SMT . SANTOSH DEVI,HARDOI vs. ITO-3(3),, BAREILLY

PER ANADEE NATH MISSHRA, A.M.: A. This appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Bareilly [hereinafter referred as the Ld. “CIT(A)”] dated 17.08.2017 for the assessment year 2009-10. The grounds of appeal of the assessee are as under: - “1. That the Ld. Commissioner of Income tax (Appeals), Bareilly erred on facts and in law in not cancelling the re-assessment as the notice of re- assessment had been issued by the ITO-3(3), Hardoi-2 without juri iction. 2. That the assumption of juri iction for re-assessment by issue of notice u/s 148 of the I. T. Act, 1961, its continuation and culmination vide order dated 30.12.2016 is bad in law and cancelled. 3. That the Ld. Commissioner of Income Tax (Appeals), Bareilly erred on facts and in law in confirming the action of the AO in respect of cash deposits of Rs.14,80,000/- in S/b account treating as unexplained. 4. The appellant reserve a right to add/alter/amend any ground of appeal at the time of its hearing.” B. In this case, the assessment order dated 30.12.2016 was passed by the Assessing Officer under section 147/143(3) of the Page 2 of 6

Income Tax Act, 1961 (hereafter referred to as the “Act”) whereby the assessee’s total income was determined at Rs.15,42,040/-
(and net Agricultural income of Rs.15,000/- for rate purpose). As per the return of income, the assessee’s total income was stated to be Rs.62,040/-, in addition to, net agricultural income stated to be Rs.15,000/-. In the aforesaid assessment order an addition of Rs.14,80,000/- was made on account of cash deposits made by the assessee in the bank account. The assessee filed appeal in the office of the Ld. CIT(A) against the aforesaid assessment order on the following grounds of appeal: -
“1. That the Ld. Commissioner of Income tax (Appeals), Bareilly erred on facts and in law in cancelling the re-assessment as the notice of re- assessment had been issued by the ITO-3(3), Hardoi-2 without juri iction.
2. That the assumption of juri iction for re-assessment by issue of notice u/s 148 of the I. T. Act, 1961, its continuation and culmination vide order dated 30.12.2016 is bad in law and cancelled.
3. That the Ld. Commissioner of Income Tax (Appeals), Bareilly erred on facts and in law in confirming the action of the AO in respect of cash deposits of Rs.14,80,000/- in S/b account treating as unexplained.
4. The appellant reserve a right to add/alter/amend any ground of appeal at the time of its hearing.”
B.1. Vide impugned appellate order dated 17.08.2017, the Ld.
CIT(A) dismissed the assessee’s appeal.
As regards the juri ictional issue raised by the assessee in ground no. 2 of appeal filed in the office of the Ld. CIT(A), the Ld. CIT(A) did not decide the issue, holding that the juri ictional matters are not subject matter of appeal. The present appeal before us was filed by the assessee against the aforesaid impugned appellate order dated 17.08.2017 of the Ld. CIT(A). Vide order dated 03.08.2018
of the Co-ordinate Bench of Income Tax Appellate Tribunal,
Lucknow, the issue regarding the aforesaid addition of Rs.14,80,000/- was set aside, on merits of the addition, to the file of the Assessing Officer with the direction to adjudicate the issue afresh, after providing reasonable an opportunity of hearing
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to the assessee. In the aforesaid order dated 03.08.2018 of Co- ordinate Bench of Income Tax Appellate Tribunal, Lucknow, it was held that the issue relating to the juri iction of the Assessing Officer was not pressed by the Ld. AR for the assessee.
However, vide subsequent order dated 06.09.2019 of Co-ordinate
Bench of Income Tax Appellate Tribunal, Lucknow, vide MA.
No.08/LKW/2019 (arising out of ITA. No.709/LKW/2017), the aforesaid order dated 03.08.2018 of Co-ordinate Bench of Income
Tax Appellate Tribunal, Lucknow was recalled for the purpose of deciding ground nos. 1 & 2 which related to juri iction of the Assessing Officer. It is in this background that we heard the present appeal on 30.12.2024. During the appellate proceedings in Income Tax Appellate Tribunal, the following particulars were filed from the assessee’s side: -
PAPER BOOK - I
S. No.
Particulars
1
Submissions of Juri iction
2
Juri iction order issued by JCIT, Range Sitapur
3
Written submissions before CIT(A), Bareilly
4
Written submissions before the ITO-3(3), Hardoi
5
Copy of AIR notice dated 02.02.2016 issued by the ITO, Ward-3(3),
Hardoi
6
Reply of AIR notice by the assessee
7
Notice u/s 148 of the I. T. Act, 1961 issued by ITO, Ward-3(3), Hardoi
8
Reasons for re-assessment
9
Copy of ITR acknowledgement and computation of income of A.Y. 2009-
10 filed in response to notice u/s 148 of the I. T. Act, 1961
10
Copy of Bank Certificate & Bank Passbook Photocopy
11
Copy of Audited Financial Statements of the firm, M/s. Gauri Pati
Udyog & ITR acknowledgement of AY. 2009-10
12
Copy of assessment orders of the firm, M/s. Gauri Pati Udyog passed by the ITO, Ward-3(2), Hardoi for A.Y. 2012-13 & 2014-15
P PAPER BOOK - II
S. No.
Particulars
1
Judgement-1 Arti Securities & Services Ltd Vs. ITO-6(1), Kanpur
2
Judgement-2 Shri Satya Pal Vs. ITO-4(1), Gurgaon
3
Judgment -3 M.I. Builders Pvt. Ltd Vs. ITO
4
Judgement-4 Pankajbhai Jaysukhlal Shah Vs. ACIT (Gujarat H.C) &
S.C.
5
Judgement-5 Madan Lala Agarwal Vs. CIT. All 6
Judgement-6 Modh. Rizwan Vs. PCIT, All 7
Judgement-7 Kalinga Institute of Industrial Technology Vs. S.C.
8
Judgement-8 Kalinga Institute of Industrial Technology Vs. ACIT, H.C
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C.
At the time of hearing, the Ld. Counsel for the assessee submitted that Section 124(3)(a) of the Act did not apply to assessments which are completed in pursuance of Section 147
r.w.s 148 of the Act. He further submitted that as per the juri ictional order in force, the juri iction of the assessee was with ITO-3(3), Hardoi-1 whereas the assessment order was passed by ITO-3(3), Hardoi. He contended that the assessment made by ITO-3(3), Hardoi was beyond his juri iction and should be cancelled.
C.1. The Ld. Departmental Representative for Revenue submitted that Section 124(3) barred the assessee from raising to juri ictional issue after completion of the assessment. He supported the order of the Assessing Officer. He further submitted that juri ictional issue was not raised by the assessee, and once the assessment is completed dispute regarding juri iction cannot be raised.
C.2. On perusal of records and as mentioned earlier in this order, the Ld. CIT(A) in his impugned order dated 17.08.2017 did not decide the juri ictional issue raised by the assessee in ground no. 2 of the appeal filed in the office of the Ld. CIT(A).
However, on perusal of Section 246A(1)(b) of the Act, it is found that the order of assessment, re-assessment or re-computation made under section 147 of the Act is appealable before the Commissioner (Appeals). The view expressed by the Ld. CIT(A) on juri ictional issue is without any basis. His observation that juri ictional matters are not subject matter of appeal was made in a summary manner without explaining the reasons for his observation and without supporting the observation with any legal provision or decided precedents. In view of the foregoing, the issue regarding juri iction of the Assessing Officer, as raised by Page 5 of 6

the assessee in ground no. 2 of appeal filed by the assessee in the office of the Ld. CIT(A) is restored back to the file of the Ld. CIT(A) with the direction to adjudicate this ground through a speaking order, after providing reasonable opportunity of hearing to the assessee and the Assessing Officer. Grounds 1 & 2 of appeal are treated as disposed off in accordance with the aforesaid directions.
D.
On merits of the addition, 3rd ground of appeal has already been decided by the aforesaid order dated 03.08.2018 of Co- ordinate Bench of Income Tax Appellate Tribunal, Lucknow. All the grounds of appeal are now treated as disposed off on reading this order in consonance with the aforesaid order dated
03.08.2018 of Co-ordinate Bench of Income Tax Appellate
Tribunal, Lucknow.

In the result, appeal of the assessee is partly allowed for statistical purposes.

Order pronounced in the open Court on 01/01/2025. [KUL BHARAT]
[ANADEE NATH MISSHRA]
VICE PRESIDENT
ACCOUNTANT MEMBER

DATED: 01/01/2025
Vijay Pal Singh, (Sr. PS)
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