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Income Tax Appellate Tribunal, Delhi Bench “SMC”, New Delhi
Before: SHRI N.K. SAINI
This is an appeal by the assessee against the order dated 15.3.2017 of CIT(A), Meerut. Following grounds have been raised in this appeal:
That the learned Commissioner of Income Tax (Appeals) (hereinafter referred to as ‘Id. CIT (A)’) has erred in law as well as on the facts of the case by confirming an addition of Rs.23,99,000/- u/s 69 of the Income Tax Act, 1961 as against the addition made by the Id. A.O. u/s 68 and the various conclusions drawn and observations made are unjust, unwarranted and inconsistent with the material on record and the submissions of the appellant have not been considered in right perspective thereof.
That the Id. CIT(A) has erred in law and on the facts of the case by observing that the application under rule 46A of the Income tax Rules, and the additional evidences filed by the appellant during the appellate proceedings needs to be rejected.
3. That without prejudice to the above, the Id.CIT(A) has grossly erred in law and in facts of the case by not accepting the explanation offered by the assessee regarding the sources of cash deposited in his bank account during the relevant year and confirming the addition of Rs.23,99,000/-, for various reasons including the following:- a) Copies of sale deeds executed by the son of the appellant during the relevant year were duly placed on record, hence the contention of the Ld. CIT(A) that the ownership of the son on the date of sale thereof was not proved, is completely misplaced and is inconsistent with the documents on record. b) The Id. CIT(A) has wrongly ignored the certificate of the two sons to the effect that the amount of sale proceeds of their plot at Rs. 14,00,000/- was given by them to their father, who deposited the same in his saving bank account, without disproving the same, just by stating that affidavits of sons were not filed by the appellant. c) The Id. CIT(A) has acted upon his whims and surmises by assuming that the appellant did not have any tractor and buffaloes with him, without disproving the evidences placed on record. d) The Id. CIT(A) has acted against the law by not accepting the statement on oath given by a person in the form of a duly sown in affidavit. Further, the rejection of the affidavit has been made without cross examining the deponents for technical reason that the same did not identify the officer in whose front it was to be filed nor the proceedings in which it was to be used. e) The Id. CIT(A) has wrongly denied credit of cash withdrawals of Rs.2,30,000/- from appellant’s bank accounts, incorrectly making a finding & observing that the cash flow of six years was produced in order to explain the same, while as per the details on records the cash was withdrawn from the bank accounts during the period from 10.05.2011 to 04.02.2012 and the cash flow submitted related to only one year.
4. That without prejudice to the above grounds of appeal
, the whole assessment proceedings u/s 147 of the Act, are bad in law and are liable to be quashed since the notice u/s 148 of the Act, was issued by ITO, Ward - 2(4), Meerut, who had no jurisdiction on the assessee, and not by the ITO-Baraut, the jurisdictional assessing office, who completed the assessment. Though this ground was not raised before the ld. CIT(A) but the same being purely of legal nature deserves to be entertained by the Hon’ble court in the present appeal proceedings.
2. Vide ground no. 4 the grievance of the assessee relates to the jurisdiction of the AO while framing the assessment under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
Facts of the case, in brief, are that the ITO Ward-2 (4), Meerut initiated the proceedings under Section 147 of the Act by issuing the notice under Section 148 of the Act dated 11.4.2014, on the basis of information received that the assessee had deposited cash amounting to Rs. 24,68,500/- during the financial year 2011-12 in his saving bank account. Since the assessee did not furnish the explanation, the AO completed the assessment under Section 144 / 148 of the Act on 12.1.2016 at an income of Rs. 24,69,000/-. Being aggrieved the assessee carried the matter to the learned CIT(A) who sustained the addition.
Now the assessee is in appeal.
The learned counsel for the assessee submitted that the notice under Section 148 of the Act was issued by the ITO Ward-2 (4), Meerut who had no jurisdiction on the case of the assessee. A reference was made to page 70 of the assessee’s paper book, which is copy of the reasons recorded dated 11.4.2014 by the ITO Ward-2 (4), Meerut. It was further submitted that the assessment has been framed by ITO, Baraut who had not issued any notice under Section 148 of the Act. Therefore, the assessment framed was not valid. Reliance was placed on the following case laws:
(i) ACIT vs. Resham Petrotech Ltd., 136 ITD 185 (Ahd) (ii) Smt. Smriti Kedia vs. Union of India, 339 ITR 37(Cal) 6. In his rival submissions, the learned DR supported the orders of the authorities below and further submitted that the assessee did not reply to the notice issued by the AO for explaining the deposit in his bank account. Therefore, the addition was rightly made by the AO and the learned CIT(A) was justified in sustaining the same.
We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the notice under Section 148 of the Act was issued by the ITO Ward-2 (4), Meerut for initiating the proceedings under Section 147 of the Act, on the basis of the said notice the assessment has been framed by the ITO, Baraut who had not issued any, therefore, the assessment framed U/S 144 of the Act by the ITO, Baraut was void.
On a similar issue the ITAT Ahmedabad Bench in the case of ACIT vs. Petrotech Ltd. 136 ITD 185 (Supra) held as under: “The reasons for reopening must be recorded by jurisdictional AO because he is keeping all relevant and primary record. The basic requirement of section 147 of the Act is that the AO has reason to believe that any income chargeable to tax has escaped assessment. Such belief must be the belief of jurisdictional AO and not any other AO or authority of the department. Therefore, it is well settled that the AO's jurisdiction to reopen an assessment u/s. 147 depends upon the issuance of a valid notice. If the notice issued by him is invalid for any reason the entire proceedings taken by him would become void for want of jurisdiction”.
Similarly the Hon’ble Calcutta High Court in the case of Smt. Smriti Kedia vs. Union of India 339 ITR 39 (Supra) held as under: “It is evident that the department in its affidavit in opposition has not denied the fact that all along the petitioner was assessed at Kolkata That apart, there is nothing on record to show that pursuant to an order under section 127 of the Act, the assessment records of the petitioner were transferred either from Kolkata to New Delhi or from New Delhi to Kolkata. Therefore, unless records were validly transferred from Kolkata to New Delhi, the said respondent had no jurisdiction to issue notice under section 148 for the assessment year in question. Hence, the impugned notice dated 28th March, 2006 under section 148 issued by the respondent no. 2 is arbitrary, without jurisdiction and illegal”. 10. In the present case, it is an admitted fact that the AO who framed the assessment U/S 144 of the Act, never issued any notice for initiating the proceedings under Section 147 of the Act, therefore, in the absence of any valid notice being issued by the AO the present assessment order was not valid, accordingly the same is quashed.
In the result, appeal of the assessee is allowed. (Pronounced in the open court at on 22.11.2017.)