A.V. BUKHARI,MUMBAI vs. ITO WD 19(3)(1), MUMBAI

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

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)-

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