TMI Blog2016 (3) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... d at Makanpur, Loni which was detected during the course of assess ment proceedings under section 143(3) for the assessment year 2008-09. 2. The learned Commissioner of Income-tax (Appeals) has erred in law and on facts in annulling the assessment without appreciating the fact that the assessee deliberately filed his return of income in territorial jurisdiction whereas the jurisdictions/as with the Income-tax Officer-5(4), Kanpur and the assessment for the assessment year 2008-09 was completed by the Income-tax Officer-5(4), Kanpur. 3. The learned Commissioner of Income-tax (Appeals) has erred in law and on facts in annulling the assessment without appreciating the fact that the assessee did not raise any objection regarding the jurisdiction of case during the course of assessment proceedings. 4. The learned Commissioner of Income-tax (Appeals) has erred in law and on facts in annulling the assessment on the ground that the notice under section 148 was issued during the pendency of regular assessment proceedings and only notice under section 143(2) could have been issued and notice under section 148 is without jurisdiction ignoring the fact that the Act does not debar the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal before the learned Commissioner of Income-tax (Appeals) with the submission that the Income-tax Officer- 5(4), Kanpur was not having jurisdiction over the assessee during the assessment years 2009-10 and 2010-11, therefore, the reopening by an Officer, having no jurisdiction over the assessee, is bad in law and, therefore, notice issued by the Assessing Officer deserves to be quashed. The learned Commissioner of Income-tax (Appeals) re-examined the claim of the assessee and being convinced with it, he was of the view that reopening was done by an officer having no jurisdiction over the assessee, therefore, the reopening was not valid and he accordingly annulled the assessment framed consequent to the bad reopening. 4. Aggrieved, the Revenue is in appeal before the Tribunal and placed heavy reliance upon the order of the Assessing Officer ; whereas learned counsel for the assessee, besides placing reliance upon the order of the learned Commissioner of Income-tax (Appeals), has contended that so long as the assessee had only salary income, the jurisdiction over the assessee lies with the Income-tax Officer-5(4), Kanpur and once he retired and was having income from other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrect Assessing Officer on account of change of jurisdiction, the assessee cannot be held responsible for any mistake or error on the part of the Department. It is also undisputed fact that at the relevant point of time when the notice under section 148 of the Act was issued by the Income-tax Officer-5(4), Kanpur, the jurisdiction over the assessee was changed and it was with the Income-tax Officer-3(2), Kanpur, therefore, notice under section 148 of the Act was issued by an Officer having no jurisdiction over the assessee. The learned Commissioner of Income-tax (Appeals) has examined this aspect in detail in the light of the detailed facts placed before him. We, therefore, reproduce the findings of the learned Commissioner of Income-tax (Appeals) as under : I have considered the facts and circumstances of the case and have gone through the written submissions as filed by the authorised representative. The undisputed facts are that the assessment for the assessment year 2008-09 was framed under section 143(3) on August 12, 2010 by the Income-tax Officer-5(4), Kanpur by which time, the Income-tax returns for the assessment years 2009-10 and 2010-11 had already been filed on Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 2009-10 was not filed in the office having jurisdiction over the same and on failure to file the return in the respective jurisdiction, in this case ward 5(4), the return filed in ward 3(2), would be non est and invalid. In the present case not only the assessee filed his return in ward 3(2), Kanpur but the Income-tax Officer-3(2) also knowing well that the jurisdiction over the said case was with the Income-tax Officer- 5(4), Kanpur processed the return under section 143(1) of the Act 1961 and created a demand of ₹ 34,140. By processing the returns under section 143(1). The Income-tax Officer-3(2) accepted the return as filed by the assessee 'as a valid return'. The Income-tax Officer-5(4) while completing the assessment under section 143(3) for the assess ment year 2008-09 on August 12, 2010 was well aware of the fact that the returns for the assessment years 2009-10 and 2010-11 had been filed with the Income-tax Officer-3(2). Even then the Income-tax Officer-5(4) did not raise any objection to the processing of the return by the Income-tax Officer-3(2) by calling for the same from the Income-tax Officer-3(2) or requesting the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and the reassessment is annulled. The second limb of the argument that notice under section 142(1) should have been issued instead of notice under section 148 also appears to be logical ; there is no specific bar to the same, but at the same time the procedure as laid down has to be strictly followed. Both provisions call for filing of the return. Section 142(1) seeks to call for the return when the same has not been filed within the time allowed as per section 139(1) whereas section 148 is invoked when the income has escaped assessment. Earlier there remained a controversy that the provisions of sections 142(1) and section 148 were in conflict with each other. The Delhi Special Bench in the case of Motorola Inc v. Deputy CIT [2005] 95 ITD 269 (Delhi) [SB], held that notice under section 142(1) could be issued any time before the end of the assessment year. In other words section 147/148 would come into play as soon as the relevant assessment year ended. To resolve this controversy the Finance Bill, 2006 made it specifically clear that the notice under section 142(1) could be issued any time up to the date of limitation for completion of assessment as laid down in section 153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Sharma and Sohan Pai. This again is factually incorrect. The land in question has been sold to Ultrahome Construction Pvt. Ltd. and not to Shri G. K. Sharma or Sohan Pal. Besides there cannot be escapement of income merely because there is a difference between the stamp duty value as assessed by the stamp duty authority (SVA) and the consideration as received by the assessee. The cost of acquisition and improvement, if any has to be considered and deducted from the estimated value/ actual consideration received. The Assessing Officer has taken the difference between the two, i.e., stamp duty value and the actual consideration received as the income escaped, without considering the initial cost of acquisition and also the cost of acquisition as per cost inflated index. The escapement of income can be said to have taken place only when the above exercise has been undertaken. Then again when the Income-tax Officer-5(4) has not seen the return of income filed by the assessee, the return was with the Income-tax Officer-3(2) how can he conclude that the assessee has failed to disclose income from capital gains on sale of agricultural land. In absence of the return before the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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