income Tax Act.
That against the objections filed by the Appellant ld. ITO-2(1)(3), Kanpur has given replied dated 22.10.2019 is mentioned below:
Please refer to your letter dated 15.10.2019 submitted in my office on 15.10.2019.
Vide above letter dated 15.10.2019 it has been informed that notice issued u/s 142(1) is beyond the time limit for the relevant assessment years… It is intimated as regards to the notice issued u/s 148, that notice u/s 148 has been issued within the time prescribed by the IT Act 1961. Notice u/s 148 relates to A.Y. 2012-13, therefore it has been issued after taking approval from Competent Authority. Competent Authority has duly accorded his approval on 31.03.2019 for issuance of notice u/s 148 in this case and competent Authority is satisfied on the reasons recorded by the AO that it is a fit case for issue of notice u/s 148 of the IT Act 1961. After obtaining approval from Pr.CIT-2, Kanpur, notice u/s 148 dated 31.03.2019 was duly issued to the assessee Nisha Fazal on31.03.2019. Since the notice was issued on 31.03.2019 through Speed Post No.EU933091264IN dated 31.03.2019 hence it is within prescribed time as prescribed in IT Act1961. However you are again given a copy of notice u/s 148 dated 31.03.2019 as documentary evidence as requested by you in your letter dated 15.10.2019. Assessee was further served notice u/s 148 by affixure on 14.05.2019 as notice issued on 31.03.2019 was returned back by the Postal Authority staling 'Not Known'. Since assessee failed to comply the notice u/s 148, assessee was issued notice u/s 142(1) dated 04.09.2019 requiring to file return of income for A.Y. 2012-13 on or before 09.09.2019 at her PAN address. Assessee was also issued notice u/s 142(1) dated 04.09.2019 requiring to produce documents/reply required as per Annexure-A enclosed with this notice on or before 09.09.2019 at her PAN address. Assessee did not comply to this notice on or before 09.09.2019. Thus it is seen that notice issued u/s 142(1) is also valid and within the time prescribed in IT Act 1961:
You are requested to please provide your E-mail ID with latest address and phone no so that case may be completed / proceeded online.
In view of the above, your application is hereby disposed off. In the above reply given by the ld. ITO-Ward-2(1)(3), Kanpur and it self-stated that the approval given by the ld. Pr. CIT-2, Kanpur but if we are seen the reasons and notice under section 148 then we found that the approval was given by the ld. Pr. CIT-1, Kanpur.
In the above reply given by the ld. ITO-Ward-2(1)(3), Kanpur and it self-stated that“the notice was issued on 31.03.2019 through Speed Post No.EU933091264IN dated 31.03.2019 hence it is within prescribed time as prescribed in IT Act1961. However, you are again given a copy of notice u/s 148 dated 31.03.2019 as documentary evidence as requested by you in your letter dated 15.10.2019. Assessee was further served notice u/s 148 by affixure on 14.05.2019 as notice issued on 31.03.2019 was returned back by the Postal Authority staling 'Not Known'.”
You are requested to please provide your E-mail ID with latest address and phone no so that case may be completed / proceeded online.
In view of the above statement given by the ld. ITO-2(1)(3), Kanpur is clear cut shown that she has posted said notice with wrong address and return back then again serve the notice through affixture on 14.05.2019 with wrong address and time barred by limitation.
Further that the ld. ITO-2(1)(3), Kanpur requested to provide e-Mail ID with latest address and phone number so that assessment proceeding is going on online mode but during the course of the whole assessment proceeding she or he does not trying to see the portal of the appellant or to check the filed return status then they will found all these information in the portal of the Appellant hence all these facts and circumstances are shown noting but it is clear cut failure of Application of mind and all proceeding is going which was based on suspicion; assumption and conjuries in nature and change of opinion. A copy of the Letter regarding removal of objection dated 22.10.2019 are annexed herewith as Annexure No.16.
Copy of ITR Acknowledgement for Assessment Year 2019-20 are annexed herewith as No.13. Copy of ITR Annexure Acknowledgement from Assessment Year 2013-14; 2014-15; 2015- 16; 2016-17; 2017-18; 2018-19 and 2020-21 are annexed herewith as Annexure No.14.
In the above detailed discussion with fully supporting documents hence it is clear cut shown that the correct PAN jurisdiction of the Appellant is Ward-5(2)(3) Gautam Budh Nagat instead of ld. ITO-1(5), Kanpur or ITO-4(3), Kanpur. Hence therefore that the reasons recorded by the ld. ITO- 1(5) and assessment proceeding and assessment order passed by the ld. ITO-4(3), Kanpur is without jurisdiction hence it is liable to be quashed. And service of notice under section 148 of the Income Tax Act, is after six years hence it is time barred by the limitation under section 149 of the income tax act.
Grounds of Appeal No.4: With most respectfully inform you that the reasons for reopening recorded by the ld. ITO-1(5), Kanpur and after obtained approval under section 151 of the Income Tax Act, from ld. Pr. CIT (1), Kanpur, that the reasons for reopening is as under:
“Above assessee has sold of immovable property at Rs.35,00,000/- which is below circle rate for the year under consideration. Whereas the value adopted by Stamp Valuation Authority for the purpose of payment of Stamp Duty in this case was Rs.83,93,860/-. Due to absence of PAN, detail of the assessee and the business of the assessee could not be ascertained.
The department is in possession of information regarding sale of immovable property, which emanated from Sub-Registrar Office, Kanpur for sale of immovable property below circle rate i.e. the value adopted by the Stamp Valuation Authority for purpose of payment of stamp Duty.
3. As the information received the Sub-Registrar Office, Kanpur in which details of parties involved, nature and details of transactions are given & that information is relied by me on the basis that value was taken from sale deed by Sub-Registrar Office, Kanpur.
4. The issue has been examined by the undersigned in the light of section 50C(1) of the IT Act 1961 as well as system. No details found. It is also noticed that the actual sale consideration or value adopted by the Stamp Valuation Authority for the Purpose of payment of Stamp Duty, whichever is higher, is to be deemed as full value of consideration received or accruing as a result of such transfer. In spite of above-mentioned examination, for the sake of natural justice a verification letter to assessee was also issued to clarify the aspect of the LTCG arisen on sale of above- mentioned property. Till date no reply has been submitted by the assessee. 5. As mentioned below as para 6. 6. Thus, I have reason to believe that difference of sale consideration and the value adopted by the Stamp Valuation Authority for the purpose of Stamp Duty amounting to Rs.48,93,860/- (Rs.83,93,860/- - Rs.35,00,000/-) under the head Capital Gain has escaped assessment for the A.Y. 2012-13 within the meaning of provision of section 147 reasd with section 50C of the Income Tax Act, 1961. 7. In this case no return of income was filed for the year under consideration accordingly, in this case, no assessment was made
and the only requirement to initiate proceedings u/s 147 is reason to believe which has been recorded above (refer paragraphs 6). It is pertinent to mention here that in this case the assessee has chosen not to file return of income for the year under consideration although the total income of the assessee had exceeded the maximum amount which is not chargeable to tax as discussed in paragraph 6 above and the assessee was assessable under the Act. In view of the above, the provisions of clause (a) of Explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment.
In this case more than 4 years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s 148 has been obtained separately from Ld. Pr. Commissioner of Income Tax-1, Kanpur as per the provisions of section 151 of the Act.
Dated: 25.03.2019 (S.K. Singh) Income Tax Officer-1(5) Kanpur” A copy of reasons dated 25.03.2019 are annexed herewith as Annexure No.
That the Appellant council has filed objections against issue of notice vide his letter dated 15.10.2019; 22.10.2019 and 28.11.2019. The objections raised are reproduced as under: 3. That the reasons of reopening and notice under section 148 of the Income Tax Act, issued by the ld. ITO-1(5), Kanpur with the approval under section 151 of the Income Tax Act, and assessment proceeding and order was passed under section 144 / 147 of the Income Tax Act, is beyond the jurisdiction.
4. That the reason recorded by the ITO-1(5) with the approval of ld. Pr. CIT-1, Kanpur but the whole reassessment proceedings and assessment order passed by the ld. ITO-4(3), Kanpur is without jurisdiction and without application of mind.
That the ld. ITO-4(3), Kanpur has replied dated 22.10.2019 in respect of application filed dated 15.10.2019 that the approval under section 151 of the Income Tax Act, given by theld. Pr. CIT-2, Kanpur but in the reason mentioned approval was given by the ld. Pr. CIT-1, Kanpur, hence therefore it is totally different from supporting documents.
6. That in the copy of sale deed / registry, AppellantPAN details are available but, in the reasons,ld. AO, stated PAN details was not found hence it is clear shown the ld. AO has recorded the reason without application of mind.
7. To initiate re-assessment proceedings, two conditions must be fulfilled – a) There must be reason recorded by the AO with application of mind. b) That the such escapement has occurred by reason of failure on part of the assessment to disclose fully or truly all material facts necessary for his assessment of that year with collaborative evidences. That the ld. ITO-1(5), has been recorded reasons and notice under section 148 of the income tax act, and ld. ITO-4(3), Kanpur, has been disposed of the assessment proceeding; passed the assessment order and issued notice of demand under section 156 of the income tax act, instead of jurisdictional Assessing Officer that is ld. ITO- Ward-5(2)(3), Gautam Budh Nagar hence all proceeding which was made by these two officer are without jurisdiction and there are multiple opinions are made by these two Assessing Officers are clear cut showing change of opinion this is not justified by law.
In support of the above facts and circumstances kindly refer to Hon’ble Jurisdictional ITAT judgement and same has been upheld by the Hon’ble Allahabad High Court in the case of Pr. Commissioner of Income Tax-II, Lucknow Vs. Mohd. Rizwan Prop. M/s M.R. Garments at Lucknow Hon’ble jurisdictional Allahabad High Court, Lucknow Bench dated 31th Day of March, 2017:
4. In these circumstances, Tribunal has held that since very notice under Section 148 of Act, 1961 was illegal, as the notice issuing authority had no jurisdiction, entire subsequent proceedings conducted by transferee Assessing Officer (hereinafter referred to as "A.O.") who had jurisdiction but not chosen to issue fresh notice under Section 148 of Act, 1961, are illegal.
We, therefore, find that all the aforesaid questions formulated above can be considered together for the reason that principal issue engaging attention of this Court in this case is "if a notice under Section 148 of Act, 1961 was issued by incompetent Officer, i.e., one who has no jurisdiction, mere fact that subsequently on the objection of Assessee with regard to jurisdiction, matter is transferred to another A.O., can a valid assessment be made by him without issuing a fresh notice under Section 148 of Act, 1961?"
For A.Y. 2010-11, Income Tax Department received AIR information from Punjab National Bank, Lucknow (hereinafter referred to as "PNB") stating that Assessee has deposited cash of Rs. 70,19,000/- in Financial Year (hereinafter referred to as "F.Y.") 2009-10 in his bank account. In order to verify source of deposit, a non-statutory notice dated 25.08.2011 was issued by ITO-IV(1), Lucknow requiring Assessee to file details. Shri R.U. Khan, Advocate appeared and filed reply but details were insufficient. Consequently, after recording reasons for initiating proceedings under Section 147 of Act, 1961, a notice under Section 148 of Act, 1961 was issued and served upon Assessee through speed post on 18.11.2011. He was required to file Return of Income for the relevant year. Since Assessee failed to comply with said notice, ITO-IV(1), Lucknow proposed to pass order under Section 144 of Act, 1961 on the basis of material available on record.
11. Case was thereafter transferred to ITO-V(2), Range-V, Lucknow by designated A.O. on 11.04.2012 for the reason that jurisdiction of the case of Assessee was with said Officer and not with ITO-IV(1), Range-IV, Lucknow.
12. Shri K.S. Rastogi, another Advocate, appeared on behalf of Assessee before jurisdictional A.O., and filed acknowledgment of Income Tax Return declaring income of Rs. 2,18,610/- but could not explain deposit of cash of Rs. 70,19,000/- in Saving Bank Account.
The sole ground found favour with Tribunal is that notice under Section 148 of Act, 1961 was issued by ITO-IV(1), Lucknow who had no jurisdiction in the matter and after transfer of case, ITO-V(2) who had jurisdiction in the matter, proceeded to make assessment without issuing notice under Section 148 of Act, 1961 which was mandatory, being a jurisdictional step. Earlier notice issued by an authority having no jurisdiction would vitiate the entire proceedings as said notice issued by an incompetent Authority will not be a valid notice under Section 148 of Act, 1961.
Learned counsel appearing for Assessee contended that relevant A.Y. is 2010-11 which ended on 31.03.2010. Even if, no Return is filed within time specified under Section 139(1) of Act, 1961, still Assessee could have filed Return under Section 139(4) of Act, 1961 upto 31.03.2012, i.e., before expiry of one year from the end of relevant A.Y. Return was actually filed by Assessee on 17.02.2012, hence it was within the ambit of Section 139(4) of Act, 1961. Though, there was sufficient time to file Return and even time for issue of notice under Sections 142(1) and 143(2) of Act, 1961 making assessment under Section 143(3) of Act, 1961 was subsisting, a notice under Section 148 of Act, 1961 was issued through speed post on 18.11.2011 by ITO-IV(1), Lucknow who had no jurisdiction over Assessee. It shows that Section 148 of Act, 1961 was invoked as if it is a substitute of Section 142 of Act, 1961 which is misconceived and incorrect. Apparent reason for initiating reassessment proceedings under Section 148 of Act, 1961 is AIR information received from PNB showing cash deposit of Rs. 70,19,000/- in Assessee's Saving Bank Account. Since notice under Section 148 of Act, 1961 dated 18.11.2011 was void having been issued by an Officer having no jurisdiction, further notice issued under Section 143(2) of Act, 1961 by same Officer on 17.02.2012 is also void, ab initio and illegal.
Looking into the scheme of procedure for assessment as briefly discussed above, we find that, in the present case, dispute relates to A.Y. 2010-10 (F.Y. 2009-10, i.e., 01.04.2009 to 31.03.2010). Time to file Return of income under Section 139(4) was obviously available to Assesseeupto 31.03.2012. It is also not disputed that return was actually filed by Assessee on 17.02.2012. In these circumstances, we do not find any occasion on the part of Revenue to have served a notice under Section 148 of Act, 1961 upon Assessee on 18.11.2011 inasmuch as neither assessment was made till date nor there was any occasion to assume that there was any escapement of income from assessment. This entire exercise of reassessment commencing from notice dated 18.11.2011, in our view, and even otherwise, was illegal.
Now we come to legality of notice issued under Section 148. Admittedly, it was issued by a Designated Officer authorized to receive AIR information and make inquiry. Thereafter, said Designated Officer was supposed to furnish entire material to Competent A.O. for further action.
In the present case, notice under Section 148 was not issued by A.O. having jurisdiction over Assessee and instead it was issued by Designated Officer authorized to collect AIR information and make inquiry in this regard. No notice was issued under Section 148 admittedly by Jurisdictional A.O.
Section 148 clearly talks of issue of notice by A.O. Meaning thereby, A.O. having jurisdiction over Assessee. In fact, it is his satisfaction which is to be recorded for justifying reopening of assessment/reassessment proceedings as contemplated under Section 147 and recording of reasons for the same purpose is mandatory. The satisfaction of A.O. could not have been hired or be delegated to any other authority.
In Y. Narayana Chetty and another Vs. Income Tax Officer, Nellore and others 1959 (35) ITR 388 (SC), it was held, that, if notice issued is invalid or not properly served, any proceeding taken by A.O. to back assess, would be illegal and void.
A Constitution Bench, in Sardar Baldev Singh Vs. Commissioner of Income Tax, Delhi (1960) 40 ITR 605 (SC), a parimateria provision, i.e., Section 34 under old Indian Income Tax Act, 1922 (hereinafter referred to as "Act, 1922") was considered and it was held that A.O. having power to issue notice should be a particular A.O. having jurisdiction over Assessee at the time of issue of requisite notice. If notice issued by any other A.O. or notice is bad for any reason, than such back assessment would be illegal.
We, therefore, hold that in the present case, no valid notice under Section 148 was issued by Jurisdictional A.O. before making assessment/reassessment and, therefore, proceedings of reassessment pursuant to notice issued under Section 148 by an incompetent Officer are void and ab initio.
When a notice under Section 147/148 issued is a jurisdictional step, it cannot be treated to be mere irregularity curable under Section 292BB. In fact, Section 292BB has no application to a case where no valid notice has been issued by Competent A.O. This is clear from a bare reading of Section 292BB of Act, 1961 which reads as under:-
292BB. Where an assessee has appeared in any proceedings or co- operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was- (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.
The curability permitted under Section 292BB is with regard to service of notice upon Assessee and not with regard to competence of authority who has issued notice.
Similar is the view taken by a Full Bench of this Court in Laxmi Narain Anand Prakash Vs. Commissioner of Sales Tax, Lucknow AIR 1980 ALL 198.
In view of above discussion, we have no manner of doubt to answer all the four questions against Revenue and in favour of Assessee. Therefore, appeal lacks merit. Dismissed.
In the above facts and circumstances of the case reason recorded by the ITO-1(5), Kanpur and assessment order passed by the ITO-4(3), Kanpur on the basis of reasons recorded by the ITO-1(5) that was not under the jurisdiction that means ITO-1(5), Kanpur and case was transferred the ITO-4(3) and she has passed the assessment order without applying own mind, hence therefore the order passed by the ITO-4(3) is not justified by law, then therefore the whole assessment is invalid.A copy of case law is annexed herewith as Annexure No. 17.
In the case of PankajbhaiJaysukhlal Shah Vs. ACIT Hon’ble Gujrat High Court:
147/148/292B: The officer recording the reasons u/s 148(2) for reopening the assessment & the officer issuing notice u/s 148(1) has to be the same person. If the reasons are recorded by the DCIT but the notice is issued by the ITO, the reassessment proceedings are invalid.A copy of case law is annexed herewith as Annexure No. 18.
Hon’ble ITAT Delhi in the case of Swati Verma vs. ITO, Ward – 3(4), Noida on 1st August, 2018:
Since the A.O. did not apply his mind to the information and that A.O. did not record in the reasons that he has reason to believe that income chargeable to tax has escaped assessment, therefore, A.O. recorded incorrect and non-existing reasons for reopening of the assessment in the matter. Thus, the A.O. without any justification has assumed the jurisdiction under section 147/148 of the I.T. Act which is bad in law and is liable to be set aside. In view of the facts of the case and discussion above in the light of judgments relied upon above, I am of the view that the A.O. has no justification to assume jurisdiction under section 147 of the I.T. Act as per law. Accordingly, I set aside the orders of the authorities below and quash the reopening of the assessment under section 147 of the I.T. Act.A copy of case law is annexed herewith as Annexure No.19.
That theld. ITO-1(5) stated in Para 1 in the reasonsthat the PAN of the Appellant could not be ascertained whereas the PAN is in the sale deed; apart from this it is said by the ld. ITO-4(3), that reopening assessment proceeding is going on after approval of ld. Pr. CIT-2, Kanpur whereas the approval was granted by the ld. Pr. CIT-1, Kanpur, what is the reason when the Reasons of Reopening and notice under section 148 was issued by ld. ITO-1(5) and why by the internal order the case was transferred in the mid of the proceeding to ld. ITO-4(3) and assessment was done and assessment order was passed by the ld. ITO-4(3), Kanpur but neither of them even check where the actual jurisdiction of the PAN is, since it is mandatory to do all this before recording the reasons and it seems that the person who was doing the assessment would not have even thought all this; similarly, when the council raced some query regarding proof of service of notice under section 148 of the Act, then no proper answer was received; and moreover, the Appellant was asked by ld. ITO-Ward-2(1)(3), Kanpur.
In the above para shown the highly conflictionbetween each other and recorded the reason and assessment order passed is without application of mind and clear cut shown change of opinion.
Kindly refer to section 285 BA(d) of the Income Tax Act, 1961 read with Rule 114DB the information have been received as per the specified time limit that is end of financial year but the ld. ITO-1(5) recorded the reasons and issued notice u/s 148 is last month of the sixth assessment years that is reasons recorded by the ld. ITO-1(5) is without application of mind and in absence of collaborative evidences to proving the such escapement hence it is nothing but it is change of the opinion hence therefore it is not justified by law.
In support of the above facts and circumstances kindly refer to Hon’ble Supreme Court judgement in the case ofCommissioner of Income Tax, Delhi Vs. M/s Kelvinator of India Limited with Civil Appeal No. 2520 of 2008:
A number of representations were received against the omission of the words `reason to believe' from Section 147 and their substitution by the `opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, `reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression `has reason to believe' in place of the words `for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same.
" For the afore-stated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs. A copy of case law is annexed herewith as Annexure No. 20. Grounds of Appeal No.5 &6:
That the Council of the Appellant has regularly filed reply and submission in time to time in response to notice under section 142(1), of the Income Tax Act, but ld. AO has been passed best judgement assessment order is not justified by law. Further when the ld. AO came to know that the appellant was located at Gautam Budh Nagar (Noida) at distance of 400 Kilometres, then she was given only 4 to 5 days,time to file reply and the notice was also send through speed post due to which notice was received after the expiry of date of hearing or before 1 to 2 daysprior to the case hearing. In the above discussion that the best judgement assessment order and penalty order passed by the ld. ITO-4(3), Kanpur is clear cut violation of Principle of Natural Justice. Grounds of Appeal No.7: General and Routine in Nature.
Prayer Itis, therefore, mostrespectfullyprayedthatthisHon’bleBenchmaygraciouslybepleasedt o:
1. 1. In view of the aboveundisputed facts and circumstances of the case the reasons recorded and notice u/s 148 of the Act, by ld. ITO-1(5) is without jurisdiction hence it is invalid.
2. Quashed the order u/s 250 passed by the ld. CIT(A) dated 05.01.2024.
3. Quashed the order u/s 144 / 147 passed by the ld. ITO-4(3), Kanpur dated 05.12.2019.
4. Deleted the demand u/s 156 dated 05.12.2019.
5. Issue any direction may deem fit and proper in the facts and circumstances of the case.
5.1 The learned Counsel for the assessee also filed copy of orders of Delhi Bench of ITAT (order dated 12/09/2025 in the case of Nafees Ahmad vs. ITO in for assessment year 2017-18) and placed reliance on the same at the time of hearing before us. At the time of hearing before us, the learned Counsel for the assessee submitted that the case was reopened and reasons recorded by the Income Tax Officer-1(5), Kanpur dated 25/03/2019 under the jurisdiction of Pr. CIT-1, Kanpur and notice under section 148 of the I.T. Act dated 31/03/2019 was issued on last day of prescribed limitation period. He also submitted that although the reasons were recorded and the notice under section 148 was issued by the Income Tax Officer-1(5), Kanpur on 31/03/2019 under the jurisdiction of Pr.CIT-1, Kanpur; but the assessment order has been passed by the Income Tax Officer-4(3), Kanpur on 05/12/2019 under the jurisdiction of Pr.CIT -2, Kanpur. He further submitted that neither Income Tax Officer-1(5), Kanpur nor Income Tax Officer-4(3), Kanpur had jurisdiction over the assessee. He also submitted that the jurisdiction of the assessee was with Ward-5(2)(3), Gautam Budh Nagar, as per PAN database; and address of the assessee was also mentioned in her return at Gautam Budh Nagar till assessment year 2020-21. He submitted that, therefore, reassessment proceedings initiated by an officer without jurisdiction over the assessee; was void ab initio; and both notices under section 148 read with section 147 of the I.T. Act as well as the assessment order should, therefore, be quashed. He also submitted that the assessee had no information whether the jurisdiction of the assessee was transferred from Gautam Budh Nagar to Kanpur, because the mandatory notice under section 127(1) of the I. T. Act was not issued to the assessee. Learned Departmental Representative supported the orders of the authorities below. Learned Departmental Representative also drew out attention to a report dated 31/01/2025 of Income Tax Officer-2(1)(1), Kanpur, which is reproduced below for the ease of reference:
5.3 Under para 2 of the above letter, Revenue has mentioned that at the time of issuance of notice under section 148 of the Act, PAN of the aforesaid assessee was not available therefore, due to absence of PAN, detail of the assessee and the business of the assessee could not be ascertained. This explanation of Revenue is not acceptable. It is also not the case of Revenue that any order was passed by competent authority under section 127 of the I. T. Act, transferring the jurisdiction of the assessee from Gautam Budh Nagar to Kanpur. When the jurisdiction of PAN was with Ward-5(2)(3), Gautam Budh Nagar and address of the assessee was also mentioned in her income tax return at Gautam Budh Nagar, the assessment proceedings which were completed by the Income Tax Officer-1(5) and Income Tax Officer-4(4), Kanpur are without jurisdiction. Hence, the reasons recorded and notice issued under section 148 of the I.T. Act by Income Tax Officer- 1(5), Kanpur and assessment order passed by Income Tax Officer-5(3), Kanpur are without jurisdiction and both deserve to be quashed. In coming to this conclusion, strength is drawn from order dated 12/09/2025 of Delhi Bench of ITAT in for assessment year 2017-18 in the case of Nafees Ahmad vs. Income Tax Officer; relevant portion of which is reproduced below:
6. In view of the foregoing, the notice under section 148 of the Act is quashed and assessment order is annulled. Since notice under section 148 is quashed and assessment order is annulled;p the other grounds of appeal on merits of the addition have become academic; hence not decided.
In the result, the appeal of the assessee stands allowed for statistical purposes.
(Order was pronounced in the open court on 04/12/2025)
Sd/. Sd/. (ANADEE NATH MISSHRA) ( SUBHASH MALGURIA ) Accountant Member Judicial Member Dated:04ss/12/2025 *Singh Copy of the order forwarded to :
1. 1. The Appellant 2. The Respondent.
3. Concerned CIT 4. D.R., I.T.A.T.