GAURAV SINGHAL,NEW DELHI V. ITO, WARD-17(4), NEW DELHI

ITA 3835/DEL/2019

AI Insights

The case involves an appeal by Gaurav Singhal against the order of the Commissioner of Income-Tax (Appeals)-6, Delhi, which upheld the assessment made by the Income Tax Officer, Ward 17(4), New Delhi. The assessment included significant additions to the assessee's income for the assessment year 2015-16. The primary contention in the appeal was the improper transfer of jurisdiction from ITO, Ward 40(1) to ITO, Ward 17(4) without following the prescribed legal procedures under Section 127 of the Income Tax Act. The Tribunal referenced a similar case involving the same assessee for the assessment year 2014-15, where a similar assessment was quashed on the same grounds.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716792 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 01-05-2019
• Other Referred Cases: Sangeeta Wahi vs. ITO, Pushpa Gupta Vs. ITO, S.K. Industries Vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: R R SINGHLA
• Section: 143(3); 142(1); 68

Judgement Text

" INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI BEFORE SHRI M BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 3835/DEL/2019 Assessment Year: 2015-16 Gaurav Singhal, 149, Tarun Enclave, Pitampura, New Delhi PIN: 1100 34 AOHPS3787D Vs. Income Tax Officer, Ward 17(4), C.R. Building, New Delhi-1100 02 (Appellant) (Respondent) O R D E R PER VIMAL KUMAR, JUDICIAL MEMBER: The assessee’s appeal is against order dated 14.03.2019 of Learned Commissioner of Income-Tax (Appeals)-6, Delhi (hereinafter referred as “the Ld. CIT(A)”) under Section 250 of the Income Tax Act, 1961 ( hereinafter referred as “the Act”) arising out of assessment order dated 26.12.2017 under Section 143(3) of the Act by the Learned Income Tax Officer, Ward 17(4), New Delhi (hereinafter referred as “Ld. AO\") for assessment year 2015-16. 2. Brief facts of case are that on 30.01.2016, assessee filed his return of income at Rs.5,34,400/-. The case was selected for complete scrutiny through CASS. Notice under Section 143(2) of the Act dated 29.07.2016 was issued by Assessee by: Shri R R Singhla, Adv. Department by: Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing: 06.08.2025 Date of pronouncement: 20.08.2025 Printed from counselvise.com ITA No.3835/Del/2019 2 ITO, Ward 40(1), Delhi. Notice under Section 142(1) of the Act along with questionnaire was issued on 24.11.2017 and relevant details and documents were called for. In response to the notices, Shri R.R. Singhla, CA/AR of assessee attended proceedings and submitted written submissions and details. On completion of proceedings, Ld. AO vide assessment order dated 26.12.2017 made additions of Rs.54,75,000/- and Rs.2,73,750/-. 3. Against order dated 26.12.2017 of Ld.AO, appellant/assessee preferred appeal before Ld. CIT(A) which dismissed vide order dated 14.03.2019. 4. Being aggrieved, appellant/assessee preferred present appeal with following grounds: “1. The ld. CIT(A) has erred in law and on facts by upholding the assessment even if the Ld. AO has assumed the jurisdiction on transfer of case from Income Tax Officer, Ward 40(1) without following set of procedure prescribed by law. 2. The ld. CIT(A) has erred in law and on facts while upholding the assessment on the basis of a statement confrontation/cross examination of the which was not allowed to the assessee. 3. The ld. CIT(A) has erred in law and on facts by upholding the additions made by invoking the provisions of section 68 of the Income Tax Act. 4. The ld. CIT(A) has erred in law and on facts while upholding the additions and in ignoring the documentary evidences including the identity of the creditor and confirmation from the creditor furnished by the assessee. 5. The ld. CIT(A) has erred in law and on facts while upholding the addition of gross sale value of shares as undisclosed income and Printed from counselvise.com ITA No.3835/Del/2019 3 ignoring the cost of purchase and selling expenses and thus framing the assessment without application of mind. 6. The ld. CIT(A) has erred in law and on facts while upholding the addition of Rs.2,73,750/- based on whims and surmises of the Ld. AO. 7. The ld. CIT(A) has erred in law and on facts while dismissing the ground of appeal raised by the assessee against invocation of provisions of section 115BBE of the Act. 8. The assessee may please be allowed to add, alter, amend its ground of appeal at any time before or during the course of hearing of the appeal.” 5. Learned Authorised Representative for the appellant/assessee submitted that assessee filed return on 30.01.2016 online with Income Tax Officer, Ward 40(1), Delhi ( page no. 12 of paper book). Notice under Section 142(2) dated 29.07.2016 was received from ITO, Ward 40(1), Delhi ( page no.15 of the paper book). On this basis of this notice dated 29.07.2016, assessment order dated 26.12.2017 was framed by ITO, Ward 17(40), Delhi. No order was passed under Section 127 of the Act for transfer of case from ITO, Ward 40(1) to ITO, Ward 17(4). On similar facts, assessment order for AY 2014-15 of assessee was quashed by Hon’ble Tribunal in ITA No.5786/Del/2018 dated 29.01.2025. Reliance was placed on following judgments: 1) Sangeeta Wahi vs. ITO in ITA No.930/Del/2023 – Order dated 20.11.2024; 2) Pushpa Gupta Vs. ITO in ITA No.3604/Del/2019 – Order dated 18.04.2024; & 3) S.K. Industries Vs. ACIT (2022) 141 taxmann.com 568 (Delhi) SLP No.14128 of 2018 dismissed by Hon'ble Supreme Court. Printed from counselvise.com ITA No.3835/Del/2019 4 6. Learned Authorised Representative for the Department of Revenue relied on orders of Departmental Authorities. 7. From examination of record in light of above submissions, it is amply clear that notice under Section 143(2) of the Act dated 29.07.2016 was issued by ITO, Ward 40(1), Delhi ( page 15 of paper book ). Assessment order dated 26.12.2017 under Section 143(3) of the Act was passed by the ITO, Ward 17(4), Delhi. 8. On similar facts for AY 2014-15, the assessment order of assessee was quashed by the Hon’ble Tribunal, Delhi in ITA No.5786/Del/2018 vide judgment dated 29.01.2025 by observing as under: “11. We have heard the rival submissions and have perused the relevant material on record. On careful consideration of the facts and submissions, we find that in the judgment of the Hon'ble High Court of Delhi in the case of Abhishek Jain [supra], relied upon by the ld. CIT(A)/ld DR, there can be two or even more Assessing Officers u/s 120 of the Act having jurisdiction over an assessee based on his business or residence or other details. However, the issue in the present appeal is whether an Assessing Officer can pass an assessment order in the case of an assessee on the basis of notice u/s 143(2) of the Act issued by another Assessing Officer, without assuming jurisdiction under section 127(2) of the Act. 12. We find from the factual matrix of the case that the Assessee filed his Return of income for AY 2014-15 at Rs. 4,55,610/- vide return dated 21- 02-2015 with Income Tax Office, Ward 40(1), Delhi. Thereafter, the Income Tax Officer, Ward 40(1), Delhi issued and served notice u/s 143(2) dated 18-09-2015 to the assessee. Soon thereafter, notice u/s 143(2) dated 22.09.2015 was also received from Income Tax Officer, Printed from counselvise.com ITA No.3835/Del/2019 5 Ward 71(2), Delhi. Assessee further received notices u/s 142(1) dated 29.4.2016, 17.5.2016 and 10.6.2016 from ITO Ward 71(2) and the assessee attended assessment proceedings on various dates. 13. Subsequently vide transfer memo dated 28-06-2016, records were transferred by ITO Ward 71(2) to ITO Ward 71(5), Delhi. Again the ITO Ward 71(5), Delhi issued notice u/s 143(2) dated 29.6.2016 and dated 6.7.2016 and were replied by the assessee. Meanwhile, the Income Tax Officer, Ward 71(5) again transferred the records to ITO Ward 17(4) by a suo moto transfer memo. Thereafter, the Income Tax Officer, Ward 17(4), Delhi issued a notice u/s 143(2) dated 22.07.2016 and finally framed the assessment on 28.12.2016. 14. We find that the ITO 71(2) validly issued the notice u/s 143(2) within time period allowed. However, the notice u/s 143(2) issued by the ITO 17(4), who finally framed the assessment u/s 143(3), was not valid as the same was issued beyond the prescribed time period. In such a situation, we are called upon to adjudicate whether the ITO 17(4) can pass an assessment order on the strength of valid notice u/s 143(2) issued by ITO 71(2), without assuming a valid jurisdiction over the assessee u/s 127(2). The ld DR has not been able to controvert the submission of the assessee that no order u/s 127 was passed/issued for transferring the jurisdiction from ITO 71(5) to ITO Ward 17(4). The ld DR also could not place any material/evidence on record to show that the ITO 17(4) assumed jurisdiction u/s 120 on the basis of the residence or place of business of the assessee. 15. In similar facts, the ITAT decided in the case of Sangeeta Wahi (supra) and the case of Pushpa Gupta (supra) relied upon by the assessee, that without a valid assumption of jurisdiction u/s 127, the assessment order would be rendered illegal and invalid. The reliance on the case of Ashwani Kumar is misplaced as the same dealt with a situation where notice u/s 143(2) was not issued. The case of Abhishek Jain (supra) relied upon by the Id. DR are distinguishable from the facts of the instant case. In that case, the assessee had raised objections over the jurisdiction of the AO issuing notice i.e. ITO ward (1)(1), Noida and asked to transfer his case to Delhi, which is not in the present case. The case of the assessee is supported by the decision of Hon’ble Delhi High Court in the case of S K Industries (supra) where the court held that assessment order is unsustainable in law since it was passed without the AO having jurisdiction over the assessee issuing notice u/s 143(2) within prescribed time limit. Printed from counselvise.com ITA No.3835/Del/2019 6 16. In view of the above, we are of the considered view that the ITO 17(4) passed the assessment order without validly assuming jurisdiction u/s 127(2) rendering the assessment made u/s 143(3) by ITO 17(4) liable to be quashed and the same is hereby quashed. We allow the ground no 1 of the appeal of the assessee on jurisdiction. Since we have decided the appeal on technical ground, we do not dwell into the merits of the case. 17. In the result, the appeal of the assessee in ITA No. 5786/DEL/2018 is allowed.” 9. In view of above material facts, respectfully following the judicial precedent in assessee’s own case, it is held that the ITO, Ward 17(4), Delhi, Ld. AO passed assessment order without validly assuming jurisdiction under Section 127(2) of the Act rendering the assessment made under Section 143 of the Act liable to be quashed. Accordingly, ground of appeal no.1 is allowed. 10. Grounds of appeal nos. 2 to 8 were not argued and are left open. 11. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 20th August, 2025. Sd/- Sd/- ( M BALAGANESH ) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 20/08/2025 Mohan Lal Printed from counselvise.com ITA No.3835/Del/2019 7 Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "