TMI Blog2021 (9) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... quested the Income Tax PAN Services Unit to change his address from Swaroop Nagar, Kanpur to Tilak Nagar and it was accepted also and was conveyed to the assessee by the Income Tax Service Unit and copy of such application and its acceptance. On this acceptance letter the date of change is not mentioned however the fact remains that assessee had filed application for change of address on 17.11.2012 and Form No. 26AS generated by Income Tax Department also contains the new address which means that the department had taken note of the new address and the new address also falls within the jurisdiction of Assessing Officer Ward- 3(1). Therefore, the notice u/s. 143(2) of the Act should have been issued by the AO having jurisdiction over the assessee which has not been done and similarly the orders should have been passed by the same AO who had issued notice u/s. 143(2) - Decided in favour of assessee. - ITA No. 319/Lkw/2018 - - - Dated:- 17-8-2021 - Shri T.S. Kapoor, Accountant Member For the Appellant : Shri Rakesh Garg, Advocate For the Respondent : Shri Harish Gidwani, DR ORDER This is an appeal filed by the assessee against the order of ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Income Tax Officer-3(5) on 05/12/2014 and in this respect filed copy of PAN data record of assessee and therefore, he argued that the notice was rightly issued by Assessing Officer Ward-1(1) as the PAN was laying with him. It was submitted that the order passed by Assessing Officer, Ward 3(5) is in continuation of notice u/s. 143(2) of the Act issued by Assessing Officer, Ward 1(1) and therefore it was prayed that the ground taken by assessee be dismissed. 3.1 In the rejoinder it was submitted that very fact that Assessing Officer who had issued notice u/s. 143(2) of the Act dated 03.09.2014 transferred the case record on 09.09.2014 to Assessing Officer, Ward-3(1) itself proves that the jurisdiction over the said case was not with Assessing Officer 1(1) of the Act but was always with Assessing Officer, Ward-3(1), and therefore, in view of no notice u/s. 143(2) by Assessing Officer, Ward 1(1) or Ward 3(5) the assessment order is bad in law. 4. I have heard the rival parties and have gone through the material placed on record. I find that it is undisputed fact that the notice u/s. 143(2) of the Act was issued by ITO, Ward-1(1) which fact is apparent from the copy of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, the return of income was furnished on 30.09.2013. The financial year in which the return was filed expired on 31.03.2014 and therefore, last date for issue of notice was 30.09.2014. The statutory period for issuance of notice u/s 143(2) expired on 30.09.2014 and by 30.09.2014 the notice u/s 143(2), which was within the prescribed period of time, was issued only by DCIT-IV, Kanpur who had no jurisdiction over the case, as the DCIT-IV himself had transferred the case to DCIT-2, Kanpur vide memo dated 20.08.2015, a copy of which is placed at paper book Page 3. Therefore from the above facts and circumstances, it become apparent that the first Assessing Officer who issued notice on 30.09.2014 had no jurisdiction to assess the assessee and, therefore, he transferred the case to DCIT-2, Kanpur who though had jurisdiction to assess the assessee but issued notice u/s 143(2) only on 07.09.2015 by which date period for issuance of notice had expired. We further find that no order u/s 127 of the Act was passed by the Assessing Officer to transfer the case from Kanpur-4 to Kanpur-2. The Assessing Officer who had jurisdiction to assess the assessee issued notice u/s 143(2) only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for Assessee submitted that notice issued by Competent Authority for initiating reassessment proceedings is a jurisdictional step. An invalid or illegal notice will vitiate entire reassessment proceedings. Section 292BB will not help Revenue in this matter. Entire reassessment proceedings made by transferee A.O., who did not issue any fresh notice under Section 148 of Act, 1961, are illegal and has rightly been set aside by Tribunal. 4. Before considering rival submissions, we may place on record brief factual matrix giving rise to above dispute. 5. For A.Y. 201011, Income Tax Department received AIR information from Punjab National Bank, Lucknow (hereinafter referred to as PNB ) stating that Assessee has deposited cash of ₹ 70,19,000/in Financial Year (hereinafter referred to as F.Y. ) 200910 in his bank account. In order to verify source of deposit, a nonstatutory notice dated 25.08.2011 was issued by ITOIV( 1), Lucknow requiring Assessee to file details. Shri R.U. Khan, Advocate appeared and filed reply but details were insufficient. Consequently, after recording reasons for initiating proceedings under Section 147 of Act, 1961, a notice under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 148 of Act, 1961 which was mandatory, being a jurisdictional step. Earlier notice issued by an authority having no jurisdiction would vitiate the entire proceedings as said notice issued by an incompetent Authority will not be a valid notice under Section 148 of Act, 1961. 13. Learned counsel appearing for Assessee contended that relevant A.Y. is 201011 which ended on 31.03.2010. Even if, no Return is filed within time specified under Section 139(1) of Act, 1961, still Assessee could have filed Return under Section 139(4) of Act, 1961 upto 31.03.2012, i.e., before expiry of one year from the end of relevant A.Y. Return was actually filed by Assessee on 17.02.2012, hence it was within the ambit of Section 139(4) of Act, 1961. Though, there was sufficient time to file Return and even time for issue of notice under Sections 142(1) and 143(2) of Act, 1961 making assessment under Section 143(3) of Act, 1961 was subsisting, a notice under Section 148 of Act, 1961 was issued through speed post on 18.11.2011 by ITOIV( 1), Lucknow who had no jurisdiction over Assessee. It shows that Section 148 of Act, 1961 was invoked as if it is a substitute of Section 142 of Act, 1961 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the time allowed under a notice issued under Section 142(1), may furnish return for any previous year at any time before expiry of one year from the end of relevant A.Y. or before completion of assessment, whichever is earlier. 19. A notice under Section 142(1) can also be issued to a person who has made a Return under Section 139, requiring to produce such accounts or documents as A.O. may require. For the purpose of exercising power under Section 142(1), before issuing notice, A.O. must be satisfied that the documents needed for the purpose of making assessment, have some bearing on the pending assessment. 20. This Court in Juggilal Kamlapat Cotton and Spinning and Weaving Mills Co. Ltd. Vs. ITO 1983 (142) ITR 710 (Alld) has observed that arriving at such a satisfaction is a part of jurisdictional fact so that A.O. acquires jurisdiction to issue a notice under Section 142(1) for production of any document only, if, after application of mind, he arrived at a conclusion that documents directed to be produced would have a bearing on the assessment and he requires the same for making assessment. 21. Where a Return has been filed under Section 139 or in respons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke inquiry. Thereafter, said Designated Officer was supposed to furnish entire material to Competent A.O. for further action. 28. In the present case, notice under Section 148 was not issued by A.O. having jurisdiction over Assessee and instead it was issued by Designated Officer authorized to collect AIR information and make inquiry in this regard. No notice was issued under Section 148 admittedly by Jurisdictional A.O. 29. Section 148 clearly talks of issue of notice by A.O. Meaning thereby, A.O. having jurisdiction over Assessee. In fact, it is his satisfaction which is to be recorded for justifying reopening of assessment/reassessment proceedings as contemplated under Section 147 and recording of reasons for the same purpose is mandatory. The satisfaction of A.O. could not have been hired or be delegated to any other authority. 30. In Commissioner of Income Tax, Kerala Vs. Thayaballi Mulla Jeevaji Kapasi 1967 (66) ITR 147 (SC), Court held that notice under Section 148 cannot be regarded as mere procedural requirement. It is a condition precedent for initiation of proceeding for assessment. 31. In Y. Narayana Chetty and another Vs. Income Tax Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the present case, no valid notice under Section 148 was issued by Jurisdictional A.O. before making assessment/reassessment and, therefore, proceedings of reassessment pursuant to notice issued under Section 148 by an incompetent Officer are void and Ab initio. 40. When a notice under Section 147/148 issued is a jurisdictional step, it cannot be treated to be mere irregularity curable under Section 292BB. In fact, Section 292BB has no application to a case where no valid notice has been issued by Competent A.O. This is clear from a bare reading of Section 292BB of Act, 1961 which reads as under: 292BB. Where an assessee has appeared in any proceedings 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 time in accordance with the provisions of this act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this act that the notice was- (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49. In Mir Iqbal Husain Vs. State of U.P. 1963 (50) ITR 40, it was held that requirement of valid notice cannot be waived. The mere fact that Assessee filed Return of Income pursuant to invalid notice would not render notice valid or validate subsequent proceedings which are vitiated in law for want of valid notice. 50. In Raza Textile Ltd. Vs. Income Tax Officer, Rampur (1973) 87 ITR 539 (SC), Court said that it is incomprehensible to think that a quasijudicial authority like A.O. can erroneously decide a jurisdictional fact and thereafter proceed to impose a levy on a citizen. 51. If an order is passed by a judicial or quasijudicial authority having no jurisdiction, it is an obligation of Appellate Court to rectify the error and set aside order passed by authority or forum having no jurisdiction. This is what was held in State of Gujarat Vs. Rajesh Kumar Chimanlal Barot and another AIR 1996 SC 2664. 52. In view of above discussion, we have no manner of doubt to answer all the four questions against Revenue and in favour of Assessee. 53. Therefore, appeal lacks merit. Dismissed. 7. In view of the above facts and circumstances and judicial precede ..... X X X X Extracts X X X X X X X X Extracts X X X X
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