ACIT, CIRCLE - 24(1), HOOGHLY, HOOGHLY vs. M/S. A.K. INDUSTRIES, HOOGHLY

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ITA 58/KOL/2018Status: DisposedITAT Kolkata25 January 2019AY 2008-0910 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment was invalid because the notice was issued by an Assessing Officer without territorial jurisdiction. The Revenue's reliance on a Delhi High Court judgment was found inapplicable as the assessee had filed objections within the stipulated time.

What were the facts?

The Revenue appealed against an order of the CIT(A) which had quashed the reopening of assessment. The CIT(A) found that the notice for reopening was issued by an Assessing Officer lacking territorial jurisdiction.

What were the issues?

Whether the reopening of assessment is valid when the notice under Section 148 is issued by an Assessing Officer without territorial jurisdiction. Whether a taxpayer can question the jurisdiction of the Assessing Officer after the expiry of one month from the date of service of notice under Section 148.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA

Before: Sri S.S. Godara & Sri M. Balaganesh

Date of concluding the hearing : December 27th , 2018 Date of pronouncing the order : January 25th , 2019 ORDER Per S.S. Godara, JM :-

1.

This revenue’s appeal for Assessment Year 2008-09 arises against Commissioner of Income Tax (Appeals)-6, Kolkata’s order dated 31/10/2017 passed in case No. 15/CIT(A)-6/Kol/2016-17, involving proceedings u/s 147/144, of the Income Tax Act, 1961 (in short ‘the Act’).

1.1. Heard both parties. Case files perused. 2. The revenue raised the following substantive grounds in the instant appeal:- “1. That on facts and in circumstances of the case and in law, the ld. CIT(A) has erred in not upholding the fact that notice issued by ITO is within his jurisdiction and served within the time frame.

2.

That on facts and in circumstances of the case and in law, the ld. CIT(A) has erred in not upholding the fact that assessment order passed by the AO is on the basis of valid notice issued by the AO after taking prior approval of the appropriate authority.

3.

That on facts and in circumstances of the case and in law, the ld. CIT(A) has erred in not upholding the addition of Rs.1,91,24,370/- made by AO is justified and as per law.”

Assessment Year: 2008-09 M/s. A.K. Industries

4.

Learned departmental representative takes us to the CIT(A)’s findings quashing the impugned re-opening/re-assessment as follows:-

Assessment Year: 2008-09 M/s. A.K. Industries Assessment Year: 2008-09 M/s. A.K. Industries Assessment Year: 2008-09 M/s. A.K. Industries Assessment Year: 2008-09 M/s. A.K. Industries Assessment Year: 2008-09 M/s. A.K. Industries Assessment Year: 2008-09 M/s. A.K. Industries

5.

It is vehemently contended at the Revenue’s behest that the CIT(A) has erred in law as well as on facts in holding that the ITO, Ward 1(1), Noida, did not have territorial jurisdiction for re-opening the assessment after recordings reasons of escapement of assessee’s taxable income from being assessed. It then quotes hon’ble delhi high court’s judgment in the case of Abhishek Jain vs. ITO [2018] 94 taxmann.com 355 (Delhi) holding that the Assessing Officer’s jurisdiction cannot be called into question at the concerned tax payer’s instance after expiry of one month from date on which he was served with the notice for reopening under section 148 of the Act. We do not find any merit in either

Assessment Year: 2008-09 M/s. A.K. Industries of the Revenue’s twin arguments. Case file suggests that the assessee has been assessed at Hooghly only right from Assessment Year 2002-03, onwards. There is no dispute that it is the ACIT, Circle-24, Hooghly, ITO Noida, who had framed the impugned re- assessment in the instant case. It thus emerges to be an instance of Section 148 notice issued by an Assessing Officer not having territorial jurisdiction going to root of the matter. Hon’ble Jurisdictional High Court (supra) categorically holds that such an erroneous assumptions of Section 148 proceedings is not sustainable in law. We therefore accept the assessee’s arguments supporting the CIT(A) action quashing the impugned reopening.

6.

Coming to the Revenue’s latter plea based on hon’ble Delhi high court’s judgement (supra) we find that section 148 notice stood served on the assessee on 09/03/2016 followed by its detailed objections filed before the Assessing Officer on 21/03/2016 i.e., within a month. This judicial precedent does not apply in facts of the case in hand therefore.

7.

This Revenue’s appeal is dismissed.

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