TMI Blog2023 (5) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... Judicial Member For the Assessee : Shri Pulkit Saini, Advocate; For the Department : Shri Sanjay Tripathi, Sr. D. R. ORDER PER C. N. PRASAD, J. M. : 1. This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-3 [hereinafter referred to CIT (Appeals)] Gurgaon, dated 30.06.2021for assessment year 2010-11. 2. The assessee in its appeal has raised the following grounds of appeal:- 1. Because the appellant denies its liability to be reassessed at total income of Rs. 24,11,720/- and accordingly denies its liability to pay tax, cess and interest demanded thereon. 2. Because having regard the facts and to circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the impugned reassessment order passed by Ld. AO u/s and that too without assuming 143(3)/147 jurisdiction as per law and without complying the mandatory conditions of section 147 to 151 of the Income Tax Act, 1961. 3. Because in any case and in any view of the matter, action of Ld. CIT (Appeals) in upholding the impugned order is bad in law and against the facts and circumstances of the case and beyond the scope and jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that as per statement given by Sh. H.K. Goel, CA that invoice was sent to their office for calculation of capital gain. However, if a person acquired jewellery from unaccounted source then why the invoices would be sent to anyone for calculation of capital gain and why the appellant would pay tax on sale of unaccounted jewellery. 10. Because having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts that copy of statement given by Sh. H. K. Goel, CA was not provided to the appellant during the course of proceeding. 11. Because having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts that no opportunity of cross examination of Sh. H. K. Goel, CA was provided by Ld. AO. 12. Because having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in Laws and Facts on relying the statement given by Sh. H. K. Goel, CA which is contradictory as first he named Sh. Sushil Garg as the owner of the alleged jewellery and later contended that the alleged invoice was related to Sh. Deepak Garg. Therefore, an addition made entirely on the basis of the statement of third party is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel of the assessee, this ground is not pressed. 4. Briefly stated the facts are that the assessee for the assessment year under consideration i.e. assessment year 2010-11 filed his return of income on 26.07.2010 with Income Tax Officer, Ward-2, Panipat, declaring income of Rs.4,16,715/-. The assessment was completed under section 143(3) of the Act on 27.02.2012 by the Income Tax Officer, Ward-2, Panipat, determining the income of the assessee at Rs.4,76,720/-. Subsequently a search and seizure operation was carried out on 22.06.2016 in the case of M/s. Garg Group of cases and the assessee Shri Deepak Garg was also covered in search. A notice under section 148 of the Act dated 28.03.2017 was issued by the Income Tax Officer, Ward-1, Panipat, stating that income for the assessment year 2010-11 has escaped assessment within the meaning of section 147 of the Act and the assessee was required to furnish return within 30 days. The assessee submitted that the return filed for the assessment year 2010-11 on 26.07.2010 may be treated as return filed in response to notice under section 148 of the Act. Re-assessment was completed under section 143(3) read with section 147 of the Act on 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, the notice under section 148 was not issued by the jurisdictional Assessing Officer. The initiation of assessment proceedings u/s 147 fails on account of issue of a valid notice u/s 148 and assumption of jurisdiction by the jurisdictional Income Tax Officer, making the reassessment void ab initio. Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in the case of Y. Narayana Chetty v ITO [1959] 35 ITR 388 (SC) wherein the Hon'ble Apex Court on the requirement of a valid notice u/s 148 of the Act corresponding to section 34 of the Indian Income-tax Act 1922, has held that: The notice prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be llegal and void. That is the view taken by the Bombay and Calcutta High Courts in Commissioner of Income-tax v Namsukh Moli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 646 (Del)]. Therefore, it is respectfully submitted, in the instant case also, the issue of notice u/s 148 of the Act and consequent assessment proceedings u/s 147 of the Act deserve to be quashed. 10. The ld. DR strongly supported the orders of the authorities below. The ld. DR referring to page 1 of the assessment order submits that it is the finding of the Assessing Officer that there was a search in the case of the assessee on 22.06.2016 and the Dy. Director of Income Tax (Investigation) forwarded information to Income Tax Officer, Ward-1, Panipat, who had jurisdiction over the case of the assessee at that time. Therefore, the re-assessment made is valid. 11. Heard rival contentions. On perusal of the assessment order we notice that search and seizure operation was carried on 22.06.2016 by the Dy. Director of Income Tax (Investigation) Panipat, in the case of Garg Group of cases including the assessee. It is the finding of the Assessing Officer that Dy. Director of Income Tax (Investigation) Panipat, has forwarded information to Income Tax Officer, Ward-1, Panipat, who is said to be the jurisdictional Assessing Officer at that time. However, we notice that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment without issuing fresh notice u/s 148. It means that ITO Ward-26(4), New Delhi had no valid jurisdiction over the appellant, at the time of issuing notice u/s 148 of the Act. In such circumstances, it was held by the Hon ble Allahabad High Court in the case of CIT Vs. M/s MT Builders Pvt. Ltd., (2012) 349 ITR 271 (All.) that the notice issued by an Officer who had no valid jurisdiction over the assessee is invalid. The notice under Section 148 of the Act issued by the Income Tax Officer, Ward-26(4) is non est in the eyes of law since he had no valid jurisdiction over the appellant either territorial as notified under Section 124 of the Act or by transferring the case under the provisions of Section 127 of the Act. Now, the question is whether the action of the Income Tax Officer, Ward-26(3) New Delhi was valid in law in concluding the assessment proceedings based on the notice issued under Section 148 of the Act by the Income Tax Officer, Ward-26(4) who had no valid jurisdiction to issue the notice. The issue of valid jurisdiction is a condition precedent to the validity of any assessment under Section 147 of the Act; therefore, the assessment made pursuant to such notice is ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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