TMI Blog2020 (12) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee are clearly in mess. On a careful consideration of the matter hold that the assumption of jurisdiction u/s. 147 by the AO is without reasons record and proper service of notice u/s. 148 of the Act and is bad in law and reassessment proceedings and all consequent orders including reassessment order are consequently liable to be quashed. Appeal of the assessee is allowed - ITA No.315/CTK/2017 - - - Dated:- 17-12-2020 - Shri Chandra Mohan Garg, Judicial Member For the Assessee : Shri B.Panda, Sr Adv For the Revenue : Shri Subhendu Dutta, DR ORDER This is an appeal filed by the assessee against the order of the CIT(A)-2, Bhubaneswar dated 27.2.2017 for the assessment year 2012- 13. 2. The appeal is time barred by 08 days. The assessee has filed condonation petition dated 16.8.2017 supported by affidavit stating the reasons for filing the appeal belatedly. After considering the submissions of the parties and condonation petition, I am satisfied that the assessee was prevented by sufficient cause for filing the appeal late. Hence, I condone the delay of 8 days and admit the appeal for adjudication. 3. The assessee has filed the following grounds of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee submitted that the additional ground being legal in nature, may be taken up first, because in the event of this additional ground of appeal being admitted, and being decided in favour of the assessee, all other grievances raised in the original grounds will be rendered infructuous. Ld counsel for the assessee submitted that these grievances raised in the additional grounds were not raised before the authorities below, but contends that the assessee s failure to do so does not affect his legal rights to raise the above legal pleas before the Tribunal. Reliance is placed on Hon ble Supreme Court judgment in the case of NTPC vs. CIT, (229 ITR 383). It is submitted that the additional ground of appeal pertains to a purely legal ground and all the material facts, necessary for its disposal, are already on record. It is not disputed that this grievance was not raised before the authorities below but reliance is placed on the decision of Hon ble Bombay High Court in the case of Inventors Industrial Corporation Ltd Vs CIT, 194 ITR 548 (Bom) in support of the proposition that a ground by which the jurisdiction to make assessment itself is challenged can be urged before any of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO -2(4) on 30.1.2014 got recorded in the order sheet to the ITO -3(4), then the notice u/s.142(1) of the Act issued on 15.4.2014 fixing the date of hearing on 25.4.2014 by the ITO Ward 2(4) was illegal since it had no jurisdiction to hold the assessment which had gone before that to the ITO Ward 3(4) then the notice issued got invalid to enforce the proceedings. Ld A.R. submitted that no service of notice u/s.148 was made to enforce the assessee for filing the return of income. 9. Ld A.R. further submitted that from the above facts, it was apparent that the requirements of mandatory section 147 of the Act was not satisfied. Consequently, in absence of any satisfaction having been recorded by the AO that income has escaped assessment by reasons of the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration, assumption of jurisdiction u/s.147 of the Act was failure and, therefore, the impugned notice u/s.148 and all consequent orders cannot be sustained. It was thus submitted by ld counsel for the assessee that reopening of assessment should be held to be bad in law as the AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment proceedings. If she had any objection, she could have raised in the course of assessment proceedings to be disposed by the AO, as has been held by Hon ble Supreme Court in the case of GKN Driveshafts ( India ) Ltd vs ITO (123 Taxman 802). Ld D.R. submitted that since the assessee has appeared and co-operated with the proceedings before the AO, as is evident from the order sheet produced before the Bench, in terms of section 292 BB of the Act, she cannot raise a fresh objection after completion of the assessment. He further submitted that the grounds regarding reasons recorded and nonservice of notice was not raised before the first appellate authority and, therefore, the assessee cannot file the same as an additional ground before the Tribunal. 12. In rejoinder, ld A.R. submitted that before the issue of notice u/s.148 of the Act, the AO should have recorded the reasons for initiating reassessment proceedings. He further referred to the decision of Hon ble Bombay High Court in the case of PCIT vs Tata Sons Limited, ( 2019) 267 Taxman 13 (Bom.)(HC), wherein, it was held that issue of notice prior to recording of reasons for reopening of assessment is held to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of assessment u/s.147 of the Act is justified without recording satisfaction by the Assessing officer. The assessee in this case has challenged the jurisdiction of the Assessing Officer for taking up action u/s.148 of the Act. 15. The contention of the department is that the assessee has furnished several addresses of the assessee while applying PAN, filing income tax returns and subsequently changing her addresses, etc. Therefore, notice u/s.148 and also statutory notice u/s.142(1) were issued to the assessee as per the given addresses. In response to said notices, the assessee personally appeared and participated in the assessment proceedings as well as filed written submissions. Therefore, it cannot be said that the assessee had not received any notice(s) in connection with the assessment proceedings. He submitted that the assessee is frequently changing her address, as is evident from acknowledgement of return, hence, the department was forced sent the notices in various address furnished to the department and it is proved that when the assessee has participated the proceedings, then it is vividly clear that the assessee has received the notices. 16. Before reopening t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held as under: The jurisdiction under section 147/148 of the Act is an extraordinary jurisdiction and can only be exercised when condition precedent as provided in sections 147/148 of the Act are satisfied. It is the appellant s case that the aforesaid conditions are not satisfied inasmuch as in the absence of the AO having the original return of income available it would not be possible for him to have a reasonable belief that income chargeable to tax has escaped assessment. This issue of jurisdiction according to the respondent revenue could only have been raised before the AO and not having been raised before him, the appellant had waived its rights to raise the same. The appellant having submitted to the jurisdiction of the AO cannot now challenge the same. This is not entirely correct. It is well settled that mere acquiescence will not give jurisdiction to an authority who has no jurisdiction. In fact this Court in CIT vs ITSC A Ors (2014) 365 ITR 87 (Bom) has held that mere participation by a party in proceedings without jurisdiction will not vest/confer jurisdiction on the authority. Reason to believe that income chargeable to tax has escaped assessment is a jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me should have a reference in the reasons recorded which will have to be the basis for reopening. The AO is expected to deal with the assessee s objection vis a vis the reasons recorded and not to any external material. 23. In CIT vs. Eshaan Holding P. Ltd. (supra), it is held that before issue the notice u/s. 148 of the Act, it is expected of the AO to have checked up if there is any change of address because valid service of notice of reopening the assessment is a jurisdictional matter and this is a condition precedent for a valid reassessment. Further, though the correct address of the assessee has been constantly mentioned in the return of income quite for a long time. However, notice was not sent to such address, as a result of which reassessment proceedings and notice u/s. 148 read with Section 147 is illegal, bad in law and without jurisdiction. 24. The Hon ble Allahabad High Court in the case of Mithlesh Kumar Tripathi Vs CIT [2006] 280 ITR 16 (All), is very relevant. It was, inter-alia, held in this case that the reasons recorded under section 148(2) of the Act, must be communicated to the assessee along with the notice under section 148, in view of the principles of ..... 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