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2015 (12) TMI 505 - ITAT DELHI

2015 (12) TMI 505 - ITAT DELHI - TMI - Reopening of assessment - officer jurisdiction to issue the notice - Held that:- The words used in Section 147 of the Act are " the Assessing Officer " and which clearly means a particular officer who has the jurisdiction, over the case of a particular assessee. It is not the case that the statute has mandated every Assessing Officer to exercise jurisdiction, as per his own sweet will. As per the mechanism provided u/s 124 of the Act, the jurisdiction over .....

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of the assessee, on the basis of his territorial jurisdiction. It is also not a case where the ld.Assessing Officer questions the principal place of business declared by the assessee company. Therefore, in the light of expressed provisions of Section 124 and Section 147 of the IT Act, the only officer who could have exercised jurisdiction over the case of the assesse, even for the purposes of issue of notice should be the jurisdictional ITO who is at New Delhi. We, therefore, are of the conside .....

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- Decided against revenue - ITA No. 578/Del/2010 - Dated:- 21-10-2015 - N K Saini, AM And Beena Pillai, JM For the Appellant : Shri S K Jain, Sr. DR For the Respondent : Shri Ved Jain, CA ORDER Per Beena Pillai, Judicial Member The present appeal has been filed by the Revenue, against the order dated 30/11/2009, passed by the Ld. CIT(A) VIII, New Delhi for assessment year 2004-05, on the following grounds:- "1. The order of the Ld. CIT(A) is erroneous and contrary to the facts and law. 2. .....

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." 2. Brief facts of the case as recorded by the Ld. CIT(A) are as under:- 3. The assessee filed its return of income on 30/4/2004 declaring total income of ₹ 1,86,100/- on the basis of information received from the DIT Investigation. The Ld. Assessing Officer, being ITO Ward-3, Gurgaon issued notice u/s 148 of the Income Tax Act on 11/3/2008. 4. The assessee company was incorporated on 20/6/2003having principle place of business at New Delhi, and F.Y 2003-04 was the first year of its .....

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) dated 12/11/2008 was issued by ITO Ward-5(3), New Delhi and also provided with the reasons recorded for reopening the assessment on 08.12.2008. The jurisdictional A.O proceeded to complete the assessment u/s 147 read with 143(3) of the Income Tax Act vide his order dated 30/12/2008. In the assessment proceedings, the Ld. A.O also made certain additions u/s 69 of the Income Tax Act amounting to ₹ 90 lacs. 5. Aggrieved by the order of the Ld. A.O, the assessee preferred an appeal before th .....

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gaon was without jurisdiction. The Ld. CIT(A), quashed the assessment proceedings and held the subsequent actions including issuance of Section 143(2) and passing of the order u/s 147 read with 143 (3) as void ab initio. The Ld. CIT(A) held that Section 292 BB of the Act cannot be applied to the facts of the assessee s case on two grounds. • Firstly, the provision of Section 292 BB have been applied w.e.f 1/4/2008, and not retrospectively, as held by Hon ble Special Bench of ITAT, Delhi in .....

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tion 147 and complete the assessment on the basis of a consent given by the assessee company. 6. The Ld. CIT(A) in Para 3.6 obsers as under:- "3.6 There is one more aspect which merits discussion at this stage. a stated earlier, even before receiving assessee s reply on 5/12/2008 wherein, as per the A.O, the appellant company had given its no objection for continuing the assessment proceedings, the ITO Ward-5 (3), New Delhi, had issued a notice u/s 143(2) on 3/7/2008. Now the question is wh .....

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to notice u/s 148 or even without getting return of income filed suo moto on 30/4/2004, regularized." 7. The Ld. CIT(A), therefore, annulled the assessment made in terms of 147 read with 143(3) of the Act. 8. Aggrieved by the order of the Ld. CIT(A) the Revenue is in appeal before us. 9. The Ld. DR supports the orders of the Ld.CIT(A) A.O. He submitted that the notice issued u/s 148 by the ITO Ward-3, Gurgaon was received by the assessee, and thereafter, the assessment has been transferred .....

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12. The undisputed position in the present case is that, while the return of income was filed by the appellant company with the jurisdiction of DCIT Circle-5(1), New Delhi, the notice u/s. 148 read with Section 147 of the Act was issued by the ITO Ward-3, Gurgaon on 13/3/2008. Further, the assessment has been completed by yet another officer, being ITO-5 (3), New Delhi on 30/12/2008. 13. The only issue before us is as to whether, the ITO Ward-3, Gurgaon was competent to exercises the jurisdicti .....

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ncome………………" 15. Similarly, Section 124 of the IT Act defines the jurisdiction of the AOs in the following manner:- " Jurisdiction of Assessing Officer Whereby virtue of any direction or order issued under sub-section (1) or sub-section (2) of Section 120, the Assessing Officer has been vested with jurisdiction over any area, within limits of such area, he shall have jurisdiction- (a) In respect of any person carrying on a business or professio .....

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Chief Commissioner of the Commissioner where the question is one relating to areas within the jurisdiction of different Director Generals or Chief Commissioners or Commissioner concerned or , if they are not in agreement, by the Board or by such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, specify. (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer - (a) Where he has made a return [unde .....

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nder Sub-Section 115WH or under 148 or under Section 148 for the making of the return or by the notice under the first proviso to Section 115WF of under the first proviso Section 144] to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer , whichever is earlier." 16. From the discussion, it may be seen that the words used in Section 147 of the Act are " the Assessing Officer " and which clearly means a particular officer who h .....

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risdiction over company assessee. Since, this is a case where the assessee had actually filed a return of income with the DCIT, Circle 5(1), New Delhi, on 30/4/2004, the Income Tax Officer, Ward 3, Gurgaon, could not have exercises jurisdiction over this case of the assessee, on the basis of his territorial jurisdiction. It is also not a case where the ld.Assessing Officer questions the principal place of business declared by the assessee company. Therefore, in the light of expressed provisions .....

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vision of Section 292BB will not be applicable in the present case as it is not a case of a service/defective service, etc. Provisions of section 292BB reads as under: "292BB. Notice deemed to be valid in certain circumstances:- [Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in ti .....

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hat this provision is regarding service of the notice. In the case of reassessment u/s 148 the AO having jurisdiction has to record reasons and also issue notice u/s 148. Thus both the conditions of recording reasons and issue of notice are to be satisfied. In the section 292BB there is no reference regarding recording of reasons. Thus in the absence of reasons being recorded by AO having jurisdiction, the reassessment proceedings will be void abinitio. 20. Further, 292BB cannot confer jurisdict .....

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ssessment year 2001-02. 21. Allahabad High Court in the case of CIT & Anr. Vs. Mukesh Kumar Agrawal 345 ITR 29 (All) has dealt with the provisions of Section 292BB of the Act. In this case the revenue raised a contention that in view of the provisions of Section 292BB, the assessment cannot be quashed in case notice u/s 143(2) has not been issued. The Allahabad High Court has rejected the contention and has held as under:- "Section 292BB is a rule of evidence, which validates the notice .....

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se, the Tribunal has returned the findings that the notice under section 143(2) of the Act was admittedly not issued in this case. The assessing authority thus did not have jurisdiction to proceed further and make assessment. We do not find that the non-consideration of section 292BB, which is rule of evidence, and a deeming provision to validate the notice in certain circumstances, will have any effect on the judgment in Hotel Blue Moon (2010) 321 ITR 362 (SC). It was held in Hotel Blue Moon s .....

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