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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI C.N. PRASAD, JM & SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member)
The captioned appeal by assessee for Assessment Year [AY] 1998- 1999 assails order of Ld. Commissioner of Income Tax (Appeals)-30 [CIT(A)], Mumbai dated 18/04/2011. The assessee has filed four concise grounds of appeal
, out of which Ground No. 4 is general in nature. Ground No. 1 contest jurisdiction acquired by Assessing Officer on legal grounds whereas Ground No. 2 & 3 are related with merits of quantum additions of Rs.10,07,028/- & Rs. 80,562/- made u/s 68 & Section 69C of the Income Tax Act respectively. Since, the jurisdictional issue goes to the very root of the matter, we take up the same first.
2. Briefly stated, the assessee, being resident individual engaged in legal profession, was subjected to an assessment u/s 143(3) read with section 147 for impugned AY vide Assessing Officer [AO] Ward 19(3)-1 order dated 10/03/2006 where the assessee suffered certain additions u/s 68/69C for Rs.10,87,590/-. As per assessment order, the reassessment proceedings were triggered by issuance of notice u/s 148 dated 22/11/2004 which was served on the assessee on 30/11/2004 and the assessee was required to file its return of income by 30/12/2004. Subsequently, notices u/s 143(2) & 142(1) were issued and served upon assessee on 03/10/2005. However, the assessee questioned the jurisdiction acquired by the Ld. AO since it never filed its return of income under the said ward. On the contrary, AO A.V.Bukhari Assessment Year 1998-99 drew attention of the assessee to the fact that the address of the assessee as per PAN database fell under him and therefore, he was holding valid jurisdiction to carry out the reassessment proceedings. In turn, the assessee submitted acknowledgement copy of return for impugned AY filed by him before AO Circle 12(1)(4), after perusing the same, Ld. AO made efforts to transfer the file of the assessee to concerned officer through his inspector but could not succeed since the jurisdictional AO refused to take the same upon noting that the statutory time period of 6 years for issuance of fresh notice u/s 148 had already elapsed. Thereafter, Ld. AO, himself proceeded to complete the proceedings on the basis of earlier notice u/s 148 issued and made the impugned disallowances.
3. Aggrieved, the assessee carried the matter before Ld. CIT(A) without any success vide impugned order dated 18/04/2011 and contested the reassessment on legal grounds as well as on merits but could not succeed since Ld. CIT(A) uphold the order of Ld. AO on both grounds. Aggrieved, the assessee is in appeal before us and primarily assails the order on legal grounds.
The Ld. Counsel for Assessee [AR], while drawing our attention to the documents placed in the paper book, contended that the assessee, being a legal professional, was always assessed with professional circle namely Circle/Ward 14(1) up-to AY 2000-01 and thereafter under ward 11(2) / 12(1)(4) since AY 2001-02 onwards consequent to reorganization of the department. The assessee never filed return of income nor assessed by A.V.Bukhari Assessment Year 1998-99 any AO in ward 19. Therefore, the reassessment proceedings carried out by the Ld. AO ward 19(3)-1, being non jurisdictional officer, stood vitiated on legal grounds and therefore, bad in law. Our attention was further drawn to the fact that the assessee filed its return of income for impugned AY before ACIT (Inv.) Circle 14-Professional Circle-Mumbai on 28/09/1998 declaring taxable income of Rs.2,69,449/- which was processed u/s 143(1). Thereafter ACIT Circle 11(2) issued a notice u/s 148 dated 25/03/2005 and the assessee vide its letter dated 25/04/2005 requested the AO to treat the original return filed on 28/09/1998 as return pursuant to the said notice. In the meanwhile, non-jurisdictional AO of ward 19(3)(1) issued notices u/s 143(3) & 142(1) both dated 03/10/2005 and the assessee objected to the same since reassessment proceedings were already under progress with the jurisdictional AO. Further, assessee, vide its letter dated 30/04/2005 requested the jurisdictional AO of Circle 11(2) to supply the reasons for reopening which were never supplied and the same very fact vitiates the whole reassessment proceedings in view of various judicial pronouncements. In support, various documents / notices / correspondences including return of income since AY 1990-91 has been placed in the paper book. The Ld. AR also contested the receipt / service of notice u/s 148 dated 22/11/2004 stated to be issued by AO ward 19(3)-
1. 1.
5. Per contra, Ld. DR placed reliance on the conclusions drawn by Ld. CIT(A) and contended that the assessee did not file his return of income A.V.Bukhari Assessment Year 1998-99 pursuant to notice dated 22/11/2004 and hence debarred from raising jurisdictional issue now.
We have heard the rival contentions and perused relevant material on record. From the record it is undisputed fact that the assessee has been filing its return of income since 1990-91 in Circle / Ward 14(1) / 11(2) / 12(1)(4). As evident from record, the assessee has been issued a notice u/s 148 dated 25/03/2005 by ACIT 11(2), against which submission has been made by the assessee vide his letters dated 25/04/2005 & 30/04/2005 where the assessee, inter-alia, requested the AO to supply the reasons for reopening proceedings. The Ld. DR could not show issuance / service of another notice u/s 148 dated 22/11/2004 as stated by the Ld. AO Ward 19(3)-1 in the impugned order. The revenue has failed to show that the reasons for reopening as requested by assessee were ever supplied to him which as per settled judicial pronouncements vitiates the proceedings itself. The revenue also could not show that whether there was any order of the appropriate authority in terms of Section 120 / 124 of the Income Tax Act transferring the jurisdiction of the assessee from one AO to another. It is also evident from the order of Ld. AO that he himself made an effort to transfer the file to jurisdictional officer by deputing the inspector of the ward, which in itself, reveals invalid jurisdiction acquired by the Ld. AO who proceeded with the case upon being refused by the jurisdictional officer. All these factors leads us to conclude that the Ld. AO ward 19(3)(1) failed to acquire valid jurisdiction u/s 147 and therefore, vitiates the reassessment
A.V.Bukhari Assessment Year 1998-99 proceedings. This being so, we are inclined to quash the said proceedings and allow assessee’s appeal. 7. Since we have already allowed assessee’s appeal in legal ground, we find no reason to delve into the issue any further on merits. 8. The assessee’s appeal stands allowed in terms of our above order.
Order pronounced in the open court on 19th May, 2017.
Sd/- Sd/- (C. N. Prasad) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member मुंबई Mumbai; िदनांक Dated : 19.05.2017 Sr.PS:- Thirumalesh आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent 2. आयकर आयु�(अपील) / The CIT(A) 3. आयकर आयु� / CIT – concerned 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6.