MUKESH KUMAR AGARWAL,JAIPUR vs. I.T.O. WARD 1(2), JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oaJh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 321/JP/2021 & 152/JP/2022 fu/kZkj.k o"kZ@Assessment Year : 2010-11 Shri Mukesh Kumar Agarwal cuke The ITO Vs. 52-53, Choura Rasta Ward- 1(2) Jaipur Bharatpur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AHAPA 0880 B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri G.M. Mehta, CA jktLo dh vksj ls@Revenue by: Smt. Monisha Choudhary, JCIT lquokbZ dh rkjh[k@Date of Hearing : 13/07/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 27/07/2022 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM Both these appeals are filed by the assessee against two different orders of CIT(A) dated 30-10-2021 and 15-03-2022, National Faceless Appeal Centre, New Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2010-11 under section 144/147 of the I.T. Act and penalty order u/s 271E of the I.T. Act. Since both these appeals pertain to an assessee mentioned hereinabove, therefore, for the sake of convenience and brevity of the case the Bench decides to pass a consolidated order.

2 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR 2.1 First of all, we take up the grounds of appeal of the assessee for adjudication in ITA No. 321/JP/2021 wherein following grounds have been raised by the assessee. ‘’1. Ld. CIT(A) was not justified in sustaining addition of Rs.36,662/- on basis of wrong and misleading finding of the AO that the sale of immovable property by the assessee himself and not in capacity as Power of Attorney of one Shri Prahlad Singh for sole reason that the Power of Attorney Executor could not be produced after a gap of about eight years.

2.2 Apropos ground No. 1 and 2 of the assessee, brief facts of the case are that the assessee filed original return of income on 26-06-2010 electronically declaring total income at Rs.1,58,540/- but the assessee did not file the return of income in response to notice dated 28-03-2017 issued u/s 148 of the Act. It is also pertinent to note that the case of the assessee was transferred from ITO, Ward 5(2), Jaipur to

3 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR ITO, Ward 1(2), Jaipur. As per information received from ITO, Ward 5(2), Jaipur vide his office letter No. 1990 dated 8-03-2017, it was gathered that assessee had sold immovable property situated at Flat No. B-1, Ground Floor (East North Part), Arjun Tower, Plot No. 28, Khasra No. 432, Tara Nagar-D, Jhotwara, Jaipur for a consideration of Rs.8,87,220/- on 3-02-2010. Notice u/s 142(1) was issued by the AO on 26-10-2017 fixing the case for hearing on 31-10-2017. The AO noted that on 27-10-2017, Shri Mukesh Agarwal, assesee, attended the proceedings and sought adjournment and thus the case was adjourned to 15-11-2017. The AO further noted that on 15-11-2017 Shri Murari Birla, CA appeared and filed power of attorney and he was requested by the AO to produce the copy of HDFC Bank Account by 20-11-2017. None attended on 20-11-2017 on behalf of the assessee nor any written submission/ reply was filed. However, on 27-11-2017 Shri Mukesh Agarwal, assessee attended the office and the AO desired information from the assessee as mentioned at point No. 1 and 2 of his order. The AO mentioned in the assessment order that on plain reading of the Power of Attorney, he found that all the rights had been given by the Executor to Shri Mukesh Agrwal who sold this property on 3-02-2010 after a period of 34 months. The AO asked the assessee to produce proof of payment of sale consideration to the power attorney executor i.e. Shri Prahlad Sing but the assessee failed to explain the same. The details of the property sold was through following mode of payment.

4 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR

Rs.1,21,000 received in cash Rs 7,00,000 received through cheque no 959132 dated 02-02-2010 of HDFC Bank Ltd. The AO observed during the assessment proceedings that the assessee submitted the copy of bank statement of Punjab National Bank, Johri Bazar vide account No. 3553000100164792 but on perusal of bank statement no such cheque was received, however, some cash was deposited on various dates of F.Y. 2009-10 in this bank account. The AO further noted that the assessee vehemently denied for having bank account except Punjab National Bank, Johari Bazar, Jaipur and this statement was also mentioned in his letter dated 01-12-2017. The AO thus noted that the assessee had failed to explain the amount of cheque as well as cash received on sale consideration of above property. The AO observed that the assessee had neither produced the power of attorney executor nor explained the sale realization which he had received as a power of attorney holder. The contention of the AO was that the assessee had to prove that the sale realization had been received and transferred to power of attorney executor but he failed to do so. The efforts were made by the AO to call for information from Shri Prahlad Singh vide his office letter No. 1209 dated 01-12-2017 on the known address through notice server but the notice server reported that Shri Prahlad Singh left the house on that address.

5 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR The AO looking to overall facts of the case and the discussion made with the assessee found the assessee liable to pay long term capital gain on sale of property in question by calculating as under:- Sale Consideration Rs.8,87,220/- Indexed cost of acquisition Rs.8,50,558(6,68,873x632/497) Long Term capital Gain Rs.36,662/-

Accordingly, an addition of Rs.36,662/- was made by the AO to the total income of the assessee as long term capital gain on sale of property. In this view of the matter, the AO was satisfied that the assessee concealed the income in the form of undisclosed long term capital gain for which the AO initiated the penalty u/s 271(1)© of the Act separately. 2.3 Further, the AO noted that during the year under consideration, the assessee had deposited cash amounting to Rs.4,07,000/- with Punjab National Bank, Johari Bazar, Jaipur for which the assessee was asked to explain the sources of cash deposited vide show cause letter dated 01-12-2017. In response to this, the assessee submitted that sources of cash deposit was out of unsecured loans from friends for which he had submitted affidavit in the form of confirmation of five persons whose from whom he accepted the loans as under:- 1. Rabia Begam Rs.50,000/- cash 2. Mohd. Sabir Rs.50,000/- cash 3. Rauf Mohd. Rs.60,000/- cash 4. Abida Begam Rs.50,000/- cash

6 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR 5. Mohd. Arif Rs.50,000/- cash Rs.2,60,000 As regards balance of Rs.1,47,000/- cash deposited in PNB, Johari Bazar, Jaipur, the assessee explained that these were deposited out of his income declared in the return of income. The AO thus felt that the assessee violated the provisions of Section 269SS and 269T of the Act by receiving unsecured loans in cash and payment thereof in cash. According to the AO, the assesse failed to explain the sources of cash deposit of Rs.2,60,000/- because before taking unsecured loans the income of the borrower should be considered whether he has income for repayment of unsecured loans. According to the AO, the income of the assessee during the F.Y. 2009-10 was to the tune of Rs.1,58,540/- after deduction u/s 80C of Rs.1,00,000/- and assessee also paid some payments during F.Y. 2009-10 through PNB Bank to LIC, Max etc. at Rs.84,889/-. The AO further noted that the assessee stated that cash balance of Rs.1,47,000/- was paid out of his brokerage income already shown in ITR then as to how it is possible that assessee paid Rs.2,60,000/- as unsecured loans and also deposited Rs.1,47,000/- cash in Punjab National Bank, Johari Bazar, Jaipur out of income declared at Rs.1,58,540/-. The AO observed that the assessee explained the sources of cash amounting to Rs.4,07,000/- which the AO treated as bogus and added the same to the total income of the assessee as unexplained money u/s 69A of the Act for which the AO initiated the penalty u/s

7 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR 271(1)© of the Act separately. Conclusively, the total income is assessed at Rs.6,02,200/- u/s 144 of the Act by the AO. 2.4 Aggrieved by the order of the AO, the assessee carried the matter before the ld. CIT(A) who dismissed the both the grounds of the appeal of the assessee by observing as under:- Regarding Ground No. 1 sustaining the amount of Rs.36,662:- ‘’5.1 The contention of the appellant is that the assessee is only the power of attorney hold for sale of immovable property. In the support of the contention the assesse had not produced copy of power of attorney for sale of immovable property. Further, the appellant stated that the cheque mentioned in the sale deed and cash was not received by the assessee but received by the original owner of the property. The assessee should have furnished the evidence proving the cheque deposit in the bank account of the so called owner of the property. Further a confirmation from the said owner should have been furnished before the AO or during appellate proceedings. No material evidence could be furnished in respect of the contention by the assessee either during the appellate proceedings or even during the assessment proceedings. Under such circumstances the ground raised in this ground cannot be allowed. The ground no. 3 is dismissed. Regarding Ground No. 2 sustaining the legality of order of the AO by ld CIT(A) for issuance of notice u/s 148 of the Act.

‘’3.2 It is clear in terms of Section 124(3)(b) of the I.T. Act, jurisdiction of an AO cannot be called in question by any assessee after expiry of one month from date on which he was served with a notice for reopening assessment u/s 148 of the I.T. Act. In the present case, the assessee had not questioned the jurisdiction for issuance of notice u/s 148n of the I.T. Act within 30 days from the date of notice issued u/s 148 of the Act. Thus the ground raised against the

8 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR jurisdiction of the ITO for issuse of notice u/s 148 of the Act cannot be tenable. In view of the above respectfully following Hon’ble Delhi High Court in the case of Abhishek Jain vs Income Tax Officer, Ward 55(1), New Delhi (supra), the Ground No. 1 is dismissed. ‘’4.1 With regard to the jurisdiction for issuance of notice u/ 148 of the Act has already been discussed in the Ground No. 1 of this order. Further the passing order u/s 144 of the Act, the assessee in response to notice u/s 148 of the I.T. Act had not filed Return of Income. At least, the assessee should have filed a letter mentioning to consider the original return as return filed in response to the notice u/s 148 of the I.T. Act. However, the assessee had not done the same. Further, there must be a return of income filed in response to notice u/s 148 of the Act for issue of Notice u/s 143(2) of the Act. Thus, the AO had rightly passed the order ex-parte u/s 144 of the Act. Therefore, the Ground No. 2 is dismissed.

2.5 During the course of hearing, the ld. AR of the assessee filed the written submission praying therein as under:- ‘’original return of income for the year under consideration was submitted on 26-06-2010 with the jurisdictional ITO, Ward 1(2), Jaipur. On the basis of information received from DDI Wing, Jaipur notice u/s 148 of I.T. Act was issued by non-jurisdictional AO. The ITO, ward 5(2), Jaipur after recording the reasons and obtaining sanction u/s 151 of the Act from Pr. CIT (as ‘’yes’’) which was also from non-jurisdictional Pr. CIT-2, Jaipur. The reasons recorded by non-jurisdictional AO were (1) non-filing the return of income and (2) non-disclosure of capital gains on sale of property whose DLC rate was Rs.8,87,220/- After realizing the mistake of jurisdictional error, the reopened case was transferred by AO, Ward 5(2), Jaipur to jurisdictional AO, (ITO, Ward 1(2), Jaipur) on 24-10-2017. The jurisdictional error of ITO, Ward 5(2), Jaipur was also confirmed by the ITO, Ware 1(2), Jaipur at the initial part of the assessment order dated 30-10-2017. Appeal against. GROUNDS OF APPEAL:

9 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR GROUND No.(1) Ld. CIT(A) was not justified in sustaining addition of Rs.36,662/- on basis of wrong and misleading finding of the Id. A.O. that the sale of immovable property was by the assessee himself and not in capacity as Power of Attorney of one Shri Prahlad Singh for the sole reason that Power of Attorney Executor could not be produced after a gap of about eight years. As a Power of Attorney-holder of close person Mr. Prahlad Singh S/o. Shri Ugam Singh P.B. page 5 to 8), assessee had sold an immovable property for total consideration of Rs.8,21,000/- (Evaluated price Rs.8,87,220/-) (P.B. page 9 to 14). Out of sale consideration, Rs.1,21,000/ was received in cash on 29.01.2010 and remaining Rs.7,00,000/- by cheque No. 959132 dated 02.02.2010 in name of Power of Attorney Executor which was deposited in his (P.O.A. Excecutor's) bank account. This fact is confirmed from by the Id. AO that in assessee's bank account there is no credit of Rs.7,00,000/- (finding of Id. AO at bottom of page (4) of the assessment order). After completion of the sale, the assessee is not in contact with the Power of Attorney Executor. Since assessee acted as Power of Attorney holder on behalf of the owner of Mr. Prahad Singh who continued the possession till it was sold, the assessee cannot be held to be owner and liable for capital gains tax. Reliance is placed in case of CIT Vs. Sugumaran (2015) 281 CTR (Mad) 115: holding that if the Assessee was merely a Power of Attorney holder and property rights were not handed over to him he could not be treated as owner of the sold property while computing capital gains in his hands. Therefore, the assessee being a Power of Attorney holder, whose role was to sell the property of the owner, cannot be brought to capital gains tax GROUND No. (2) Ld. CIT(A) has erred in law and on facts sustaining legality of order of the Id. AO in which addition of Rs.4,07,000/- was made by ignoring the different judicial pronouncements when:

10 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR (a) Reasons recorded and notice u/s. 148 of IT Act was issued by the Assessing Officer, having no jurisdiction over the case of the assessee; (b) Without prejudice to sub-ground (a), no proper satisfaction as required u/s. 151 was obtained even by said non-jurisdictional Assessing Officer; (a)notice issue by non-jurisdictional AO) Assessee had submitted his Return of income on 26.06.2010 with the Id. LT.O. Ward 1(2), Jaipur (P.B. page 15) having jurisdiction over his case whereas action u/d. 147 of IT Act was initiated after recording reasons. by a non-jurisdictional Assessing Office- IT.O. Ward 5(2), Jaipur who had also obtained sanction u/s. 151 of IT Act from non-jurisdictional Pr.CIT (P.B. page 16 & 17) and issued notice u/s. 148 of IT Act on 08.03.2017 (P.B. page 18). After realizing jurisdictional error, the reopened case was transferred by ITO Ward 5(2), Jaipur to I.T.O. Ward 1(2), Jaipur. At the initial part of the assessment order. the 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 settled law that notice issued u/s. 148 of IT Act by the Assessing Officer, having no jurisdiction, the assessment order and consequent proceedings are invalid. Reliance is placed on following judicial pronouncements (giving head-notes): (1) Dushyant Kumar Jain Vs. Dy, CIT ((2016) 381 ITR 428 (Del): Reassessment; Notice issued by AO having no jurisdiction. Notice uls. 148 was invalid as being issued by AO other than the one who had jurisdiction over case of the assessee. (2) Shirishbhai Hargovandas Sanjanwala Vs. ACIT (2017) 396 ITR 167 (Gul): Competent authority- jurisdiction- notice for reassessment issued by authority other than authority normally Assessing Officer-

11 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR not mere irregularity or curable defect-defective issuance of notice and not service of notice not curable-to be quashed. (3) Pr. CIT Vs. Mohd. Rizwan Prop. M.R. Garments (2018) 11 ITR- OL 149 (All): Notice u/s. 148 validity- condition precedent. Notice issued by AO who had no jurisdiction. Notice void ab-initio. Not a defect curable under section 292BB. (4) (d) City Union Bank Ltd. Vs. ACIT (2020) 425 ITR 475 (Mad): Notice issued without jurisdiction. Existence of alternate remedy would not bar issue of writ to quash the notice. (5) Satish Kumar Khandelwal Vs. ITO (2021) 61 TAX WORLD 71 (JPR): An order passed by an officer having no jurisdiction to pass such order is void ab-initio and deserves to be annulled. The defect in the order is not curable and it cannot be rectified even by sending the matter back to the concernedd officer. Further since the notice u/s. 148 is issued solely on the basis of information received from DIT (I & CI), Jaipur without making any further enquiry and without application of mind, reopening of the assessment is not valid. Therefore, reassessment proceedings consequent to notice issued by non-jurisdictional Assessing Officer is ab-initio void.. (b)No proper satisfaction even by non-jurisdictional CIT: Without prejudice to ground No. 2(a), above, the sanction under section 151of IT Act was obtained from non-jurisdictional Pr. CIT who accorded the sanction without application mind and in a mechanical manner by simply writing "Yes" (P.B. page 17). Sanction in such terms, even by jurisdictional Pr. CIT would be invalid. Reliance is placed on the following judicial pronouncements (giving head-notes): (1) Dy. CIT Vs. Dharampal Satyapal Ltd. (2016) 175 TTJ (Del) 663: According the satisfaction under section 151 of IT Act by Addl. CIT and CIT by simply writing "yes I am satisfied" does not in any manner

12 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR shed any light as to whether there was any application of mind at all by two senior officers, Therefore, the sanction granted by the CIT is invalid and consequently, the notice issued by the AO is bad in law. (2) Pr. CIT Vs. N.C. Cables Ltd. (2017) 391 ITR (Del) 11: Notice- validity. Condition precedent. No proper application of mind by sanctioning authority for issuing notice u/s 147/148 observing "approved" Reassessment is not valid. (3) Pioneer Town Planners (P) Ltd. Vs. Dy. CIT (2018) 195 TTJ (Del 'F) 388 Sanction u/s.151. Recording of satisfaction. Endorsement by Approving Authority merely by writing yes I am satisfied" is not sufficient to comply with requirement of section 151. (4) Ghanshyam Vs. ITO (2018) 194 TTJ (Agra SMC)(UO) 25: Sanction under section 151.Validity - approval granted by Addl. CIT under section 151 by merely observing that he was "satisfied" is clearly an approval without application of mind and therefore, it is notlegally tenable. Said approval and all proceedings pursuant thereto are quashed. (5) Tara Alloys Ltd. Vs. ITO (2018) 63 ITR (Tib) 484 (Del): Where AO had issued notice u/s 148 without application of his mind on information received from Investigation in a mechanical manner without any independent conclusion that he had reason to believe for escapement of income. The reopening of case is bad in law and liable to be quashed. Moreover, the reasons demonstrated that Addl. CIT had written that he was satisfied that it was a fit case for reopening under section 147 which established that he had not recorded proper satisfaction or approval before issue of notice u/s. 148. Thereafter the AO had mechanically issued notice u/s 148 on the basis of information received by him from Investigation Wing. (6) Bull Riders Financial Services (P) Ltd. Vs. ITO (2020) 207 TTJ (Del) 573: Full and true disclosure- AO having re-opened the

13 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR assessment simply on the basis of fax message received from another officer stating that the assessee is a beneficiary of accommodation entries even though the AO was not having any list of beneficiaries at the time of signing the recorded fax message, the reasons for reopening the assessment were wrong. incorrect and non-existence and therefore, the reopening of assessment is illegal, bad in law and void ab-initio. Moreover, the AO was already aware of the fact that the assessee has received share application money and there was no failure on part of the assessee to disclose truly and correctly all material facts necessary for assessment. Sanction granted by the CIT under sec. 151 simply by noting yes, I am satisfied - It is a fit case to issue notice under sec. 148" is not valid. 7) Synfonia Tradelinks Pvt. Ltd. Vs. ITO (2021) 435 ITR 642 (Del) AND (2021) 322 CTR (Del) 310: Section 151: formation of belief by AO that income of the assess00 chargeable to tax had escaped assessment was unreasonable and irrational as it could not be related to underlining information received from Investigation Wing. Further sanction order passed by respondent No. 2 under section 151 simply contains the endorsement "approved which is not a valid. (8) Sharvah Multitrade Company (P) Ltd. Vs. ITO & Anr (2022) 342 CTR (BOM) 366 Reassessment- sanction under sec. 151. Notice under sec. 148 as well as sanction under section 151 show total non- application of mind by the AO and Pr. CIT. Notice: under sec. 148 is therefore, liable to be quashed. (9) Sagar Bullion (P) Ltd. Vs. Union of India & Ors (2022) 440 ITR 485 (Guj): Sanction under section 151- validity vis a vis non- application of mind. Satisfaction under sec. 151 has been endorsed mechanically, without even reading the reasons, mechanically. It cannot be termed as typographical error. Even the AO has not applied his mind after drafting the reasons and perhaps not even the reasons before forwarding it to the CIT for consideration. Notice under sec. 148 is liable to be quashed.

14 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR Therefore, when the reopening of the case is by a non jurisdictional Assessing officer who had obtained sanction u/s.151 of Income tax Act from Pr. CIT who accorded the sanction without application of mind for the property sold by Power of Attorney holder and not by the owner, the whole assessment proceedings and the consequential demand and other notices against the P.A. Holder are ab-initio void. The ld. AR of the assessee further filed the decision of Hon’ble Madras High Court in the case of CIT vs C. Sugumaranl, (2015) 281 CTR 115 (Mad) wherein it was held that ‘’Assessee was merely a power of attorney holder and property rights were not handed over to him; assessee could not be treated as owner of the property sold while computing gains in his hands.

2.6 On the other hand, the ld.DR supported the order of the AO and relied on following case laws.

(1) CIT vs Uttam Chand Nahar (2007) 295 ITR 403 (Raj) (2) Abhishek Jain vs ITO, Ward 55(1), Delhi 94 Taxmann.com 355 (Delhi) 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

15 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR 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 I.T. Act by the Assessing Officer, having no jurisdiction, the assessment order and consequent proceedings are invalid. There are so many case laws by various courts, few of which are as under:-

(1) Dushyant Kumar Jain Vs. Dy, CIT ((2016) 381 ITR 428 (Del): Reassessment; Notice issued by AO having no jurisdiction. Notice uls. 148 was invalid as being issued by AO other than the one who had jurisdiction over case of the assessee. (2) Satish Kumar Khandelwal Vs. ITO (2021) 61 TAX WORLD 71 (JPR): An order passed by an officer having no jurisdiction to pass such order is void ab- initio and deserves to be annulled. The defect in the order is not curable and it cannot be rectified even by sending the matter back to the concerned officer. Further since the notice u/s. 148 is issued solely on the basis of information received from DIT (I & CI), Jaipur without making any further enquiry and without application of mind, reopening of the assessment is not valid. Therefore, reassessment proceedings consequent to notice issued by non-jurisdictional Assessing Officer is ab-initio void.. The Bench feels that there are lapses on the part of the Assessing Authority to decide the jurisdiction of the case. When the case of the assessee falls under the

16 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR jurisdiction of the ITO, Ward 1(2), Jaipur then as to how the other Assessing Officer, (ITO, Ward 5(2), Jaipur having no jurisdiction can issue the notice u/s 148 of the Act. An order passed by an officer without recording reasons has no relevance which is void ab initio and deserves to be annulled. The defect in the order is not curable and it cannot be rectified even by sending the matter back to the concerned officer. Further since the notice u/s 148 is issued solely on the basis of information received from DDI, Wing, Jaipur without making any further enquiry and without referring the matter to the Jurisdictional Officer and non- jurisdictional officer has issued notice u/s 148 of the Act, therefore, reopening of the assessment is not valid. Hence, the reassessment proceedings consequent to notice issued by non-jurisdictional Assessing Officer is ab-inito void. Taking into consideration the above facts and circumstances, the order passed by the ld. CIT(A) is quashed.

3.1 Now we take up the appeal of the assessee in ITA No. 152/JP/2022 wherein following grounds have been raised by the assessee.

(1) Ld.CIT(A) was not justified in sustaining levy of penalty u/s 271E of I.T. Act when the reassessment order whereby penalty initiated was not valid in the eye of law, more so when the AO treated the cash deposits in bank as assessee’s own unexplained money under section 69A of I.T. Act. (2)Without prejudice to ground No. 1 above, the ld. CIT(A) has erred in law and on facts sustaining legality of levy of penalty of Rs.2,60,000/- u/s 271E of Income Tax Act, the order of which is barred by limitation.

17 ITA NO. 321/JP/2021 MUKESH KUMAR AGARWAL VS ITO WARD 1(2), JAIPUR

3.2 We have heard both the parties and perused the materials available on record. It is noteworthy to mention that when the quantum appeal as to issuance of Notice u/s 148 of the Act and confirming the addition by ld. CIT(A) is quashed then the penalty order passed u/s 271E by the ld. CIT(A) has become infructuous. Thus appeal of the assessee is allowed. 4.0. In the result, both the appeals of the assessee are allowed Order pronounced in the open court on 27/07/2022

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