UDS OFFSETS PVT. LTD.,FARIDABAD vs. ITO, NEW DELHI

The assessee has raised the following grounds:-

The brief facts of the case are that return of income for the AY 2006-07 was filed on 30.11.2006, declaring income at Rs. NIL. Notice u/s.148 dated 12.3.2013 was issued. Notices u/s. 143(2) dated 15.10.2013 and 5.12.2013 were issued. In response to the same, the AR of the assessee attended the hearing from time to time. The assessee company is engaged in the business of trading and manufacturing of offset printing machine. The assessee raised an objection of validation of notice issued u/s. 148 inter alia on the ground that the AO who has issued the notice u/s.148 was not having jurisdiction over the assessee. The AO who has completed the reassessment did not accept the contention and objection of the assessee and completed the reassessment vide order dated 28.2.2014 passed u/s.143(3)/148 of the I.T. Act. On appeal, the Ld. CIT(A) though rejected the objection raised by the assessee on the validity of the notice issued u/s.148 of the Act and confirmed the addition by partly allowing the appeal of the assessee vide his order dated 5.5.2016.

Against the order of the Ld. CIT(A), assessee is in appeal before the Tribunal.

On the other hand, Ld. DR relied upon the order passed by the revenue authorities.

I have heard both the parties and perused the relevant records especially the order passed by the Revenue Authorities. I find considerable cogency in the assessee’s counsel submissions that the reassessment order dated 28.2.2014 passed by the AO is without jurisdiction and is liable to be quashed because the jurisdictional AO has not issued and served any notice u/s. 148 of the Act. Therefore, the assessment proceedings initiated are illegal, unsustainable and untenable under the law. From the records, I note that assessee had its registered office in New Delhi since the date of its incorporation; filing its ITR at New Delhi right since the date of its incorporation and ITR for AY 3 under appeal was filed on 30.11.2006 and PAN details since its incorporation also lies with the Delhi income tax authorities. And based on information received from the ADIT, Faridabad, the AO, Ward 1(1), Faridabad who did not had any jurisdiction over the assessee issued notice u/s. 148 of the Act and also issued notice u/s. 142(1). The Assessee informed the AO about its jurisdiction to be assessed at Delhi and requested for transfer of records at Delhi and accordingly, the case was transferred. Accordingly, the notice u/s.142(1) and 143(2) was issued by the Jurisdictional AO Ward 18(2), New Delhi for the first time on 15.10.2013 and no notice u/s. 148 was ever issued by the jurisdictional AO. Hence, the Ld. CIT(A)’s action of confirming the validity of assessment made by the ITO, Ward 28(2), New Delhi without service of valid notice under section 148 is not sustainable in the eyes of law and needs to be quashed. My view is fortified by the ITAT, Mumbai decision dated 7.9.2012 passed in Indorama Software Solutions vs. ITO passed in (2003-004) & Other wherein it has been held as under:-

In the background of the aforesaid discussions and respectfully following the precedent as aforesaid, I am of the considered view that the Jurisdictional AO has not issued any notice u/s 148 of the I.T. Act to the assessee, hence, the reassessment order in dispute is invalid, void abnitio and against the provisions of the law and is not sustainable in the eyes of law and accordingly the same is set aside. Therefore, the 4 reassessment order as well as the appellate order stand cancelled and appeal of the assessee stands allowed.

Since, we hold that the reassessment as invalid and set aside, the other issues on merit have become academic and need not be adjudicated.

In the result, the appeal of the Assessee is allowed.