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TMI Blog2012 (9) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... tries from M/s Weal Iron & Steel Co. Pvt. Ltd. Melode Electronics P. Ltd. and M/s Winsome Port Folio Pvt. Ltd. between 21.11.2001 to 1.12.2001, Income-tax Officer Ward-2, Gurgaon, after recording reasons in writing that income to the extent of Rs. 54 lakhs had escaped assessment, issued a notice u/s 148 of the Act on 28/31.03.2008. The said notice u/s 148 remained uncomplied with. In response to another notice dated 25.8.2008 issued u/s 142(1) of the Act , the assessee replied vide letter dated 18.9.2008 that the jurisdiction over their case vested with ITO,Ward-11(4),New Delhi and that return for the AY 2002-03 was filed in that jurisdiction. Accordingly, the Income-tax Officer, Ward-2, Gurgaon transferred the records to ITO,Ward- 11(4),New Delhi on 03.11.2008. Thereafter, a notice dated 03.11.2008 u/s 142(1) of the Act, fixing the hearing for 13.11.2008, was issued. In the meantime, a letter dated 6.11.2008 requiring the assessee to file objections to the proceedings u/s 148 read with section 147 of the Act was issued. In response , the assessee vide letter dated 22.02.2002 informed that return already filed on 22.10.2002 may be treated as return in response to notice u/s 148 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant to file the return of income for the AY.2002-03 in response to the notice u/s 148 dated 31.3.2008. It was served by the Inspector on 18.9.2008 on a different address. On 18.9.2008 a letter was filed by the appellant stating that its jurisdiction lay with ITO Ward 11(4), Delhi. It also provided a copy of the return filed for AY.2002-03 as also the latest return i.e. AY.2007-08 in Ward 11(4), Delhi. On receipt of this information from the appellant, the ITO, Ward-2, Gurgaon on 18.9.2008 itself transferred the assessment record to the ITO Ward 11(4), Delhi stating as under:- "Kindly find enclosed herewith the scrutiny assessment record (in original) in the following cases as the jurisdiction over these cases lies with you. S.No. Name and Addl. of the assessee PAN Assessment Year 1. Indus Valley Investment & Finance Pvt. Ltd. AAAC11539D 2002-03 Notice u/s 148 was issued on 31.3.2008, again notice u/s 142(1) was issued on 25.8.2008 and served upon the assessee on 18.9.2008. In response to which assessee submitted that he is assessed to tax with ITO, Ward 11(4), New Delhi. Copy of return for the A.Y.2002-03 and 2007-08 is enclosed for ready reference." iii). Subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irected u/s 120(4)(b) to exercise or perform all or any of the power and functions conferred on or assigned to an Assessing Officer under the Act. 6.2 In the present case, the registered address of the appellant company is 414/1, 4th Floor, DDA Commercial Complex, District Centre, Janak Puri, New Delhi. Therefore u/s 120 read with section 124(1) of the I.T. Act, the jurisdiction lies with ITO, Ward 11(4), Delhi. A fact duly accepted by the ITO Ward 2 Gurgaon who on learning of the correct jurisdiction transferred the proceedings to ITO, Ward 11(4), Delhi, who in turn accepted the forwarded proceedings without any hesitation in view of his natural jurisdiction over the case. 6.3 From the facts as stated in para 5 supra and the provisions of law, it clearly emerges that as on 31.3.2008 the jurisdiction of the appellant lies with ITO Ward 11 (4), New Delhi and not with ITO Ward-2, Gurgaon. The proceedings u/s 147 which resulted in passing of the impugned assessment order dated 10/12/2008 were initiated by the ITA, Ward-2, Gurgaon. The Assessing Officer having jurisdiction over the appellant u/s 2(7A) has not initiated the proceedings u/s 147 on or after 31.3.2008. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classes of incomes or cases or classes of cases or specific jurisdiction assigned u/s 127 of the IT Act. As on 31.3.2008, under section 120 read with section 124(1) of the IT Act, the jurisdiction of the appellant was already established/defined and it was regularly filing its return of income as per this jurisdiction with ITO Ward 11 (4), New Delhi. When an assessee is already assessed to tax in its own correct jurisdiction with Income-tax Officer cannot simultaneously exercise jurisdiction over that assessee at the same point of time. The IT Act provides for concurrent jurisdiction of the nature and in the manner as envisaged u/s 120(5) of the IT Act. The present case is not covered by section 120(5) of the IT Act. (3). Sub-section 3(b) of section 124 is on the statue after section 124(1) and 124(2) of the IT Act. Section 124(3)(b) has no independent existence. Therefore section 124(3)(b) can be invoked only in those cases where the AO has the jurisdiction u/s 124(1) of the IT Act. In case there is dispute with regard to the interpretation of the jurisdiction u/s 124( 1) read with section 120 of the IT Act, then section 124(3)(b) may apply but where the AO issuing the notice do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity but an incurable illegality. To reiterate, herein, the factum of issuance of the notice by a non-jurisdictional Assessing Officer is an admitted fact. This defect is incapable of being cured by seeking recourse to the provision of section 292BB of the Income-tax Act." 7. To conclude, in view of the facts of the case as discussed in preceding paras as also the provisions of law it is held that the notice u/s 148 dated 31.3.08 issued by the ITO, Ward 2, Gurgaon is beyond jurisdiction and void-ab-initio. The notice is thus held to be invalid. The resultant assessment order u/s 147/143(3) dated 10.12.2008 which has been framed on the basis of the invalid notice u/s 148 is accordingly annulled." 4. The Revenue is now in appeal before us against the aforesaid findings of the ld.CIT(A).The ld. DR supported the order of the AO while the ld. AR on behalf of the assessee company relied upon the findings in the impugned order. 5. We have heard both the parties and gone through the facts of the case. The issue before us is as to whether the reassessment framed by the AO i.e ITO Ward-11(4),New Delhi, in pursuance to a notice dated 31.03.2008 u/s 148 of the Act, issued by Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete the assessment without even recording reasons to believe stipulated in section 147 or issuing any notice u/s 148 of the Act. As mentioned by the AO in his remand report, the ITO Ward 11(4),New Delhi never issued any notice u/s 148 of the Act .Thus ,he did not assume jurisdiction to reassess the income of the assessee even when original return declaring income of Rs.37,440/- was filed on 22.10.2002 by the assessee in his ward. Apparently, the ITO Ward 11(4),New Delhi committed an irregularity by not issuing notice u/s. 148 of the Act again and instead continued the proceedings u/s. 148 of the Act, initiated on 31.3.2008 by the ITO Ward- 2,Gurgaon. This was objected to by the assessee vide letter dated 3-12-2008. Apparently, the jurisdictional AO i.e. ITO, Ward-11(4),New Delhi never acquired jurisdiction to re-assess the income of the assessee under section 147 of the Act nor ever recorded the reasons in writing as stipulated in the said section. reasons for reopening of any assessment have to be recorded by jurisdictional AO alone because he maintains the relevant and primary records. The basic requirement u/s 147 of the Act is that the AO has reason to believe that any i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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