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TMI Blog2025 (5) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... essment Year 2017-18. 5. Factual matrix of the matter can be summarized as under: 5.1 The petitioner-company filed return of income for the Assessment Year 2017-18 on 31.10.2017 declaring total income of Rs. 58,50,620/-. 5.2 The petitioner-company was earlier known as "Infimium Resources Investment Private Limited" and its name was changed to "M/s. O3 Developers Private Limited" from 18.03.2019. The petitioner informed the change in name to the respondent and thereafter, a new PAN Card in name of the petitioner was issued on 30.04.2019. 5.3 The respondent thereafter, issued notice dated 31.03.2021 under section 148 of the Act seeking to reopen assessment for A.Y. 2017-18. 5.4 The petitioner therefore, filed return of income for the year under consideration in response to the notice under section 148 alongwith a request to provide reasons for reopening. 5.5 The respondent provided copy of reasons for reopening along with notice dated 28.10.2021 issued under section 143 (2) of the Act which reads as under: "The assessee's case has selected/pushed through Insight Portal for reopening of assessment u/s. 147 of the Income-tax Act, 1961 for FY 2016-17 relevant to AY 2017-18 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition. 6. Learned Senior Advocate Mr. Tushar Hemani appearing for the petitioner submitted that the impugned notice for reopening is without jurisdiction as the respondent ITO, Ward-2 (1) (1), Ahmedabad does not have jurisdiction over the petitioner. Hence, the impugned notice issued by the Income Tax Officer, who has no jurisdiction as the name of the petitioner which was changed from Infinium Natural Resources Investments Private Limited to M/s. O3 Developers Private Limited, would not now fall within the jurisdiction of the respondent, who has issued the impugned notice. 6.1 It was further submitted that as per the new PAN number, which was issued in the name of the petitioner on 30.04.2019, the jurisdiction of the petitioner will fall within Circle 3 (1) (1), Ahmedabad and not with the respondent. It was submitted that as per the details as to the jurisdiction issued by the Principal Commissioner of Income Tax, Gujarat, all the persons being companies registered under the Companies Act, 2013 or the Companies Act, 1956 and having its registered office or principal place of business situated in Ahmedabad District with names beginning with alphabets "N" or "O" or "P" with eith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned in the name of the person from whom such funds have been received and in absence of such details, the respondent could not have formed reason to believe that income chargeable to tax in the hands of the petitioner has escaped the assessment. 6.5 It was further submitted that the allegation regarding accommodation entry is as per the information received from the credible sources to the effect that the petitioner is one of the beneficiary of entries provided from Kushal Ltd, Ahmedabad i.e. the entity wherein a search action was carried out. However, the respondent-Assessing Officer has not taken into consideration the objection raised by the petitioner that the petitioner has not taken any such entry from Kushal Limited, Ahmedabad, and the petitioner has accounted for all the credit entries in the bank account and the return of income has been filed after considering the credit entries in the bank account and mere receipt of entry in bank account would not constitute any income. Hence, it was submitted that the impugned notice is without jurisdiction as the respondent has failed to give any information relating to the nature of transaction, date of transaction, treatment giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the respondent-Assessing Officer for the A.Y. 2017-2018 and subsequently, the name of the petitioner-company was changed to M/s. O3 Developers Private Limited and as per the allocation of the jurisdiction, the name of the petitioner-Company would fall within the jurisdiction in Circle 3(1)(1), Ahmedabad. 7.3 In support of his submissions, reliance was placed on the decision of Abhishek Jain vs. Income Tax Officer, Ward 55(1), New Delhi reported in [2018] 94 taxmann.com 355 (Delhi) to submit that the Income Tax Officer would not per se lack jurisdiction for issuance of reopening against the assessee in view of the provision of section 124 read with section 120 of the Act. 7.4 It was submitted that as per the provision of section 120 (1) of the Act, the Income Tax Authority have to exercise all or any of the powers and perform all or any of the functions conferred on it. It was submitted that the respondent therefore, is within its jurisdiction to issue impugned notice. It was submitted that as per the provision of section 124 of the Act which prescribes the jurisdiction of the Assessing Officer where by, virtue of any direction or order issued under sub-section (1) or sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner. 7.7 Learned Senior Standing Counsel Mr. Varun Patel referred to and relied upon the additional affidavit filed on behalf of the respondent to contend that the petitioner was required to intimate the Assessing Officer regarding the change in name of the Company and PAN, however, the same has not been done as per the say. 7.8 Learned advocate Mr. Patel has referred to the following averments made in the additional affidavit-in-reply: "3. It is further submitted that as per the notification / instructions issued by the CBDT Vide F. No. 187/4/2020-ITA-I dated 08.12.2020, the jurisdictional assessing officer has jurisdiction to issue notice u/s. 143 (2) of the Income Tax Act in cases where notice u/s. 148 of the Act was issued before such case is assigned to ReAC/NeAC (i.e. Regional/ National e-assessment centre). Annexed hereto and marked as Annexure-R 2 is a copy of notification/instructions issued by the CBDT Vide F. No. 187/4/2020-ITA-I dated 08.12.2020. The case of the assessee was transferred to ReAC / NeAC, Delhi on 11.11.2021, and all notices thereafter related to assessment proceedings have been issued by Faceless Assessing Officer under NeAC (National E assessment Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the stage of issue of notice u/s 148, the only question is whether there was relevant material on which reasonable person could have form the requisite belief as to whether an income chargeable to tax has escaped assessment. The expression 'reason to believe' cannot be read to mean that the AO should have finally ascertained the fact by legal evidence or conclusion. Whether material would conclusively prove escapement of income is not the concern at the stage of issue of notice. It only means that the AO forms a belief from the examination of facts, from any information the AO receives. If the AO discovers or finds or satisfies that the taxable income has escaped assessment, it would amount to saying that the AO had reason to believe' that such income has escaped assessment. The justification of AO's belief is not to be judged from the standards of proof required for coming to a final decision. A belief though justified for the purpose of initiation of the proceedings u/s 147 may ultimately stand altered after the hearing and while reaching the final conclusion on the basis of the intervening enquiry. At the stage where AO finds a cause or justification to believe that such inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following decisions: * Jayant Security & Finance Ltd vs. Assistant Commissioner of Income Tax, Officer Circle 1(1) reported in [2018] 91 taxmann.com 181 (Gujarat); * Yogendrakumar Gupta vs. Income Tax Officer reported in [2014] 46 taxmann.com 56 (Gujarat). 8. Having heard learned advocates for the respective parties and considering the material placed on record, it appears that the respondent-Assessing Officer has issued the impugned notice based upon the information made available on the insight portal regarding the alleged accommodation entries received by the petitioner in the bank account from Kushal Ltd, who was alleged to be an accommodation entry provider. 9. With regard to the contention raised on behalf of the petitioner that the respondent-Assessing Officer could not have jurisdiction to assume the jurisdiction in view of change of jurisdiction on account of change of name of the petitioner-Company, it would be germane to refer to the following provisions of the Act. "2. Definitions.- (7) "assessee" means a person by whom 7 [any tax] or any other sum of money is payable under this Act, and includes- (a) every person in respect of whom any proceeding under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of persons; (c) incomes or classes of income; and (d) cases or classes of cases. (4) Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,- (a) authorise any [Principal Director General or Director General] or [Principal Director or Director] to perform such functions of any other income-tax authority as may be assigned to him by the Board; (b) empower the [Principal Director General or Director General] or [Principal Chief Commissioner or Chief Commissioner] or [Principal Commissioner or Commissioner] to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by [an Additional Commissioner or] [an Additional Director or] a [Joint Commissioner] or a [Joint Director]] and, where any order is made under this clause, references in any other provision of this Act, or in any rule m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the [Principal Director General or Director General] or the [Principal Chief Commissioner or Chief Commissioner] or the [Principal Commissioner or Commissioner]; or where the question is one relating to areas within the jurisdiction of different [Principal Director General or Director General] or [Principal Chief Commissioner or Chief Commissioner] or [Principal Commissioner or Commissioner], by the [Principal Director General or Director General] or [Principal Chief Commissioners or Chief Commissioners] or [Principal Commissioner or Commissioner] concerned or, if they are not in agreement, by the Board or by such [Principal Director General or Director General] or [Principal Chief Commissioner or Chief Commissioner] or [Principal Commissioner or Commissioner] as the Board may, by notification in the Official Gazette, specify. (3) No person shall be entitled to call in ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereafter, he may transfer the case after obtaining permission from the higher authorities to the proper jurisdiction. In view of the facts of the case, it cannot be said that the respondent did not have jurisdiction to issue the notice for reopening upon receipt of the information, more particularly, when the petitioner has not informed the respondent with regard to the change of jurisdiction as averred in the additional affidavit-in-reply filed on behalf of the respondent as extracted here-in-above. In view of the fact that the petitioner never informed about the change in PAN of the petitioner due to change of name to the respondent-Assessing Officer and as such, the impugned notice dated 31.10.2017 was issued in name of the petitioner, by the respondent for reopening of Assessment Year 2017-18 dated 31.10.2017. 11. Reliance placed by the respondent on the decision of the Hon'ble Apex Court in case of Commissioner of Income Tax, Delhi-XVI vs. S.S. Ahuwalia reported in [2014] 46 taxmann.com 169 (Delhi) would be applicable to the facts of the case also as the Hon'ble Supreme Court has, after discussion, arrived at following proposition: "51. In light of the aforesaid discussion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xchange of correspondence between Assessing Officer at Delhi and ITO, Dimapur. ITO, Dimapur conceded and accepted that for the assessment years 1985-86, 1986-87 and 1987-88, the Assessing Officer at Delhi had jurisdiction to initiate and complete the assessment proceedings. However, the procedure under Section 124 of the Act was not followed and the Commissioners concerned did not deliberate in writing upon the said issue. Even if they did, no such document or evidence was brought on record. (9) After the order of the CIT (Appeals) dated 26.02.1993 setting aside the assessment but permitting the Assessing Officer to proceed further from the stage of default and directing compliance of Section 127 of the Act, ITO, Dimapur had passed assessment orders in respect of assessment years 1985-86, 1986-87 and 1987-88. This fact has not been adverted to and noticed by the tribunal in the appeals relating to second and fourth round. Thus the assessment orders in the second round were not passed by the Assessing Officer at Delhi but the ITO Dimapur. This was crucial and relevant fact but was not referred to and considered by the tribunal while examining the appeals in the second and fourth r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, the basic postulates of the provisions both pre and post amendments remain substantially similar. The provisions as they existed before and after the amendments, postulate filing of objections before the Assessing Officer within stipulated periods, reference to the Commissioner or Commissioners concerned and a decision by the said Commissioner/ Commissioners/ the Board/ appropriate authority in case of disagreement between the Commissioners. (13) The provisions indicate that Sections 120, 124 and 127 of the Act recognizes flexibility and choice, both with the assessee and the authorities i.e. the Assessing Office before whom return of income could be filed and assessment could be made. The Assessing Officer within whose area an assessee was carrying on business, resided or otherwise income had accrued or arisen (in the last case, subject to the limitation noticed above) has jurisdiction. Similarly, the Assessing Officer also has authority due to class of income or nature and type of business. The Act, therefore, recognized multiple or concurrent jurisdictions. Provisions of Section 124 ensures and prevents two assessments by different assessing officers, having or enforcing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing has to be examined each year with reference to provisions of Section 124 of the Act. Decision in K.K Loomba (supra) was pronounced in the year 2000 and dissents from the view/ ratio of the Punjab and Haryana High Court in Lt. Col Paramjit Singh (supra). Thus, when the proceedings were going on, the legal position was not clear and hence, debatable. However, as noticed above, Section 124 of the Act provides flexibility and postulates multiple and concurrent jurisdiction including filing of return and where the assessee has permanent or current residence or where he has sole/only source of income. (17) The Tribunal could not have gone into the question of jurisdiction of AO, Delhi except on the question and issue whether there was any lapse on the part of the Assessing Officer in not following the procedure prescribed under Section 124 of the Act and effect thereof. As in the present case, the procedure under Section 124 was not followed by the Assessing Officer, the effect thereof could have been considered and examined by the Tribunal. (18) The Tribunal has erred and incorrectly held that failure to follow the procedure under Section 124 makes the assessment order a nul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner, it appears that the impugned notice issued by the respondent Assessing Officer cannot be said to be without jurisdiction. Therefore, in case of Abhishek Jain (supra), the Hon'ble Delhi High Court has also relied upon the decision in case of S.S. Ahluwalia (supra) to come to the conclusion that the notice in the facts of the said case, cannot be said to be without jurisdiction in view of the provision of section 124(1) of the Act which provides that the Assessing Officer would have jurisdiction over the areas in terms of the directions issued as per the provision of section 120 of the Act. Therefore, there cannot be said to be lack of jurisdiction of the respondent-Assessing Officer while issuing impugned notice as the respondent, after change of name cannot be said to have, different territorial jurisdiction and all Assessing Officers within the same territorial jurisdiction are authorized to take action in accordance with law. 14. Therefore, we are now required to consider the merits of the case as the first issue of jurisdiction is held against the assessee. 15. On perusal of the reasons recorded by the respondent-Assessing Officer which are reproduced here-in-above, it a ..... 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