Income Tax Appellate Tribunal, Delhi: In an appeal filed against the order passed by the National Faceless Appeal Center (‘NAFC’), Challa Nagendra Prasad (Judicial Member) partly allowed the appeal and quashed the reassessment order made by the Income Tax Officer, ward 4(1), Gurgaon on the basis of notice issued under Section 148 of the Act by non-jurisdictional Assessing Officer i.e. ITO, Ward 69(1), New Delhi.
Background
A notice dated 30-03-2018 was issued under Section 148 of the Income Tax Act, 1961 (‘the Act’) by the Assessing Officer for reopening of assessment. Subsequently, the reassessment process was handled by the jurisdictional Assessing Officer Income Tax officer (‘ITO’), Ward 4(1), Gurgaon, following the transfer of the case from the non-jurisdictional officer. This reassessment resulted in the inclusion of Rs. 12,50,000 as unexplained money due to cash deposits made during the financial year. The assessee’s case was that CTT(A) had grossly erred in law and on facts of the case in confirming the addition made by the Income Tax officer, amounting to Rs.12,50,000/-on account of cash deposit made during the impugned financial year being treated as unexplained money. The assessee criticized the assessment order on various grounds, including violations of natural justice, improper initiation under Section 148 of the Act, and reliance on insufficient evidence.
Analysis and Decision
The Tribunal noted that the notice under Section 148 of the Act dated 30-03-2018 was issued by ITO, Ward 69(1), Delhi, to reopen the assessment of the assessee and subsequently, the case was transferred to ITO, Ward 4(1), Gurgaon, via a letter dated 12-11-2018 for the completion of the reassessment.
The Tribunal said that at the time the notice under Section 148 of ITA was issued by ITO, Ward 69(1), New Delhi, this officer did not have jurisdiction over the assessee as the jurisdiction was actually vested with ITO, Ward 4(1), Gurgaon. Therefore, reopening the assessment by issuing the notice under Section 148 by ITO, Ward 69(1), New Delhi was bad in law. The Tribunal said that there was no evidence on record to suggest that the Assessing Officer with proper jurisdiction over the assessee, that is ITO, Ward 4(1), Gurgaon, issued any notice under Section 148 of the Act.
The Tribunal said that the assessment was completed under Sections 143(3) read with 147 of the Act on 28-12-2018 by ITO, Ward 4(1), Gurgaon, based on the notice issued by ITO, Ward 69(1), New Delhi, who did not have valid jurisdiction to initiate the reassessment proceedings.
The Tribunal relied on Nishi Kapoor v. ITO, 2019 SCC OnLine ITAT 2632, wherein a similar issue was considered and the reassessment proceedings were quashed for invalid jurisdiction. The Court said that Nishi Kapoor (supra) was applicable to the matter at hand, thus, the reassessment made by the ITO, Ward 4(1), Gurgaon on the basis of notice issued under Section 148 of the Act by non-jurisdictional Assessing Officer i.e. ITO, Ward 69(1), New Delhi, was hereby quashed.
Thus, the Tribunal partly allowed the assessee’s appeal.
[Saroj Sangwan v. ITO, 2024 SCC OnLine ITAT 443, Order Dated: 17-05-2024]
Advocates who appeared in this case :
For the Appellant: Advocate Swati Talwar
For the Respondent: Senior DR Om Parkash