SH Tilak singh , Nawanshehar V. ITO, Nawanshehar

ITA 191/ASR/2019

AI Insights

The case revolves around an appeal by Sh. Tilak Singh against the orders of the Income Tax Officer (ITO), Nawanshahr, and the Commissioner of Income Tax (Appeals)-1, Jalandhar. The primary contention was regarding the jurisdiction under which the ITO, Nawanshahr, conducted a reassessment for the assessment year 2009-10, which included an addition of Rs. 76,07,000 as unexplained investment. The assessee argued that the reassessment was initiated without proper jurisdictional authority and did not comply with the mandatory conditions set out in sections 147 to 151 of the Income Tax Act, 1961. The Tribunal's decision highlighted the procedural lapses in the jurisdictional authority and the improper transfer of the case between different ITOs, leading to the setting aside of the reassessment order.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 114896 (ITAT-AMRITSAR)
• Duration Of Justice: 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-11-2022
• Assessment Year: misc
• Appeal Filed On: 18-10-2022
• Other Referred Cases: Amrik Singh vs. ITO, Amritsar Tribunal, ITA No, 630/Asr/2015, (2016)142 DTR 0006, Bir Bahadur Singh Sijwali vs. ITO, Delhi Tribunal, (2015) 43 CCH 0490, Smt. Rajni vs. ITO, in ITA No. 854/Del/2016
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Borrowed satisfaction
• Section: 147; 131; 69; 148; 90; 133(6); 250; 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 Sh. Tilak Singh, Vill. Garhi Fateh Khan, Distt. Nawanshahr. [PAN: DQOPS5447E] (Appellant) Vs. ITO, Nawanshahr. (Respondent) Appellant by None. (Written Submission) Respondent by Sh. Rajiv Wadhera, Sr.DR Date of Hearing 10.11.2022 Date of Pronouncement 17.11.2022 ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax(Appeals)-1,Jalandhar, [in brevity the CIT(A)] bearing appeal No.CIT(A)-1/Jal/10336/16-17, date of order 28.01.2019, the order passed u/s 250 (6) of the Income Tax Act 1961, [in brevity the Act] for A.Y. 2009- I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 2 10. The impugned order was emanated from the order of the ld. Income Tax Officer, Nawanshahr (in brevity the AO) order passed u/s 147/143(3) of the Act, date of order 16.12.2016. The assessee took the following grounds which are extracted below: “1. That the order passed by the Hon’ble CIT(A) dated 28.01.2019 is against the law and facts of the case. 2. That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 143(3)/l47 and that too without assuming jurisdiction as per law and without complying with the mandatory conditions u/s 147 to 151 as envisaged under the Income Tax Act, 1961. 3. That having regard to the facts and circumstances of the case, Hon’ble C1T(A) has erred in law and on facts in making addition of Rs. 76,07,000/- by treating the family settlement as unexplained investment u/s 69 of the Act ignoring the facts that it was family settlement and no consideration was ever paid by the assessee. 4. That in any case and view of the matter, action of Hon’ble CIT(A) in confirming the action of Ld. AO in making addition of I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 3 Rs.76,07,000/- without considering the overwhelming evidences in the form of affidavits of assessee, his real brother and witnesses of the deed and their statements recorded, is bad in law and against the facts of the case. 5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” 2. Brief fact of the case is that the assessee was assessed u/s 147/143(3) by addition for sale of land amount of Rs.72,35,000/-. The verification was made u/s 133(6) by the ld. Income Tax Officer, Hoshiarpur. The notice U/s 148 of the Act was issued by the ld. Income Tax Officer, Nawanshahar. Accordingly, the assessment was completed. The assessee challenged both the legal and the factual ground before the bench against the order of the ld. CIT(A). As the ld. CIT(A) had uphold the order of the ld. AO. Being aggrieved the assessee filed appeal before us. 3. During hearing, none was present on behalf of the assessee. The matter was taken up with the consent of the ld. Sr. DR for adjudication. 4. The assessee has filed a written submission before the bench by challenging both the legal and factual grounds. First, we consider the legal ground by I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 4 challenging the jurisdiction u/s 148 of the Act. The assessee submitted the following submission which is extracted as below: “Submission of assessee: It is submitted that enquiry or verification letter dated 14,02,2012 and dated 07,01.2016 and dated I3,01.20l6was issued relating raising query regarding purchase of immovable property of Rs.72,35,000/-. The verification letter was issued u/s 133(6) of the Act. The section 133(6) relevant for our case, reads as under:- “Section 133: The Assessing Officer, the Deputy Commissioner (Appeals), the joint Commissioner or the Commissioner (Appeals) may, for the purposes of this Act,- (6) require any person, including a banking company or any officer thereof, to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs verified in the manner specified by the Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or the Commissioner (Appeals), giving information in relation to such points or matters as, in the opinion of the Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or the I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 5 Commissioner (Appeals), will be useful for, or relevant to, any enquiry or proceeding under this Act, Provided that the powers referred to in clause (6), may also be exercised by the Director-General, the Chief Commissioner, the Director and the Commissioner: Provided further that the power in respect of an inquiry, in a case where no proceeding is pending, shall not be exercised by any income-tax authority below the rank of Director or Commissioner without the prior approval of the Director or, as the ease may he, the Commissioner: Provided also that far the purposes of an agreement referred to in section 90 or section 90A, an income-tax authority notified under sub-section (2) of section 131 may exercise all the powers conferred under this section, notwithstanding that no proceedings are pending before it or any other income-tax authority” Sir, no proceedings were pending on the assessee as on the date when verification letter was issued. The enquiry or verification letter issued to the assessee did not mention that the approval was taken front the higherauthority. Hence the power of calling I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 6 information it/s 133(6), without the compliance of second proviso to section 133(6), would be tantamount to an Illegal exercise of power. More so, the equity letter issued to the assessee was not issued by the jurisdictional Assessing Officer. Apart from the information available obtained through verification letters, nothing is available with the Ld. AO. These jurisdictional errors rendered the verification letter ultra vires, which is not at all accepted in the eyes of law. Thatthe verification notices were issued by ITO Hoshiarpur, then ITO Jalandhar which were non jurisdictional officersand not the officers as per Section 2(7 A) of the Act and the provisions of Section 124 and 127 of the Act were not followed and considered by the aforesaid officers and no enquiry was ever conducted by the jurisdictional officers and he merely issued notices on borrowed satisfaction and without application of his own mind which is net permissible in the eyes of law. On realizing that jurisdiction was not with Hoshiarpur, ITO at Hoshiarpur transferred the case to ITO Jalandhar without considering the actual jurisdiction lies with ITO Nawanshahr and thereafter the case was transferred to ITO Nawanshahr by ITO Jalandhar without following, any procedure. "Hence, assumption of jurisdiction by the ITO at Jalandhar and Hoshiarpur was not I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 7 justified even on that count and the entire proceedings are non est.Case laws relied upon. “Amrik Singh vs. ITO, Amritsar Tribunal, 1TA No, 630/Asr/2015, (2016)142 DTR 0006, Bir Bahadur Singh Sijwali vs. ITO, Delhi Tribunal, (2015) 43 CCH 0490, and Smt, Rajni vs. ITO, in ITA No. 854/Del/2016,” 5. The ld. Sr. DR had argued and submitted the written submission which is kept in the record. The relevant para in the written submission of the ld. Sr. DR is extracted below: “2.1 It is humbly submitted that in the ground of appeal no. 1, the Ld. AR of the assessee has argued that no proceedings were pending on the assessee as on the date when the verification letter was issued and the enquiry or verification letter issued to the assessee did not mention that the approval was taken from the higher authority and thus the power of calling information u/sl33(6) of the Income tax Act, 1961 without compliance of second provision to section 133(6) would tantamount to an illegal exercise of power. In this regard, it is humbly submitted before your honour that the said ground of appeal has been duly considered I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 8 and rebutted by the Ld. CIT(A) in para no. 5.1 at page no. 16 of her order dated 28.01.2019 which is reproduced hereunder: - 5.1 On perusal of assessment record, it is observed that the ITO, Hoshiarpur-3, Hoshiarpur in his verification dated 14.02.2012 has in para 5 of his letter clearly mentioned that: - “This information is requisitioned u/s 133(6) of the I.T. Act, 1961 with the approval of Commissioner of Income Tax. “On transfer of information to ITO, Ward-2(4), Jalandhar, vide his query letter, he also made similar observation in Para 5 of his letter. Thus, the plea raised by the assessee during appeal that query letter u/s 133(6) of the Income Tax Act, 1961 was issued without the approval of the Commissioner of Income Tax is false and incorrect. Therefore, this ground of appeal is dismissed”. From the above, it is amply clear that after examining the record of the Assessing officer in the case of the assessee, the Ld. CIT(A) has clearly given the findings in her order that the ITO, Hoshiarpur-3, Hoshiarpur had in para 5 of his verification dated 14.02.2012 has clearly mentioned I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 9 that this information is requisitioned u/s 133(6) of the Income tax Act, 1961 with the approval of Commissioner of Income Tax. Moreover, the case laws of the hon’ble courts relied upon by the assessee are the same which have been relied upon by the Ld. AR of the assessee before the Ld. CIT(A). Thus, the contentions raised by the assessee in this ground of appeal has been duly addresses and rebutted by the Ld. CIT(A) in her order wherein the detailed factual discussion have been made. Moreover, no new fact on merit has been brought in record by the Ld. AR of the assessee and the undersigned place reliance on the detailed, speaking and well- reasoned order of the Ld. CIT(A)-1, Jalandhar. Thus, the contentions raised by the Ld. AR of the assessee in this ground of appeal is liable to be rejected being factually incorrect and devoid of merit.” 6. We heard the rival submission and considered the documents available in the record. The assessee has challenged the jurisdiction of the ld. AO for reopening u/s 148. The grievance of the assessee was that the issue was verified by the ld. Income Tax Officer, Hoshiarpur, who have no jurisdiction on the assessee. Later on, the order was passed by the ld. Income Tax Officer, Nawanshahar. So, the I.T.A. No.191/Asr/2019 Assessment Year: 2009-10 10 entire verification was beyond the jurisdictional. So, there is no question of formation of reasons to believe by the jurisdictional AO who has holding the concurrent jurisdiction of the assessee. So, the assessment u/s 148 is non est. Accordingly the factual ground was remained for the academic purposes need not to be discussed here. 7. In the result, the appeal of the assessee bearing ITA No.191/Asr/2019 is allowed. Order pronounced in the open court on 17.11.2022 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order