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2017 (3) TMI 1792

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..... as to validate proceedings of assessment if the Assessee had participated. Similar is the view taken by a Full Bench of this Court in Laxmi Narain Anand Prakash Vs. Commissioner of Sales Tax, Lucknow [1980 (1) TMI 212 - ALLAHABAD HIGH COURT] The contention of learned counsel for Revenue that participation of Assessee before Jurisdictional A.O. would operate as acquiescence or waiver and will not invalidate proceedings is thoroughly misconceived. In Abdul Qayume Vs. Commissioner of Income Tax [1989 (12) TMI 37 - ALLAHABAD HIGH COURT] Court said "an admission or an acquiescence cannot be a foundation for assessment where the income is returned under an erroneous impression or misconception of law. It is well settled that a jurisdiction can neither be waived nor created even by consent and even by submitting to jurisdiction, an Assessee cannot confer upon any jurisdictional authority, something which he lacked inherently. Even if, it can be said that Assessee submitted to jurisdiction of A.O., law is that Assessee cannot confer jurisdiction on an authority who did not have the same and we find support from Commissioner of Income Tax Vs. Hari Raj Swarup and sons [1982 (3) TMI 42 - .....

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..... dy issued notice under Section 148, though had no jurisdiction in the matter and transferree authority did not issue any fresh notice, can be said to be valid." 3. Tribunal has found that a notice was issued by designated officer who was authorized to collect Annual Information Return (hereinafter referred to as "AIR") information and to make necessary inquiry, but had no jurisdiction at all of assessment in respect of Assessee in question. Assessee raised objection with regard to validity of notice under Section 148 of Act, 1961 before said designated officer. Thereafter, matter was transferred to concerned Income Tax Officer (hereinafter referred to as "ITO") who had jurisdiction over Assessee. Said Transferee Officer, however, did not issue any fresh notice under Section 148 of Act, 1961, but proceeded from the stage, case was transferred to him, and made reassessment. 4. In these circumstances, Tribunal has held that since very notice under Section 148 of Act, 1961 was illegal, as the notice issuing authority had no jurisdiction, entire subsequent proceedings conducted by transferee Assessing Officer (hereinafter referred to as "A.O.") who had .....

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..... the relevant year. Since Assessee failed to comply with said notice, ITO-IV(1), Lucknow proposed to pass order under Section 144 of Act, 1961 on the basis of material available on record. 11. Case was thereafter transferred to ITO-V(2), Range-V, Lucknow by designated A.O. on 11.04.2012 for the reason that jurisdiction of the case of Assessee was with said Officer and not with ITO-IV(1), Range-IV, Lucknow. 12. Shri K.S. Rastogi, another Advocate, appeared on behalf of Assessee before jurisdictional A.O., and filed acknowledgment of Income Tax Return declaring income of ₹ 2,18,610/- but could not explain deposit of cash of ₹ 70,19,000/- in Saving Bank Account. 13. Assessee was offered opportunities vide notices dated 14.12.2012, 02.01.2013, 05.02.2013 issued under Section 142(1) of Act, 1961 fixing 28.12.2012, 10.01.2013 and 15.02.2013. Still, Assessee failed to comply show cause notices. For non-compliance under Section 271(1)(b) of Act, 1961, a show cause notice was also issued on 05.02.2013. Still Assessee did not cooperate. Hence, a show cause notice for completion of assessment under Section 144 of Act, 1961 was issued on 08.03.2013 fixing case for 15.03.2013. Asses .....

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..... owing cash deposit of ₹ 70,19,000/- in Assessee's Saving Bank Account. Since notice under Section 148 of Act, 1961 dated 18.11.2011 was void having been issued by an Officer having no jurisdiction, further notice issued under Section 143(2) of Act, 1961 by same Officer on 17.02.2012 is also void, ab initio and illegal. 19. Learned counsel for Assessee submitted that ITO-IV(1), Lucknow, admittedly, had no jurisdiction and, before us also, this fact has not been disputed by learned counsel appearing for Revenue. As per letter dated 21.02.2012, issued to various Income Tax Officers, effective from 01.06.2010, Assessee was actually within the jurisdiction of ITO Range-V and not ITO Range-IV. Case was transferred to A.O. having jurisdiction on 11.04.2012. The jurisdictional A.O., however, completed assessment without issuing notice under Section 148 of Act, 1961 on 18.03.2013 adding cash deposits in the income of Assessee. He also issued an order under Section 271(1)(b) of Act, 1961 imposing penalty of ₹ 40,000/-. 20. It is also contended on behalf of Assessee, when alleged AIR information was available at the relevant time for making regular assessment under Section 143 .....

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..... ch claim, etc. and may require Assessee to produce relevant evidence as material to justify such need. 27. Where A.O. does not find any reason to issue notice under Section 143(2), it may make assessment summarily under Section 143(1). The period within which notice under Section 143(2) can be served is during F.Y. in which Return is furnished or within six months from the end of month in which Return is furnished whichever is later. On the date specified in the notice under Section 143(2), or soon or later, A.O. can pass an order in writing accepting or rejecting claims and make an assessment determining total income. 28. Where a person fails to file Return voluntarily or after service of notice, A.O. may proceed to make a best judgment assessment after taking into account all relevant materials which A.O. has gathered. 29. Sections 147 and 148 relates to procedure for reassessment or opening of assessment where A.O. has reason to believe that any income chargeable to tax has escaped assessment for any A.Y. 30. Section 148 provides for issue of notice where income has escaped assessment and A.O. intents to make reassessment or re-computation under Section 147. 31. Looking into the .....

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..... ) 40 ITR 605 (SC), a pari materia provision, i.e., Section 34 under old Indian Income Tax Act, 1922 (hereinafter referred to as "Act, 1922") was considered and it was held that A.O. having power to issue notice should be a particular A.O. having jurisdiction over Assessee at the time of issue of requisite notice. If notice issued by any other A.O. or notice is bad for any reason, than such back assessment would be illegal. 38. In Anirudhsinhji Jadeja and another Vs. State of Gujarat 1995 (5) SCC 302, Court held, if a statutory authority has been vested with jurisdiction he has to exercise it according to its own discretion. 39. In K.K. Loomba and Mrs. Uma Loomba Vs. Commissioner of Income Tax and others 2000 (241) ITR 152 (Delhi) it was held that A.O. having natural jurisdiction over the area would have jurisdiction to assess, issue notice under Section 148 as well and it cannot be done by anyone else. 40. Punjab and Haryana High Court in the case of Lt. Col. Paramjit Singh Vs. Commissioner of Income Tax and another 1996 (220) ITR 446 (Punjab) said "a notice for reassessment can be issued only by A.O. who had concluded the proceedings." 41. We, however, do not g .....

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..... d notice. 47. A similar question was considered in Commissioner of Income Tax, Gujarat-II Vs. Kurban Hussain Ibrahimji Mithiborwala 1972 (4) SCC 394 and Court said "Income Tax Officer's jurisdiction to reopen an assessment under Section 34 depends upon issuance of a valid notice. If notice issued by him is invalid for any reason, entire proceedings taken by him would become void for want of jurisdiction." Court then held that notice was invalid as A.O. had no jurisdiction to revise assessment then it cannot be treated to be mere irregularity so as to validate proceedings of assessment if the Assessee had participated. 48. Similar is the view taken by a Full Bench of this Court in Laxmi Narain Anand Prakash Vs. Commissioner of Sales Tax, Lucknow AIR 1980 ALL 198. 49. The contention of learned counsel for Revenue that participation of Assessee before Jurisdictional A.O. would operate as acquiescence or waiver and will not invalidate proceedings is thoroughly misconceived. 50. In Karnal Improvement Trust, Karnal Vs. Smt. Prakash Wanti and another (1995) 5 SCC 159, Court said that acquiescence does not confer jurisdiction and erroneous interpretation should not be permitt .....

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