BAR COUNCIL OF DELHI,DELHI V. INCOME TAX OFFICER EXEMTIONS WARD 1(3)NEW DELHI, DELHI

ITA 852/DEL/2025

AI Insights

The case involves the Bar Council of Delhi appealing against the orders of the Commissioner of Income-tax (Appeals), NFAC, Delhi, which arose from the orders passed under sections 144/147 of the Income Tax Act, 1961 by the ITO(E), Ward-1(3), New Delhi. The primary contention was the improper service of notices under sections 147/148, which the assessee argued invalidated the assumption of jurisdiction. The NFAC had restored the issues on merits to the AO without addressing the service of notices, which the assessee challenged. The tribunal found that the NFAC should have decided on the jurisdictional issues before remitting the case for a fresh hearing on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314030 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PARKASH
• Assessee Lawyers: PREM LATA BANSAL; SHIVANG BANSAL
• Keywords: Principle of natural justice; Earning of tax free income; Application of stay
• Section: 148; 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: C : NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITAs No.630, 852, 1043 & 1047/Del/2025 Assessment Years: 2011-12 to 2014-15 SA Nos.86 & 87/Del/2025 (ITA Nos.852 & 630/Del2025) Assessment Years : 2012-13 & 2011-12 Bar Council of Delhi, 2/6, Siri Fort Institutional Area, Andrews Ganj, S.O. Shahpur Jat, New Delhi – 110 049. PAN: AAGFB5063Q Vs DCIT (E), Circle-1(1), New Delhi. (Appellant) (Respondent) Assessee by : Smt. Prem Lata Bansal, Sr. Advocate & Shri Shivang Bansal, Advocate Revenue by : Shri Om Parkash, Sr. DR Date of Hearing : 06.05.2025 Date of Pronouncement : 06.05.2025 ORDER PER ANUBHAV SHARMA, JM: These appeals are preferred by the assessee against the orders dated 10.01.2025 of the Commissioner of Income-tax (Appeals), NFAC, Delhi (hereinafter referred to as the Ld. First Appellate Authority or ‘the Ld. FAA’, for short) arising out of the appeals before it against the order passed u/s ITAs No.630, 852, 1043 & 1047/Del/2025 SA Nos.86 & 87/Del/2025 Bar Council of India vs. DCIT (E) 2 144/147 of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ITO(E), Ward-1(3), New Delhi/DCIT, Exemption Circle, Delhi (hereinafter referred to as the Ld. AO). 2. On hearing both the sides, we find that amongst other grounds on merits, the assessee has raised grounds No.1 to 3 whereby the impugned order of the NFAC has been challenged before us, for the reasons that being the First Appellate Authority, NFAC has failed to examine the issue of reopening u/s 147/148 of the Act, which the assessee has challenged on the basis that the notices were not served in accordance with the Act and, thus, the assumption of jurisdiction itself suffers. The NFAC has restored the issues on merits to the AO only for the reason that assessment was completed u/s 144/147 of the Act and the ends of justice required the assessee to be heard. 3. The ld. Sr. Counsel has pointed out the sequence of events submitting that in the present case, no notices could have been issued after the expiry of six years from the end of the relevant assessment year as per law and in any case, they were not served in accordance with the provisions of the Act. The ld. Sr. Counsel has relied a catena of judgments wherein the Hon’ble jurisdictional High Court and various other Hon’ble High Courts and coordinate Benches have held that mere issue of notice is not sufficient and service has to be proved as well. The ld. Sr. Counsel has also pointed out that the assessee was not ITAs No.630, 852, 1043 & 1047/Del/2025 SA Nos.86 & 87/Del/2025 Bar Council of India vs. DCIT (E) 3 served with notices and by telephonic call was informed of not filing of the return for which the assessee deputed one of its employees to whom allegedly the notices were handed and shown served. The ld. Sr. Counsel has submitted that if that is taken to be effective date of service, the assessee was not given 30 days’ time to file the return and the submissions made were also not considered. It was also submitted that in any case without due service of notice u/s 148 of the Act, proceeding to adjudicate u/s 144 of the Act was against the principles of natural justice. 4. The ld. DR has submitted that there was a dispute with regard to the status of the assessee as Association of Persons (AOP) or as an assessee entitled to exempt income u/s 10(23A) of the Act for the reason of the PAN being issued as AOP. However, that is not relevant, when NFAC has failed to decides issues which, if decided against revenue, would make the whole proceedings vitiate. Thus we are of the considered view that once assumption of jurisdiction is challenged and which appears to be quite a substantial and considerable ground, based on the facts as cited, the NFAC having coterminous powers of AO was supposed to decide those grounds as per law. As it is only in case the assumption of jurisdiction is sustained it would have been justified to remit the assessee’s case for a fresh opportunity of hearing on merits. Thus, we are inclined to sustain these grounds No.1 to 3. ITAs No.630, 852, 1043 & 1047/Del/2025 SA Nos.86 & 87/Del/2025 Bar Council of India vs. DCIT (E) 4 5. At this stage, the ld. Sr. Counsel has submitted that there are Stay Applications also listed today. It was submitted that since the matters are being restored to the files of the NFAC, directions be issued to the ld. AO not to complete the assessment as per the earlier directions of NFAC. 6. In the light of the aforesaid, the appeals are allowed for statistical purposes. NFAC shall expeditiously, and preferably in three months of receipt of this order, decide the jurisdictional and legal grounds as raised by taking in consideration all the aspects raised by assessee, and pass the order afresh. Meantime the ld. AO shall not complete assessments. In these terms the Stay Applications also stand disposed of. Order pronounced in the open court on 06.05.2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 06th May, 2025. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "