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2019 (9) TMI 385

..... he aforesaid ITO, Ward-33(4), New Delhi. It is further not in dispute that on 30.10.2007 the return was also processed in the jurisdiction of ITO, Ward-33(4), New Delhi, u/s 143(1) - no valid order by any Competent Authority was in existence on 31.03.2014 transferring the jurisdiction of the assessee from ITO, Ward-33(4), New Delhi to ITO, Ward-24(3), New Delhi. In any case, by transferring the assessment records of the assessee to Circle-33(1), New Delhi on 19.08.2014 the aforesaid ITO, Ward-24(3), New Delhi has already, by necessary implication, admitted in effect that the jurisdiction over the assessee did not vest in Ward-24(3), New Delhi. ITO, Ward-24(3), New Delhi lacked jurisdiction to issue aforesaid notice u/s 148 dated 31.03.2014 for initiation of proceedings u/s 147 of the Act. If an Assessing Officer issued a notice to an assessee u/s 148 of the Act for initiating proceedings u/s 147 of the Act, without having jurisdiction over the assessee; such a notice is void ab initio, and an assessment order passed in consequence thereof is non est, devoid of any legal force. - Decided in favour of assessee - ITA No:- 6553/Del/2016 - 6-9-2019 - Shri Amit Shukla, Judicial Member An .....

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..... tax Act. In this connection, the main objection raised by your AR is on the ground that the assessee has been filing his income tax return with ITO, Ward 33(1), New Delhi and that this office has no jurisdiction to issue the Notice u/s 148 of the Income Tax Act. In this connection, your goodself is informed that the notice u/s 148 of the Income tax Act was issued after obtaining prior approval of the competent authority in terms of relevant section of the Income tax Act. Further, the territorial jurisdiction over the Sainik Farm Area, where the assessee resides falls in this Ward and as per section 124(1)(b), the notice was rightly issued by an officer who is competed to do so. Thus, the notice u/s 148 has been issued by an assessing officer who is competed to do so. Thus, the notice u/s 148 has been issued by an assessing officer who is competent to do so. Accordingly, there is no merit in the objections so raised and the same are hereby dismissed. You are directed to file your return of income immediately in terms to provisions of section 148 of the Income tax Act. [B.1]. The assessee petitioned vide letter dated 20.08.2014 of Joint Commissioner of Income tax, Range-24, New Delh .....

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..... on where an assessee will simultaneously fall under the jurisdiction of two assessing officers. The Ld. ITO's action of justifying his jurisdiction over the assessee on the basis of Section 124(1)(b) leads to precisely such a situation and is thus incorrect. 3. Even Section 124(5) of the Income Tax Act does not come to the aid of the Department to allow jurisdiction over the assessee to Ward 24(3) as such section has limited application in cases where the income tax officer and the assessee are completely localized in a particular area and the income is also earned in such area and nowhere else. This has been ruled by the jurisdictional Delhi High Court in the case of Kanjimal & Sons Vs,. CIT (138 ITR 039-Del). On the basis of the above it is contended that the Ld. ITO, Ward 24(3) had no jurisdiction over the assessee and thus was not his 'assessing officer' who had authority to issue a notice U/s 143 upon him. Thus, as the notice is without authority and lacked proper sanction, the same is invalid and non est. Therefore it is requested that the assessment proceedings U/s 148 initiated upon the assessee vide such notice be cancelled and ought to be dropped. [B.2]. I .....

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..... 148. 7. It is once again requested that before proceeding further, you may please supply 'reasons' recorded by ITO Ward 24 (3) before issuing notice u/s 148 dated 31.3.2014. [B.3]. Eventually, assessment order was passed by ITO, Ward-51(2), New Delhi wherein an addition of ₹ 66,50,000/- was made on account of unexplained loan deemed as income of the assessee u/s 68 of the Act. Aggrieved, the assessee filed appeal before Ld.CIT(A). In the appeal filed by the assessee before Ld.CIT(A), the assessee, inter alia, took grounds against exercise of jurisdiction u/s 147 r.w.s. 148 of the Act, assumed by ITO, Ward-24(3), New Delhi vide aforesaid notice issued on 31.03.2014 u/s 148 of the Act. These grounds were rejected by Ld.CIT(A) vide para 4.1 of his appellate order dated 20.10.2016. The relevant portion of the order of Ld.CIT(A) is reproduced for ease of reference:- 4.1. I have carefully considered the facts and circumstances of the case and also the submission of the appellant but I do not find any force in the argument of appellant. The fact remains that as per territorial jurisdiction over the Sainik Farm area where the appellant was residing fails under the jurisdicti .....

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..... d 24(3) for providing the copy of reason recorded 5. Assessee filed 'Objections dt. 28.04.2014 with AO ward 24(3) on jurisdiction along with return for last three year 6. Assessee letter dated 01.05.2014 before the AO along with copy of letter dated 28.04.2014 challenging of jurisdiction of AO ward 24(3). 7. Notice u/s 142(1) dated01.05.2014 issued by AO Ward 24(3) 8. Assessee letter dated 13.05.2014 before AO Ward 24(3) annexing copy of letter dated 28.04.2014 challenging jurisdiction (Sr. No. 5) 9. Assessing Officer Ward 24(3) Order dated 01.08.2014 rejecting objection. 10. Assessee petition dated 25.08.2014 before JOT Range 24 for determination of jurisdiction over the assessee annexing Return for last three years filed with ITO Ward 33(4) New Delhi. Notice dt. 31.03.2014 u/s 148 Objections dated 28.04.2014 filed with AO Ward 24(3) (Sr. no. 5) Assessing officer Ward 24(3) order dated 01.08.2014 rejecting objections (Sr. no. 9) 11. Notice u/s 142(1) dated 30.10.2014 issued by ACIT Circle 51(1) for first time. 12. Assessee reply dated 18.12.2014 before ACIT 51(1) New Delhi along with Return, balance sheet and profit and loss account 13. Notice u/s 143(2) dated 18.12.2014 issue .....

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..... he record. It is not in dispute that the jurisdiction over the assessee vested in ITO, Ward-33(4), New Delhi, at the time when [on 31.03.2014] the aforesaid ITO, Ward-24(3), New Delhi issued the aforesaid notice dated 31.03.2104 under section 148 of the Act for initiating proceedings u/s 147 of the Act. It is also not in dispute, that original return was field by the assessee on 30.10.2007 with the aforesaid ITO, Ward-33(4), New Delhi. It is further not in dispute that on 30.10.2007 the return was also processed in the jurisdiction of ITO, Ward-33(4), New Delhi, u/s 143(1) of the Act. It is furthermore not in dispute that no valid order by any Competent Authority was in existence on 31.03.2014 transferring the jurisdiction of the assessee from ITO, Ward-33(4), New Delhi to ITO, Ward-24(3), New Delhi. In any case, by transferring the assessment records of the assessee to Circle-33(1), New Delhi on 19.08.2014 the aforesaid ITO, Ward-24(3), New Delhi has already, by necessary implication, admitted in effect that the jurisdiction over the assessee did not vest in Ward-24(3), New Delhi. In view of these facts, we are of the view that ITO, Ward-24(3), New Delhi lacked jurisdiction to iss .....

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