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2018 (9) TMI 2022 - AT - Income TaxReopening of assessment u/s 147 - AO proceeded to initiate reassessment proceeding on the main premise and allegation and that the assessee has not filed return of income for AY 2007-08 - HELD THAT - As from the copy of return and in absence of any other adverse material or evidence we are satisfied that the assessee filed return of income for AY 2007-08 and the AO proceeded to initiate reassessment proceeding on the wrong premise that the assessee had never filed return of income for the relevant period. Respectfully following ratio of the decision of Hon ble Jurisdictional High Court in the case of Sunrise Education Trust 2018 (2) TMI 1471 - GUJARAT HIGH COURT we hold that the entire reasoning recorded by the AO for initiation of reassessment proceedings and issuance of notice u/s. 148 of the Act was on the wrong premise that the assessee had never filed the return and in fact it was filed. Therefore we are inclined to hold that the initiation of reassessment proceedings u/s. 147 of the Act and notice u/s. 148 of the Act and all subsequent proceedings and orders have been issued conducted and passed without having valid jurisdiction therefore the same are bad in law and hence we quash the same. - Decided in favour of assessee.
Issues involved:
1. Validity of reopening assessment for AY 2007-08 without proper reason. 2. Service of notice u/s. 148 on the appellant. 3. Addition of Rs. 7.00 lacs on account of investment in SBI M.F. Analysis: 1. The appeal was filed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2007-08. The Assessee challenged the reopening of assessment for AY 2007-08 without sufficient reason to believe for income escapement. The Assessee contended that the AO's main allegation was that the Assessee had not filed the return of income for FY 2006-07, which was disputed by the Assessee with evidence of filing the return on 27.03.2008. The Tribunal found that the AO proceeded on the wrong premise that the Assessee had never filed the return, leading to the quashing of the reassessment proceedings and notice u/s. 148 as they lacked valid jurisdiction. The legal grounds raised by the Assessee were allowed, and the entire proceedings were quashed. 2. The issue of the service of notice u/s. 148 on the appellant was raised in the appeal. The Departmental Representative argued that the reassessment proceedings were initiated based on AIR information regarding the Assessee's investments. However, it was acknowledged that the Assessee had indeed filed the return of income for AY 2007-08. The Tribunal held that the initiation of reassessment proceedings and subsequent orders were conducted without valid jurisdiction due to the wrong premise that the Assessee had not filed the return. Consequently, the notice u/s. 148 and all related proceedings were quashed. 3. The Assessee contested the addition of Rs. 7.00 lacs on account of investment in SBI M.F., arguing that the investment was already reflected in the books of accounts, making the provision of section 69 inapplicable. However, since the Tribunal quashed the reassessment proceedings and subsequent orders due to lack of jurisdiction, the issue on merits became irrelevant and was not adjudicated. Ultimately, the appeal of the Assessee was allowed on legal grounds, and the order was pronounced in favor of the Assessee on 26th September 2018.
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