TMI Blog2022 (8) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... ducherry, but not with the ITO., Ward-1(1), Puducherry. Therefore, when the ITO, Ward-1(1), Puducherry does not have jurisdiction over the assessee, he ought not to have issued notice u/s.148 of the Income Tax Act, 1961. Having issued notice u/s.148 and transferred case to jurisdiction officer, the ITO, Ward-4(1), the incumbent Assessing Officer should have started case by issue of fresh notice u/s.148 or section 143(2) of the Act or notice u/s.129 of the Act to assume jurisdiction on change of incumbent of office. In this case, the Assessing Officer, who completed assessment u/s.144 r.w.s 147 of the Act has not issued any notice and thus, assessment framed on the basis of 148 notice issued by non-jurisdiction officer is invalid and liable to be quashed. Hence, we quash reassessment order passed by the Assessing Officer u/s.144 r.w.s147 of the Income Tax Act, 1961, dated 10.03.2016. Assessee appeal allowed. - I.T.A. No. 904/Chny/2019 - - - Dated:- 29-7-2022 - SHRI V. DURGA RAO , JUDICIAL MEMBER AND SHRI G. MANJUNATHA , ACCOUNTANT MEMBER Appellant by : Mr. R.Venkata Raman , ACA Mr . Deepak Jain , FCA Respondent by : Mr. Sajit Kumar , JCIT ORDER PER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nullity in law. 8. The CIT (Appeals) failed to appreciate that there was no proper opportunity given before passing of the impugned order as well as before completing the re-assessment and any order passed in violation of the principles natural justice would be nullity in law. 9. The CIT (Appeals) failed to appreciate that the ex-parte order of reassessment was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law and ought to have appreciated that the procedure prescribed by the Apex Court in the case reported in 259 ITR 19 was not followed admittedly while there was absolutely no material to justify the assumption of jurisdiction u/s 147 of the Act, thereby vitiating the findings in para 6.6 of the impugned order. 3. The assessee has also filed a petition for admission of additional grounds vide letter dated 17.05.2022 and relevant grounds of appeal taken by the assessee are reproduced as under:- I. The notice uls.148 dated 10.09.2014 issued by the Income Tax Officer, Ward- 1(1) Pondicherry is bad in law and consequently order of assessment dated 10.03.2016 passed u/s.144 r.w.s 147 is void ab initio. 2. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e challenging validity of 148 notice issued by the Assessing Officer in light of provisions of section 124, 127 and 129 of the Income Tax Act, 1961, and we find that grounds taken by the assessee are purely legal grounds, which goes to root of the matter in questioning jurisdiction of the Assessing Officer to assess income of the assessee and said grounds can be taken up for first time at any time of proceedings, including proceedings before the Tribunal as held by the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT (supra). Therefore, we are of the considered view that additional grounds filed by the assessee needs to be admitted and therefore, we admit additional grounds filed by the assessee for adjudication. 7. The first issue that came up for our consideration from additional ground filed by the assessee is validity of 148 notice dated 10.09.2014 issued by the Income Tax Officer, Ward-1(1), Puducherry and consequent assessment order passed u/s.144 r.w.s 147 dated 10.03.2016. The learned A.R. for the assessee referring to notice issued by the Income Tax Officer, Ward-1(1), Puducherry dated 10.09.2014 submitted that notice u/s.148 of the Act f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The learned DR further referring to provisions of section 124(5) of the Act, submitted that as per said provision, every Assessing Officer shall have all powers conferred by or under this Act, on an Assessing Officer in respect of income accruing or arising or received within area, if any, over which he has been vested with jurisdiction by virtue of direction or order issued sub-section (1) or (2) of section 120 of the Income Tax Act, 1961. Therefore, there is no merit in the arguments of the assessee that notice issued u/s.148 of the Act is invalid and consequent proceedings are liable to be quashed. The learned DR has also taken support from the provisions of section 124(3) and submitted that if at all any person needs to question jurisdiction of the Assessing Officer, he shall question said jurisdiction at the first available option, that too within one month from the date on which he was served with notice or before completion of assessment, whichever is earlier. In this case, the assessee never questioned jurisdiction of the Assessing Officer upto the stage of first appellate authority. However, for the first time grounds has been taken to challenge jurisdiction of the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to notice issued u/s.148 of the Act . The Revenue itself has admitted fact that 148 notice was issued by the Income Tax Officer, Ward-1(1), Puducherry. It is also admitted fact that there is no reference to any order from the Board or PCIT, Puducherry, in terms of section 120(1) or 124(1) or 124(2) of the I.T.Act, 1961 for transferring case from Income Tax Officer, Ward-1(1) to Income Tax Officer, Ward-4, Puducherry, by specific order. In fact, the Income Tax Officer, Ward-1(1), Puducherry himself has transferred case to the Income Tax Officer, Ward-4, Puducherry, because jurisdiction over the assessee is clearly vests with the Income Tax Officer, Ward-4, Puducherry. The Revenue had also failed to bring on record any evidence to prove that any notice issued u/s.129 of the Income Tax Act, 1961 for change of incumbent of office at least to prove their case that new officer has assumed proper jurisdiction. In absence of any such details, it can be safely concluded that Income Tax Officer, Ward-1(1), Puducherry does not have any jurisdiction over the assessee and consequently, he cannot issue notice u/s.148 of the Act, 1961 to the assessee. Since, the Assessing Officer, who ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich there would be a total anarchy and any officer positioned at any place may choose to exercise jurisdiction over any assessee. 7. Reference to section 292BB of the Act by the counsel of the revenue would need summary rejection. The said provision guards against any objection to service of notice particularly when an assessee has despite any defective service of notice participated in the proceedings. Such is not the facts in the present case. The present case is where the issuance of notice itself is bad issued by the authority who was not competent. This is a case of defect in issuance of notice and not service of notice. 12. The assessee had also relied upon decision of the Hon ble Gujarat High Court in the case of Pankajbhai Jaysukhal Shah Vs. ACIT (2020) 425 ITR 70 and the Hon ble High Court under identical set of facts held that where reasons for reopening of assessment was recorded by the Assessing Officer, who had jurisdiction over the petitioner, while notice u/s.148 for this purpose was issued by another Assessing Officer, who had no jurisdiction, then said notice was bad on this count. The relevant findings of the Hon ble High Court are as under:- A n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer having jurisdiction over the assessee on the basis of 148 notice issued by non-jurisdictional Assessing Officer in light of provisions of section 124(3) and 124(5) of the Act, we do not find any substance in the arguments advanced by the learned DR for simple reason that section 124(5) deals with powers of the Assessing Officer in respect of income accruing or arising or received within the area, if any, such powers can be derived with by virtue of direction or order issued under sub-section (1) or (2) of section 120 of the Income Tax Act, 1961. If you go by said provisions of the Act, then, case of the assessee clearly lies with the jurisdiction of the ITO, Ward 4, Puducherry, but not with the ITO., Ward-1(1), Puducherry. Therefore, when the ITO, Ward-1(1), Puducherry does not have jurisdiction over the assessee, he ought not to have issued notice u/s.148 of the Income Tax Act, 1961. Further, having issued notice u/s.148 and transferred case to jurisdiction officer, the ITO, Ward-4(1), the incumbent Assessing Officer should have started case by issue of fresh notice u/s.148 or section 143(2) of the Act or notice u/s.129 of the Act to assume jurisdiction on change of incumben ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
