ITO, New Delhi V. Mr. Sanjay Goel, New Delhi

ITA 1380/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65876 (ITAT-DELHI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 15-11-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 23-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Keywords: Reopening of assessment; Competent authority
• Section: 142(1); 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI CM GARG, JM ITA NOS. 1380 & 1381/DEL/2012 ASSESSMENT YEAR : 2003-2004 & 2004-05 ITO, WARD 21(3) VS. MR.SANJAY GOEL ROOM NO. D3, VIKAS BHAVAN H.NO. T-132, INDIRA COL ONY NEW DELHI 2 NARELA, DELHI 40 PAN: AGEPG 6076 G (APPELLANT) (RESPONDENT) APPELLANT BY:- SH.SATPAL SINGH, SR.D.R. RESPONDENT BY:- SH. VED JAIN, FCA O R D E R PER J.SUDHAKAR REDDY, AM BOTH THESE APPEALS ARE FILED BY THE REVENUE DIREC TED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-X XII, NEW DELHI DT. 04.01.2012 FOR THE ASSESSMENT YEAR 2003-04 & 200 4-05 ON THE FOLLOWING GROUNDS. 1. WHETHER ON THE FACTS, CIRCUMSTANCES OF THE CAS E THE LD.CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT ORDER DUE TO R EASON THAT THE ASSESSING OFFICER WHO ISSUED NOTICE UNDER SECTION 1 48 OF THE INCOME TAX ACT, 1961, WAS NOT HAVING THE JURISDICTI ON OVER THIS CASE AND THE ASSESSING OFFICER, WHO COMPLETED THE A SSESSMENT, DID NOT RECORD THE REASONS AGAIN FOR REOPENING OF A SSESSMENT AND ISSUED THE NOTICE UNDER SECTION 148 OF THE INCOME T AX ACT, 1961 AGAIN. 2. WHETHER ON THE FACTS, CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT ORDER BY RELYI NG UPON THE JUDGEMENTS OF HONBLE ITAT AND DELHI HIGH COURT AS MENTIONED IN THE ORDER OF LD.CIT(A), INSPITE OF THE FACT THAT TH ERE IS NO PROVISION IN THE INCOME TAX ACT, 1961, TO RECORD REASONS AGAI N IF ONCE IT HAS BEEN DONE BY ANOTHER ASSESSING OFFICER IN A SAME CA SE. 3. WHETHER ON THE FACTS, CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT ORDER WITHOUT APPRECIATING THE FACT THAT THE ASSESSMENT WAS REOPENED ON THE BA SIS ON 2 INFORMATION RECEIVED BY THE ASSESSING OFFICER AT SO NEPAT FROM THE INVESTIGATIONS WING OF THE INCOME TAX DEPARTMENT AT FARIDABAD AND HE ISSUED THE NOTICE UNDER SECTION 148 GENUINEL Y WITHOUT HAVING THE WHEREABOUTS OF THE INCOME TAX RETURN OF THE ASSESSEE, AND THE ASSESSING OFFICER WHO COMPLETED THE ASSESSM ENT DID NOT HAVE THE TIME LEFT TO ISSUE NOTICE UNDER SECTION 14 8 OF THE INCOME TAX ACT, 1961 AGAIN, AND HAD HE DONE THAT THEN THE ASSESSEE WOULD HAVE CHALLENGED THE TIME VALIDITY. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AL L OR ANY OF THE AFORESAID GROUNDS OF APPEAL AND AMEND, ALTER OR ADD ANY OTHER GROUND OF APPEAL. 2. THUS, THE ONLY ISSUE THAT COMES FOR OUR ADJUDICA TION IS WHETHER THE COMMISSIONER OF INCOME TAX (APPEALS) WAS ERRED IN HOLDING THAT THE REOPENING OF ASSESSMENTS IS BAD IN LAW. THE FACTS OF THE CASE AS BROUGHT OUT AT PARA 4, PAGE 2 OF THE COMMISSIONER O F INCOME TAX (APPEALS)S ORDER, ARE EXTRACTED FOR READY REFERENC E:- THE APPELLANT FILED HIS RETURN OF INCOME DECLARING AN INCOME OF RS.62,250/- WITH ITO, WARD 21(3), NEW DELHI. THERE AFTER, ITO, WARD 1, SONEPAT ISSUED NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 ON 29.3.2010 UNDER THE FACT THAT THE APPELLANT HAS NOT FILED THE RETURN OF INCOME TAX FOR THE YEAR UND ER CONSIDERATION. ON INQUIRY IT CAME TO THE NOTICE OF THE ITO, WARD 1 , SONEPAT THAT THE APPELLANT WAS A PARTNER IN M/S CHANDER SINGH SH ERAWAT & SONS (HUF). THE SAID FIRM HAS PURCHASED AND SOLD S OME LAND. SINCE THE APPELLANT WAS A PARTNER AND THE ITO, WARD 1, SONEPATCOULD NOT LOCATE HIS RETURN OF INCOME AT SON EPAT, HE THOUGHT THAT THE SAME WAS NEVER FILED BY THE APPELL ANT. ON RECEIPT OF THE NOTICE BY THE APPELLANT, IT WAS INFORMED BY THE APPELLANT TO THE ITO, WARD 1, SONEPAT THAT HE IS REGULARLY ASSES SED WITH ITO, WARD 21(3), NEW DELHI. BASED ON THIS INFORMATION R ECEIVED FROM THE APPELLANT, ITO, WARD 1, SONEPAT TRANSFERRED THE FILE TO ITO, WARD 21(3), NEW DELHI. THEREAFTER, ITO, WARD 21(3) , NEW DELHI ISSUED NOTICE UNDER SECTION 142(1) DT. 29.6.2010 TO THE APPELLANT. IN RESPONSE TO THE SAID NOTICE, AND THE NOTICES ISS UED THEREAFTER THE APPELLANT APPEARED BEFORE THE ASSESSING OFFICER AND FILED DETAILS ASKED BY HIM. THE ITO, WARD 21(3) AFTER CONSIDERIN G THE DETAILS FILED BY THE APPELLANT PASSED ASSESSMENT ORDER IN T HE CASE OF THE APPELLANT DETERMINING TOTAL INCOME AT RS.23,07,250/ -. 3 3. THE LD.D.R. MR. SATPAL SINGH SUBMITTED THAT WHEN THE ITO, WARD 1 OF SONEPAT HAS RECORDED REASONS AND HAS ALSO ISSU ED NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 FOR REOPEN ING THE ASSESSMENTS AND ON GETTING OBJECTIONS HAS TRANSFERRED THE FILE TO ITO, WARD 21(3), NEW DELHI, AS THIS OFFICER HAD JURISDICTION OF THE ASSE SSEE. HE SUBMITS THAT TRANSFER OF FILE INVOLVES TRANSFER OF REASONS RECOR DED, AS WELL AS, TRANSFER OF NOTICE ISSUED UNDER SECTION 148 OF THE INCOME TA X ACT, 1961. HE ARGUES THAT NO FRESH REASONS NEED BE RECORDED NOR A FRESH NOTICE NEED TO BE ISSUED BY THE ITO, WARD 21(3), NEW DELHI. HE FU RTHER SUBMITS THAT THE ASSESSEE WAS AWARE OF ALL THESE ISSUES AND HAS PARTICIPATED IN THE PROCEEDINGS AND THUS S.292 BB OF THE INCOME TAX ACT , 1961 APPLIES. 4. THE LD.COUNSEL FOR THE ASSESSEE MR.VED JAIN, ON THE OTHER HAND FILED A PAPER BOOK RUNNING INTO 61 PAGES AND DREW T HE ATTENTION OF THE BENCH TO THE OBJECTIONS RAISED BY THE ASSESSEE BEFO RE THE ITO, WARD 21(3), NEW DELHI WHEREIN JURISDICTION WAS CHALLENG ED ON THE GROUND THAT ILLEGALITY OF REOPENING PROCEEDINGS. HE FURTHER PO INTED OUT THAT THE ASSESSEE HAD ALSO CHALLENGED THE REOPENING BEFORE T HE ITO, WARD 1, SONEPAT BY WRITING TWO LETTERS WHICH ARE AT PAGE 5 AND 8 OF THE PAPER BOOK. THUS HE ARGUES THAT S.292BB IS NOT ATTRACTED . FURTHER MORE HE SUBMITS THAT THIS IS A JURISDICTIONAL ISSUE AND HEN CE S.292BB OF THE INCOME TAX ACT, 1961 DOES NOT COME INTO EFFECT. 4 5. HE RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF ITO VS. KRISHNA KUMAR GUPTA, 16 DTR (DELHI TRIBUNAL) AND SU BMITTED THAT ON SIMILAR FACTS AND CIRCUMSTANCES COVERS THE ISSUE ON HAND. HE FILED A COPY OF THE SAME. 6. RIVAL CONTENTIONS HEARD. THE FACTS AND ARGUMENT S FOR BOTH THE AYS IN APPEAL BEFORE US ARE IDENTICAL. THE UNDISPUTED FACT IS THAT THE ITO, CIRCLE 21(3), NEW DELHI HAS JURISDICTION OVER THE A SSESSEE. IT IS ALSO NOT DISPUTED THAT THE ITO, WARD 21(3) HAS NOT RECORDED REASONS FOR REOPENING, NOR HAS HE ISSUED A NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 FOR REOPENING THE ASSESSMENT. ON SIM ILAR FACTS WE FIND THAT THE DELHI E BENCH OF THE TRIBUNAL IN THE CAS E OF ITO VS. KRISHNA KUMAR GUPTA (2008) 16 DTR (DEL) (TRIB.1) HELD AS FO LLOWS. THE ITO, WARD 25(4), HAD ACCEPTED THE ASSESSEE S OBJECTION AND THEN TRANSFERRED THE FILE TO THE ITO, WARD 33(2 ). HAD THE ITO, WARD 25(4) VALID JURISDICTION OVER THE ASSESSEE AND VALIDLY ISSUED THE NOTICE UNDER SECTION 147, THERE WAS NO N EED ON HIS PART TO TRANSFER THE FILE TO ITO, WARD 33(2), WITHO UT HAVING ANY ORDER OF TRANSFER OF THE JURISDICTION PASSED BY ANY COMPETENT AUTHORITY. THE ACTION OF THE ITO, WARD 25(4) IN T RANSFERRING THE FILE TO THE ITO, WARD 33(2), WITHOUT ANY ORDER OF T HE JURISDICTION TRANSFERRING THE FILE FROM HIS WARD TO ITO, WARD 3 3(2) BY ANY COMPETENT AUTHORITY, MAKES IT CLEAR THAT THE ITO, W ARD 25(4) HAD ACTUALLY NO JURISDICTION OVER THE ASSESSEE AND THUS THE NOTICE ISSUED BY HIM UNDER SECTION 147 WAS BEYOND HIS JURI SDICTION. IT IS FURTHER CLEAR THAT THE ITO, WARD 33(2) DID NOT I SSUE ANY FRESH NOTICE UNDER SECTION 148 TO THE ASSESSEE, BUT COMPL ETED THE ASSESSMENT ON THE BASIS OF THE NOTICE ISSUED UNDER SECTION 148 BY THE ITO, WARD 25(4) WHICH IS NOT VALID AND WITHI N THE JURISDICTION IN AS MUCH AS NO VALID PROCEEDINGS UND ER SECTION 147 WERE INITIATED BY THE ASSESSING OFFICER, WARD 25 (4 ) HAVING VALID JURISDICTION OVER THE PRESENT ASSESSEE. THE FACT T HAT THE PRESENT ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSM ENT YEAR 1995-96 BEFORE THE ITO, WARD 24(1) IS NOT IN DISPUT E. IN THE 5 ASSESSMENT FOR THE ASSESSMENT YEAR 1995-96, THE ASS ESSING OFFICER CHARGED INTEREST UNDER SECTION 234A AGAINST WHICH THE ASSESSEE FILED AN APPLICATION UNDER SECTION 154 BEF ORE THE ITO, WARD 24(1), WHO COMPLETED THE ASSESSMENT FOR THE AS SESSMENT YEAR 1995-96. THE IYO, WARD 24(1) THEN, PASSED AN ORDER UNDER SECTION 154 AND REDUCED THE INTEREST UNDER SECTION 234A. IT IS THUS CLEAR THAT THE IYO, WARD 24(1) EXERCISED JURIS DICTION OVER THE ASSESSEE ON 9 TH MAY, 2003 WHEN HE PASSED THE ORDER UNDER SECTION 154 ON AN APPLICATION FILED BY THE ASSESSEE UNDER SECTION 154 ON 5 TH MAY,2003 WITH REFERENCE TO THE RETURN OF INCOME FO R THE ASSESSMENT YEAR 1995-96. THE PRESENT NOTICE HA S BEEN ISSUED UNDER SECTION 147 BY THE ITO, WARD 25(4) WAS WITHOUT JURISDICTION. MOREOVER, THE ITO, WARD 33(2) WHO PA SSED THE PRESENT ASSESSMENT ORDER WITHOUT ISSUING ANY FRESH NOTICE UNDER SECTION 148 CANNOT BE SAID TO HAVE A VALID JURISDIC TION OVER THE ASSESSEE UNLESS AND UNTIL THE CASE HAS BEEN TRANSFE RRED TO HIM FROM ITO, WARD 25(4), BY ANY ORDER PASSED UNDER SEC TION 127 BY ANY COMPETENT AUTHORITY. THE ITO, WARD 33(2) HAD E XERCISED THE JURISDICTION MERELY ON THE BASIS OF INTIMATION GIVE N BY THE ITO, WARD 25(4) AND MERELY ON FILE BEING TRANSFERRED BY THE ITO, WARD 25(4) OF HIS OWN TO THE ITO, WARD 33(2). THEREFORE, THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) HOLDING TH AT THE ASSESSMENT MADE BY THE ITO, WARD 33(2) IS WITHOUT J URISDICTION AND THUS INVALID AND IS THUS TO BE CANCELLED IS UPH ELD CIT VS. SMT.ANJALI DUA (2008) 11 DTR (DEL) 93 AND RANJEET S INGH VS ACIT (2008) 10 DTR (DEL)(TRIB)181 FOLLOWED. CONCLUSION: REASSESSMENT COMPLETED BY AN ITO ON THE BASIS OF NO TICE UNDER SECTION 148 ISSUED BY ANOTHER ITO WHO HAD NO JURISD ICTION OVER THE ASSESSEE IS NOT VALID REASSESSMENT IS INVALID A LSO FOR THE REASON THAT THE JURISDICTION OVER ASSESSEES CASE W AS NOT TRANSFERRED BY ANY ORDER PASSED UNDER SECTION 127 B Y ANY COMPETENT AUTHORITY TO THE ITO WHO PASSED THE IMPUG NED ASSESSMENT ORDER. 7. THIS IS NOT A CASE WHERE THE CASE WAS TRANSFERR ED BY AN ORDER PASSED UNDER SECTION 127 OF THE INCOME TAX ACT, 196 1 BY A COMPETENT AUTHORITY. UNDER SIMILAR CIRCUMSTANCES THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. ANJALI DUA (2008) 11 DTR 9 0 AND IN THE CASE OF 6 DR.MRS.KB KUMAR VS ITO (2010) 41 DTR 423, HELD THAT THE ASSESSMENT FRAMED BY THE ITO, NEW DELHI IS WITHOUT JURISDICTIO N. 8. RESPECTFULLY FOLLOWING THE ABOVE PROPOSITIONS WE UP HOLD THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND DIS MISS THE APPEALS FILED BY THE REVENUE. 9. IN THE RESULT THE APPEALS OF THE REVENUE ARE DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD NOVEMBER,2012. SD/- SD/- (C.M.GARG ) ( J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 23 RD NOVEMBER, 2012 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR 7 1. DATE OF DICTATION: 2. DRAFT PLACED BEFORE THE AUTHOR ON: 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON: