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Facts
The assessee filed an appeal against the CIT(A)'s order dismissing their appeal. The original assessment was framed under Section 147/143(3) of the Income Tax Act for AY 2011-12. The primary issue revolves around the jurisdiction of the Assessing Officer (AO) who issued the notice and completed the assessment.
Held
The Tribunal held that the notice issued under Section 148 of the Income Tax Act was by a non-jurisdictional AO, rendering the assessment order and subsequent proceedings invalid. The Tribunal condoned the delay in filing the appeal due to the assessee's circumstances.
Key Issues
Whether the assessment order is valid when the notice under Section 148 was issued by a non-jurisdictional AO and whether the delay in filing the appeal should be condoned.
Sections Cited
147, 143(3), 148, 127, 144, 133(6), 151, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC’’ JAIPUR
fu/kZkj.ko"kZ@AssessmentYears : 2011-12 Smt.Tasleem Bano cuke The ITO, K-3495/6, Mithi Kothi ka Rasta, Surajpole Vs. Ward-5 (4) Jaipur 302 003 Jaipur LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: AOIPB 7555D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :Ms. Apeksha Kalra, Advocate jktLo dh vksjls@Revenue by : Shri Gautam Singh Choudhary, JCIT -DR a lquokbZ dh rkjh[k@Date of Hearing : 06/05/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 23 / 06 /2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
The assessee has filed an appeal against the order of the learned National Faceless Appeal Centre, Delhi [ for short CIT(A)] dated 11-05-2023 for the assessment years 2011-12 in the matter of an assessment made as per provision of section 147/143(3) of the Income Tax Act, 1961 [ for short Act ]and thus raising therein following grounds of appeal.
‘’1. On the facts and circumstances of the case the reason to belief has been framed and notice u/s 148 issued by the Ld. ITO-Ward-5(1) and later the case was transferred to ITO-Ward-5(4). The jurisdictional AO was ITO, Ward-5(2) Jaipur. In accordance to settled law, the reasons to be framed only by jurisdictional assessing officer and not by any other assessing officer and issuance of notice u/s 148 of the Act is mandatorily to be issued by jurisdictional A.O. Thus, the notice issued by the Ld. AO and the assessment proceedings concluded thereafter by the Ld. AO was illegal and non-curable u/s-292BB of the Income Tax Act, 1961 and therefore, the Assessment Order dated 03.10.2018 deserves to be set aside and quashed 2. Without prejudice to the GOA 1, in the facts and circumstances of the case no order u/s 127 of the Act for transfer of jurisdiction in the instant case was passed as the Notice u/s148 was issued by the Ld. ITO 5(1), Jaipur and afterwards the Assessment Order and its proceedings were conducted by the Ld. ITO 5(4), Jaipur and thereby the assessment order dated 03.10.2018 deserves to be set aside and quashed 3. Without prejudice tothe GOA-1 & 2, on the facts and circumstances of the case reopening of assessment was bad in law w.r.t.sechon 147 of the IT Act. The Ld. AO has reopened the case on the basis of reason tosuspect and the Hon'ble CIT has given the approval mechanically without analyzing the same. Thus, the proceedings initiated by the ld. AO and the assessment concluded thereafter was illegal and void ab initio and not a curable defect u/s 292BB therefore, the Order u/s 147 read with section 144 dated 03.10.2018 deserves to be set aside and quashed 4. Without prejudice to the GOA No 1 to 3, the Ld. A.O. concluded the ex parte assessment without appreciating the facts of the case. The Ld A.O. concluded the assessment without providing the reasonable opportunity of being heard and the Ld. AO has grosslyerred in making addition of Rs 14,17,300/- to the returned income of the assessee as unexplained income. The action taken by the Ld. AO was illegal and therefore liable to be quashed or set aside.
5. The assessee reserves the right to add, alter, amend, modified or delete of the any grounds of appeals before or at the time of hearing.
2.1 At the outset of hearing of the appeal of the assessee, the Bench noted that there is delay of 558 days in filing the appeal by the assessee for which the assessee has filed an application dated 21-02-2025 for condonation of delay narrating therein following reasoning:- ‘’1. That the appellant has filed the present appeal before the Hon’ble ITAT, Jaipur against the order dated 11-05-2023 passed by the CIT(A), NFAC, Delhi under section 250 of the Income Tax Act, 1961 pertaining to the assessment year 2011-12.
That the said order came to the appellant’s knowledge on 01-10-2025 and the statutory period for filing the appeal before the Hon’ble Tribunal expired on 10- 07-2023. However, the appeal has been filed on 8-02-2025,resulting in a day of 558days.
3. That the delay in filing the present appeal was neither intentional nor due to any negligence on the part of the appellant but was caused due toto bona fide reasons and unavoidable circumstances, which are explained as under: a) Lack of Awareness & Procedural Delays: The Ld. CIT(A) issued all the notices online, but the same were never received on the email ID provided in Form 35 and no physical notices were received. The appellant, being a homemaker with education only up to the 6th standard, was unaware of the developments, thereby causing an unintentional delay in responding and filing the appeal. b) Husband's NRI Status & Late Awareness of Appeal Finalization: The appellant's husband is an NRI residing in Italy. The status of the appeal finalization only came to her notice when her husband visited India on 01/01/2025 and inquired about the case. Upon learning about the developments on that day itself, immediate steps were taken to file the present appeal.
That in support of the present application, reliance is placed on the judgment of the Hon'ble Madras High Court in W.P. No. 35453 of 2023 and W.M.P. 35420 (Jak Communications Private Limited Vs. The Dy. Commercial Tax Officer dated 19/12/2023), wherein in an identical case concerning the online issuance of notices, the court has held that physical notices must be issued to ensure due process. Consequently, the delay in such cases has been condoned, reinforcing the principle that procedural lapses should not result in the denial of substantive justice.
That the Hon'ble Supreme Court and various High Courts have time and again held that the expression 'sufficient cause in matters of condonation of delay should receive a liberal interpretation so as to advance substantial justice.
That the delay in filing the present appeal is neither willful nor deliberate, and the appellant had no mala fide intention to disregard the statutory timelines. The appellant has a strong case on merits and would suffer irreparable loss and grave injustice if the delay is not condoned.
That in the interest of justice, equity, and fair play, the Hon'ble Tribunal may kindly condone the delay of 558 days in filing the appeal and admit the same for adjudication on merits. PRAYER: In view of the aforesaid facts and circumstances, it is humbly prayed that the Hon'ble Tribunal may be pleased to: a) Condone the delay of 558 days in filing the appeal in . b) Admit the appeal and adjudicate the same on merits in the interest of justice. c) Pass such other order(s) as may be deemed fit and proper in the facts and circumstances of the case.
2.2. While hearing, the ld. DR objected to assessee’s applications for condonation of such inordinate delays and prayed that Court may decide the issue as deemed fit and proper in the interest of justice.
2.3 We have heard both the parties and perused the materials available on record. As stated by the assessee that in this case all the notices were given online, but the same were never received on the email ID provided in Form 35 and no physical notices were received. The appellant, being a homemaker with education only up to the 6th standard, was unaware of the developments, thereby causing an unintentional delay in responding and filing the appeal. Even the husband of the assessee is an NRI residing in Italy. The status of the appeal finalization only came to her notice when her husband visited India on 01/01/2025 and inquired about the case. Upon learning about the developments on that day itself, immediate steps were taken to file the present appeal. Thus, the bench noted that the reasons as advanced by the assessee for condonation of delay in respect of the above mentioned appeal has sufficient reasons to condone the delay which has merit. Thus, we concur with the submission of the assessee and condone the delay so made in filing the appeal by the assessee in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee was prevented by sufficient cause.
3.1 Apropos grounds of appeal of the assessee, it is noticed that the ld. CIT(A) has dismissed the appeal of the assessee on the ground of non- pursuance of the appeal and merit also. The narration so made by the ld.CIT(A) in his order is reproduced as under:-
‘’In view of the above, it appears that the non-appearance to notices is deliberate as all the notices have been duly served upon the appellant on the registered email account. No response has been received from the appellant till date. It is reasonable to infer from the continued non-compliance that the appellant is not serious to pursue its appeal. Hon'ble Supreme Court in the case of CIT vs. B.N. Bhattacharjee and Another, 118 ITR 461(SC) observed that preferring an appeal means more than formally filing it but effectively prosecuting it. Hon'ble M.P. High Court in the case of Estate of Late Tukojirao Holkar vs. CWT, (1997) (223 ITR 480) (M.P.) dismissed the reference in default and for not taking necessary steps. Similar view has been taken by I.T.A.T. Delhi Bench in the case of CIT Vs. Multiplan India (P) Ltd. (1991) (38 ITD 320). Considering the above, it appears that the appellant is not interested in pursuing its appeal. Therefore, the appeal filed by the appellant is dismissed for non-pursuasion. 5.2. On merits: Ground No. 1: This ground is related to reopening of assessment. After verification of the details available with the Department, it was noticed that the appellant has deposited total cash of Rs 14,17,300/- in his bank account No. 61078011327 maintained with State Bank of India (Earlier SBBJ) during the period FY 2010-11 relevant to A.Y 2011-12. Hence, case was reopened u/s. 147 of the Act. Notice u/s. 148 of the Act was issued as the AO has reason to believe that there is a income to the tune of Rs. 14,17,300/-has escaped assessment. The AO has correctly invoke the provisions u/s. 147 by issuing notice u/s. 148 dated 28-03- 2018. Ground No. 1 is dismissed. Ground No. 2: This ground is related to opportunity of being heard not given to the appellant The appellant was issued notice u/s. 148 on 28-03-2018. There is no compliance to this notice. Notice u/s. 142(1) along with questionnaire dated 19-07-2018 was issued by registered post. It was undelivered with a remark 'refused'. It shows that the appellant was available at the address but refused to take the notice. Again notice u/s. 142(1) dated 13-07-2018 was issued and served by registered post. Another show case notice dated 25-09-2019 asking the appellant to explain as to why assessment cannot be completed ex-parte was issued. There is no reply from the appellant even to this notice. Thus, the AO has given sufficient opportunity to the appellant to represent his case. Therefore, there is no force in the ground saying that opportunity of being heard was not granted to the appellant. Ground No. 2 is dismissed.
Ground No. 3: This ground is general in nature and hence, does not require any separate adjudication. The appellant has not filed any ground regarding the addition of cash deposit of Rs. 14,17,300/-. Therefore, the issue of addition of cash deposit treating as unexplained is not adjudicated 6. In the result, the appeal is dismissed.’’ 3.2 During the course of hearing, the ld.AR of the assessee submitted that lower authorities are not justified in confirming addition of Rs.14,17,300/- in the hands of the assessee. The main thrust of the ld AR of the assessee is that impugned notice u/s 148 under the Act was issued by the AO, Ward 5(1), Jaipur which was without jurisdiction over the assessee and it was further accepted and authenticated by the Department itself by way of transfer of the case from Ward 5(1) to Ward 5(4) despite the fact that the jurisdictional AO in the present case was 5(2),Jaipur and thus it is invalid notice in the eye of law and assessment order passed by the AO,Ward 5(4), Jaipur pursuant to such notice is void ab-initio.
3.3 On the other hand, the ld.DR supported the orders of the ld. CIT(A)and also filed a report of the ld. AO which reads as follows:
‘’Kindly refer to the above mentioned subject. The required information /report is as under:-
Brief facts of the case are as under:-
1. The assessee is an individual and during the your under consideration assesse has cash deposited of Rs. 300000 in her bank account and not filed return of income for the concerned AY 2. Thereafter notice u/s 133(6) dated 07.03.2018 was issued to the assessee with the prior approval of the worthy Pr. CIT-2, Jaipur but no compliance was made. 3. As per record, it is found that assesser has not filed return of income for the AY 2011-12 and per ITS details, assessee has cash deposited of Rs. 3,00,000 her bank account. Thus the AO i.e. ITO Ward 5(1), Japur had reason to believe that income of Rs.3,00,000/- escaped assessment within the meaning of Section 147 of the IT Act. Accordingly, notice u/s 148 of the IT Act was issued by the AO vide dated 28-03-2018 within the prior approval of the worthy Pr. CIT-2, Jaipur. Thereafter, as per jurisdiction, this case was transferred to the ITO,Ward 5(4), Jaipur and the assessment order was passed in this case vide dated 03-10-2018 u/s 147/144 of the Act. The detailed report is as under
In this case, as per PAN jurisdiction, the Income Tax Officer, Wand-5(1), Jaipur was the AO. After issuance of notice u/s 148 of the IT Act this case was transferred to the Income Tax Officer, Ward-5(4), Jaipur as per jurisdiction and further proceedings were completed by the jurisdictional AO i.e. Income Tax Officer, Ward-5(4), Jaipur. Thereafter, the Income Tax Officer, Ward-5(4), Jaipur was merged with the Income Tax Officer, Ward-5(2), Jaipur and all the PANs and records were transferred accordingly. The present AO in this case is the Income Tax Officer, Ward-5(2), Jaipur. Further, it is important to be mentioned here that PAN: AOIPB7555D was allotted to the assessee on 11.01.2008 under the jurisdiction of the Income Tax Officer, Ward-5(1), Jaipur. Thereafter this PAN was transferred to the Income Tax Officer, Ward-5(4), Jaipur on 06.07.2018 and to the Income Tax Officer, Ward-5(2), Jaipur on 03.10.2020 2. In this case notice u/s 148 of the IT Act was issued vide dated 28.03.2018 by the AO in the Income Taxs Officer, Ward-5(1), Jaipur and then this case was transferred as per jurisdiction to the Income Tax Officer, Ward- 5(4), Jaipur. It is worthy to mention here that the Income Tax Officer, Wand-5(1), Jaipur and the Income Tax Officer, Ward-5(4), Jaipur were under the Addl /Joint Commissioner of Income Tax, Range-5, Jaipur and the Pr. Commissioner of Income Tax-2, Jaipur. Therefore, the order u/s 127 of the IT Act was not required to be passed in this case as the transfer of PAN was within range. "Section 127 of the IT Act empowers the PCIT/CIT to transfer cases from one AO to another. This can be done after giving the assessee an opportunity of being heard in most cases, except in certain situations where the transfer is within the same city, locality or place.’’ In this case, the transfer of PAN was within the jurisdiction of same Range and same PCIT and within the same city. Therefore, the order u/s 127 of the IT Act was not required to be passed.
In this case, notice u/s 133(6) dated 07.03.2018 was issued to the assessee with the prior approval of the worthy PCIT-2, Jaipur but no compliance was made. Then, the AO had recorded reason to believe that income of Rs. 3,00,000/- escaped assessment within the meaning of section 147 of the IT Act. The reasons were recommended by the JCIT, Range-5, Jaipur and the worthy PCIT-2, Jaipur was satisfied that this case was fit for initiating proceedings us 147 and issue of notice u/s 148 of the IT Act. Accordingly notice u/s 148 of the IT Act was issued by the AO vide dated 28.03.2018 with the prior approval of the worthy Pt. CIT-2, Jaipur 4 The proceedings was completed by the jurisdictional AO i.e. the Income Tax Officer Ward-5(4), Jaipur after giving plenty of opportunities of being heard to the assessee. As the matter was time barring, the Ld. AO has passed the assessment order vide order dated 03.10.2018. Submitted for kind perusal and necessary action With regards ITO, Ward 5(2), Jaipur’’ 3.4 We have heard both the parties and perused the materials available on record. In this case, it is noticed that the AO, Ward 5(4), Jaipur made an addition of Rs.14,17,300/- in the hands of the assessee on the basis of materials available on record before him. The ld. CIT(A) has confirmed the action of the ld. AO as mentioned hereinabove. The issue in this case is that the assessment made by the AO ward 5(4) is valid or not. From the facts of the case, it is noted that the notice u/s 148 of the Act was issued by the AO ward 5(1), Jaipur and the ‘’reasons to believe’’ had been framed by him only which was not a jurisdictional AO. However, subsequent assessment proceedings were completed by the AO ward 5(4), Jaipur vide assessment order dated 03-10-2018. Actually, in the present case, the Jurisdictional AO is 5(2) who was to initiate the proceedings instead of other non-jurisdictional AO’s (supra). Hence, in the eye of law the assessment order dated 3-10-2018 passed by the Non-Jurisdictional AO,Ward 5(4) is invalid. This fact is also confirmed by the ld. AO in his report wherein he has stated that “It is worthy to mention that the Income Tax Officer, Ward 5(1), Jaipur and the Income Tax Officer, Ward 5(4), Jaipur were under the addl./Joint Commissioner of Income Tax, Range-5, Jaipur and the PCIT-2, Jaipur. Thus, the objection filed by the assessee which was forwarded to the ld. AO got confirmed and thus we find force in the contention of the assessee raising the issue of notice about the non- jurisdictional AO. Thus, the assessment order passed in this case is required to be quashed. We place reliance on the order of the ITAT Jaipur Bench in the case of Shri Mukesh Kumar Agarwal vs ITO, Ward 1(2), Bharatpur (ITA No. 321/JP/2021)wherein the Bench at para 2.7 held as under:-
‘’2.7 We have heard both the parties and perused the materials available on record. From the records, it is noted that the assessee filed his return of income on 26-06-2010 declaring total income at Rs. 1,58,540/- having jurisdiction over the case whereas action u/s 147 of the Act was initiated after recording reasons by a Non-jurisdictional AO (ITO, Ward-5(2), Jaipur) who had also obtained sanction u/s 151 of the Act from the Pr. CIT-2, Jaipur and issued notice u/s 148 of the Act on 08-03-2017 (Paper Book Page 18). After realizing jurisdiction error, the reopened case was transferred by ITO, Ward 5(2), Jaipur to ITO, Ward 1(2), Jaipur. It is also noted from the assessment order wherein Jurisdictional AO had confirmed as under- "The case was received on transfer from ITO, Ward 5(2), Jaipur on 24-10-2017 as the jurisdiction over the case lies with the undersigned." It is noteworthy to mention that it is a settled law that notice issued u/ 148 of the IT Act by the Assessing Officer, having no jurisdiction, the assessment order and consequent proceedings are invalid.’’ We place further reliance of Hon’ble Delhi High Court in the case of Dushyant Kumar Jain vs DCIT (2016) 381 ITR 428 wherein it was held as under:-
‘’Reassessment; Notice issued by AO having no jurisdiction. Notice u/s 148 was invalid as being issued by AO other than the one who had jurisdiction over case of the assessee.’’ Hence, in view of the above facts and circumstances of the case, the Bench noticed that the notice issued by the AO u/s 148 had no jurisdiction and the assessment order passed by the AO, Ward 5(4), Jaipur has no relevance to apply upon the assessee and the same is treated as invalid in the eye of the law. Thus, the appeal of the assessee is allowed.
4.0 In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 23 / 06 /2025.
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