Smt. Puspanjali Mishra, Bhubaneswar V. ITO Ward- 3(4), Bhubaneswar

ITA 315/CTK/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1101 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 16-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B PANDA
• Keywords: Reopening of assessment; Principle of natural justice; Additional evidence; Question of law; Assessment record; Reason to believe; Reassessment proceedings
• Section: 292BB; 143(2); 13; 147; 148; 54

Judgement Text

P A G E 1 | 16 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO . 315 /CTK/201 7 ASSESSMENT YEAR : 2012 - 2013 SMT. PUSPANJALI MISHRA, 204, LIFE STYLE GREEN APARTMENT, AT - PATIA (KIIT ROAD), BHUBANESWAR. VS. ITO, WARD 3(4), BHUBANESWAR. PAN/GIR NO. AMSPM 3055 D (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI B.PANDA, SR ADV REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 14 / 1 2 / 20 20 DATE OF PRONOUNCEMENT : 17 / 1 2 /20 20 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2, BHUBANESWAR DATED 27.2.2017 FOR THE ASSESSMENT YEAR 2012 - 13 . 2. THE APPEAL IS TIME BARRED BY 08 DAYS. THE ASSESSEE HAS FILED CONDONATION PETITION DATED 16.8.2017 SUPPORTED BY AFFIDAVIT STATING THE REASONS FOR FILING THE APPEAL BELATEDLY. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES AND CONDONATION PETITION, I AM SATISFIED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FOR FILING THE APPEAL LATE. HENCE, I CONDONE THE DELAY OF 8 DAYS AND ADMIT THE APPEAL FOR ADJUDICATION. ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 2 | 16 3 . THE ASSESSEE HAS FILED THE FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT AFTER GIVING THE APPEAL EFFECT THE COMPUTATION OF CAPITAL GAIN INCOME FOR THE ASSESSMENT YEAR 2012=13 MADE BY THE ASSESSING OFFICER AT RS - 2,84,871 (APPEAL EFFECT ORDER DT - 11.04.201) IS ARBITRARY AND UNLAWFUL AS THE ASSESSING OFFICER AS WELL AS THE APPEAL COMMIS SIONER SHOULD HAVE CONSIDERED THE EXEMPTION U/S 54 OF IT ACT, TOWARDS PURCHASE OF ANOTHER HOUSE/FLAT AT LIFE STYLE GREEN, PATIA, BBSR. (DETAIL OF DOCUMENTS FILED IN THE COURT/FORUM BELOW ARE ENCLOSED HEREWITH.) 2. FOR THAT RELATING TO SOURCE OF CASH DEP OSITS OF RS - 29,20,000 IN THE APPELLANTS BANK A/C SHOULD NOT HAVE BEEN REJECTED BOTH BY THE ASSESSING OFFICER AND BY THE APPEAL COMMISSIONER. THE CONFIRMATION OF CASH DEPOSITS OF RS - 10,50,000 ( OUT OF 25LAKHS CASH DEPOSITS ) SHOULD NOT HAVE BEEN REJECTED BY THE APPEAL COMMISSIONER (REFERENCE INTERNAL PAGE - 7 OF APPEAL COMMISSIONERS ORDER DT - 27.02.2017) INDICATING THE SAME CONSTITUTED TO BE ADDITIONAL EVIDENCE, EVEN THOUGH THE APPELLANT HAD NO SCOPE TO FILE THE SAME AT THE ASSESSMENT STAGE. TOWARDS THE SOUR CE OF BALANCE CASH DEPOSITS OF RS 420,000 (RS 29,20,000 - RS25,00,000) BOTH THE FORUMS BELOW SHOULD HAVE ACCEPTED THE SAME TO BE OUT OF APPELLANTS PAST SAVINGS INCLUDING SALE OF OLD FURNITURE OF PERVIOUS FLAT ETC. 3. FOR THAT BOTH THE ASSESSING OFFICER AND THE APPEAL COMMISSIONER SHOULD NOT HAVE ADDED THE NON CASH DEPOSITS OF RS - 5,64,945 IN APPELLANTS BANK AS UNEXPLAINED INCOME EVEN THOUGH THE DEFINITE SOURCE OF SUCH NON CASH DEPOSITS WERE EXPLAINED BEFORE THE FORUM BELOW. 4 . THE ASSESSEE HAS FILED AN APPLICATION FOR ADMITTANCE OF AN ADDITIONAL GROUND OF APPEAL , WHICH READS AS UNDER: 1. FOR THAT ALTHOUGH THE ASSESSMENT COMPLETED U/S.143(30/147 OF THE I.T.ACT, BUT THE NOTICES U/S.148 AND 143(2) OF THE I.T.ACT WERE NEVER ISSUED NOR SERVED ON THE APPELLANT WHICH ARE REQUIRED IN THE STATUTE AND IN ABSENCE OF SUCH NOTICES, ASSESSMENT MADE AND ORDERS PASSED ARE LIABLE TO BE QUASHED AND ANNULLED IN TOTO. ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 3 | 16 2. FOR THAT THE LD AO HAS RECORDED THE DIFFERENT DATES FOR COMPLIANCE BUT IN FACT N O SUCH NOTICES SERVED ON THE APPELLANT, THEREFORE, THE OBJECTIONS MADE AS WELL AS FAILURE OF NATURAL JUSTICE VIS - - VIS UNLAWFULLY PROCEEDED TO COMPLETE THE ASSESSMENT CAUSE ILLEGALITY, THUS THE ORDER OF ASSESSMENT IS BAD IN LAW. ASSESSEES APPLIC A TION FOR ADMISSION OF ADDITIONAL GROUNDS: 5 . LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITIONAL GROUND BEING LEGAL IN NATURE, MAY BE TAKEN UP FIRST, BECAUSE IN THE EVENT OF THIS ADDITIONAL GROUND OF APPEAL BEING ADMITTED, AND BEING DECIDED IN FAVOU R OF THE ASSESSEE, ALL OTHER GRIEVANCES RAISED IN THE ORIGINAL GROUNDS WILL BE RENDERED INFRUCTUOUS. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE GRIEVANCES RAISED IN THE ADDITIONAL GROUNDS WERE NOT RAISED BEFORE THE AUTHORITIES BELOW, BUT CONTENDS TH AT THE ASSESSEES FAILURE TO DO SO DOES NOT AFFECT HIS LEGAL RIGHTS TO RAISE THE ABOVE LEGAL PLEAS BEFORE THE TRIBUNAL. RELIANCE IS PLACED ON HONBLE SUPREME COURT JUDGMENT IN THE CASE OF NTPC VS. CIT, (229 ITR 383). IT IS SUBMITTED THAT THE ADDITIONAL GR OUND OF APPEAL PERTAINS TO A PURELY LEGAL GROUND AND ALL THE MATERIAL FACTS, NECESSARY FOR ITS DISPOSAL, ARE ALREADY ON RECORD. IT IS NOT DISPUTED THAT THIS GRIEVANCE WAS NOT RAISED BEFORE THE AUTHORITIES BELOW BUT RELIANCE IS PLACED ON THE DECISION OF H ONBLE BOMBAY HIGH COURT IN THE CASE OF INVENTORS INDUSTRIAL CORPORATION LTD VS CIT, 194 ITR 548 (BOM) IN SUPPORT OF THE PROPOSITION THAT A GROUND BY WHICH THE JURISDICTION TO MAKE ASSESSMENT ITSELF IS CHALLENGED CAN BE URGED BEFORE ANY OF THE AUTHORITY F OR THE FIRST TIME. IT IS CONTENDED THAT, AS HELD BY HONBLE SUPREME COURT IN THE CASE OF NTPC ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 4 | 16 (SUPRA), THE POWERS OF THE TRIBUNAL ARE NOT REALLY CONFINED TO THE ISSUES ARISING OUT OF ORDER OF THE CIT(A) BUT ALSO TO THE QUESTIONS OF LAW ARISING FROM FACTS WHICH ARE ALREADY ON RECORD. IT IS SUBMITTED THAT THE ADDITIONAL GROUND BE ADMITTED AND DISPOSED OF THE SAME ON MERITS. 6 . REPLYING TO ABOVE, LD SR. DR OPPOSED TO THE ADMISSION OF ADDITIONAL AND FURTHER SUBMITTED THAT THE ASSESSEE HAD ALL THE OPPORTUNITIES TO RAISE THIS GRIEVANCE BEFORE THE ASSESSING OFFICER AND BEFORE THE CIT(A) BUT HE HAS BYPASSED THESE FORUMS AND APPROACH THE TRIBUNAL DIRECTLY . IT IS SUBMITTED THAT WHILE TRIBUNAL MAY INDEED HAVE POWERS TO ADMIT AN ADDITIONAL GROUND OF APPEAL, BUT THERE HAVE TO BE GOOD REASONS FOR ASSESSEE NOT RAISING SUCH A GRIEVANCE BEFORE THE FIRST APPELLATE AUTHORITY. 7 . AFTER HEARING THE RIVAL SUBMISSIONS, I AM INCLINED TO ADMIT THE ADDITIONAL GROUND OF APPEAL SINCE, AS ASSESSEE RIGHTLY CONTENDS, IT IS A PURE QUESTION OF LAW CHALLENGING THE VERY ASSUMPTION OF JURISDICTION TO PASS IMPUGNED ORDER WHICH GOES TO THE ROOT OF THE CASE AND MERELY BECAUSE THE ASSESSEE DID NOT RAISE THIS GRIEVANCE EARLIER THE ASSESSEE CANNOT BE PREVENTED FROM RAISING THIS GRIEVANCE NOW. IN VIEW OF THESE FACTS, AND IN VIEW IF THE LAW LAID DOWN BY HONBLE SUPREME COURT IN NTPCS CASE (SUPRA), I ADMI T THE ADDITIONAL GROUND S OF APPEAL AND PROCEED TO DEAL WITH THE SAME. ADDITIONAL GROUNDS OF ASSESSEE : 8. LD A.R. OF THE ASSESSEE NARRATED THE SEQUENCES REGARDING THE ACTION TAKEN BY THE AO FOR REOPENING OF ASSESSMENT U/S.143(3)/147 OF THE ACT. HE ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 5 | 16 SUBMITTED THAT ON 2.2.2013, THE ASSESSEE FILED THE RETURN OF INCOME BUT NOTICE UNDER SECTION 148 VIDE DATED 6.12.2013 OF THE ACT WAS BY THE ASSESSING OFFICER ON 6.12.2013 WITHOUT RECORDING OF REASONS OF PRIOR OBJECTIONS IN THE ORDER SHEET AND ALSO NO SA TISFACTION NOTE OF SUCH ISSUE GOT INDICATED AND THE DATE OF SERVICE OF NOTICE U/S.148 OF THE ACT. HE FURTHER SUBMITTED FROM THE COPY OF THE ORDER/NOTE SHEETS FROM 6.12.2013 TO 9.6.2017 AS SUBMITTED BY LD DR ON 25.11.2020 AT PAGES 11 TO 16 OF DEPARTMENTAL PAPER BOOK, THAT ON 15.4.2014, NOTICE U/S.142(1) STATING TO HAVE BEEN SERVED BY THE AO ON 25.4.2014 BUT NO ENTRY WAS MADE IN THE ORDER SHEET AND IN THE MEANTIME THE JURISDICTION OF ASSESSMENT WAS TRANSFERRED AS STATED BY THE ITO - 2(4) ON 30.1.2014 GOT REC ORDED IN THE ORDER SHEET TO THE I TO - 3(4), THEN THE NOTICE U/S.142(1) OF THE ACT ISSUED ON 15.4.2014 FIXING THE DATE OF HEARING ON 25.4.2014 BY THE ITO WARD 2(4) WAS ILLEGAL SINCE IT HAD NO JURISDICTION TO HOLD THE ASSESSMENT WHICH HAD GONE BEFORE THAT TO THE ITO WARD 3(4) THEN THE NOTICE ISSUED GOT INVALID TO ENFORCE THE PROCEEDINGS. LD A.R. SUBMITTED THAT NO SERVICE OF NOTICE U/S.148 WAS MADE TO ENFORCE THE ASSESSEE FOR FILING THE RETURN OF INCOME. 9. LD A.R. FURTHER SUBMITTED THAT FROM THE ABOVE FACTS, IT WAS APPARENT THAT THE REQUIREMENTS OF MANDATORY SECTION 147 OF THE ACT WAS NOT SATISFIED. CONSEQUENTLY, IN ABSENCE OF ANY SATISFACTION HAVING BEEN RECORDED BY THE AO THAT INCOME HAS ESCAPED ASSESSMENT BY REASONS OF THE FAILURE ON THE PART OF THE ASSESS EE TO DISCLOSE FULLY AND TRULY ALL MATERIAL ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 6 | 16 FACTS NECESSARY FOR ITS ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, ASSUMPTION OF JURISDICTION U/S.147 OF THE ACT WAS FAILURE AND, THEREFORE, THE IMPUGNED NOTICE U/S.148 AND ALL CONSEQUENT ORDERS CAN NOT BE SUSTAINED. IT WAS THUS SUBMITTED BY LD COUNSEL FOR THE ASSESSEE THAT REOPENING OF ASSESSMENT SHOULD BE HELD TO BE BAD IN LAW AS THE AO IN THE PRESENT CASE HAS NOT RECORDED ANY SATISFACTION SPECIFICALLY ALLEGING THAT ESCAPEMENT OF INCOME WAS DUE TO THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. HE SUBMITTED THAT THE NOTICE U/S.148 OF THE ACT HAS NEVER SERVED ON THE ASSESSEE, THUS THE NOTICE IS INVALID AND, THEREFORE, ASSESSMENT IS IN VALID AND BAD IN LAW. FOR THIS PROPOSITION, HE RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: I) ITO VS OM PRAKASH KUKERJA, (2016) 178 TTJ (CHD)1 II) SURESH KUMAR SHEETLANI VS ITO (2018) 257 TAXMAN 338 (ALL) III) MRS SHUBHASHRI PANICKER VS CIT, 403 I TR 434 (RAJ) IV) HARJEET EURAJPRAKASH GIROTRA VS UOI & ORS (2019) 311 CTR 287 V) CIT VS ESHAAN HOLDING PVT LTD., 344 ITR 541 (DEL) 10. REPLYING TO ABOVE, LD SR DR SUBMITTED THAT NOTICE U/S.148 OF THE ACT WAS ISSUED TO THE ASSESSEE IN THE ADDRESS AVAILABLE IN THE ASSESSEES PAN DATE BASE I.E. PUSPANJALI MISHRA, D/O BALAKRISHNA MISHRA, C - 004, R B PALACE, BOMIKHAL, NEAR EKAMRA CINEMA HALL, BHUBANESWAR, ORISSA - 751010. HE SUBMITTED TH AT A NOTICE U/S.142(1) OF THE I.T.ACT, 1961 DATED 15.4.2014 WAS ISSUED TO THE ASSESSEE IN THE ADDRESS PROVIDED BY THE ASSESSEE IN HER ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 7 | 16 ITR I.E. MS PUSPANJALI MISHRA, FLAT NO.201, BASUDEV ENCLAVE, KANAN VIHAR, SWARNAPURI, PATIA, BHUBANESWAR - 751024. SUBSEQU ENT NOTICE S U/S.142(1) W ERE ISSUED TO THE ASSESSEE ON 14.10.2014 AND 30.12.2014. LD DR REFERRED TO THE COPY OF ORDER SHEET AND LETTER OF THE ASSESSEE AT PAGE 10 T0 1 6 (FILED BY THE DEPARTMENT), THE ASSESSEE APPEARED ON 9.3.2015 IN RESPONSE TO NOTICE DATED 2.2.2015 AND FILED WRITTEN SUBMISSIONS, WHICH PROVES THAT THE ASSESSEE HAS COMPLIED WITH THE NOTICE AND FILED THE WRITTEN SUBMISSIONS. FURTHER, LD D.R. SUBMITTED THAT ON 17.3.2015, THE ASSESSEE APPEARED AND FILED ANOTHER WRITTEN SUBMISSIONS ALONGWITH SOM E DOCUMENTS WHICH WERE PLACED ON RECORD. HE SUBMITTED THAT THE ASSESSEE IS FREQUENTLY CHANGING HER ADDRESS AS IS EVIDENT FROM THE ACKNOWLEDGEMENT OF RETURN. THE NOTICES WERE SENT TO THE DIFFERENT ADDRESSE S GIVEN BY THE ASSESSEE WITH THE DEPARTMENT. HENC E, IT CANNOT BE CLAIMED BY THE ASSESSEE THAT THE NOTICE ISSUED BY THE REVENUE IN CONNECTION WITH ASSESSMENT PROCEEDINGS DOES NOT HOLD GOOD. 11. LD D.R. FURTHER SUBMITTED THAT THE ASSESSEE HAS NEITHER ASKED THE REASONS RECORDED NOR RAISED ANY OBJECTION REGARDING REOPENING OF ASSESSMENT DURING THE ENTIRE COURSE OF ASSESSMENT PROCEEDINGS. IF SHE HAD ANY OBJECTION, SHE COULD HAVE RAISED IN THE COURSE O F ASSESSMENT PROCEEDINGS TO BE DISPOSED BY THE AO, AS HAS BEEN HELD BY HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS ( INDIA ) LTD VS ITO (123 TAXMAN 802). LD D.R. SUBMITTED THAT SINCE THE ASSESSEE HAS APPEARED AND ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 8 | 16 CO - OPERATED WITH THE PROCEEDINGS BEFORE THE AO, AS IS EVIDENT FROM THE ORDER SHEET PRODUCED BEFORE THE BENCH, IN TERMS OF SECTION 292 BB OF THE ACT, SHE CANNOT RAISE A FRESH OBJECTION AFTER COMPLETION OF THE ASSESSMENT . HE FURTHER SUBMITTED THAT THE GROUNDS REGARDING REASONS RECORDED AND NON - SERVICE OF NOTICE WAS NOT RAISED BEFORE THE FIRST APPELLATE AUTHORITY AND, THEREFORE, THE ASSESSEE CANNOT FILE THE SAME AS AN ADDITIONAL GROUND BEFORE THE TRIBUNAL. 12. IN REJOINDER, LD A.R. SUBMITTED THAT BEFORE THE ISSUE OF NOTICE U/S.148 OF THE ACT , THE AO SHOULD HAVE RECORDED THE REASONS FOR INITIATING REASSESSMENT PROCEEDINGS. HE FURTHER REFERRED TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS TATA SONS LIMITED, ( 2019) 267 TAXMAN 13 (BOM.)(HC), WHEREIN, IT WAS HELD THAT I SSUE OF NOTICE PRIOR TO RECORDING OF REASONS FOR REOPENING OF ASSESSMENT IS HELD TO BE WITHOUT JURISDICTION AND DESERVES TO BE QUASHED AND ALSO DEFECTS COULD NOT BE CURED BY INVOKING S.292B OF THE ACT. HE SUBMITTED THAT HONBLE GUJARAT HIGH COURT IN THE CASE OF RAJOO ENGINEERS LTD VS DCIT, 218 CTR (GUJ) 53, HELD THAT REASONS TO BE RECORDED BEFORE ISSUE OF NOTICE AND VALIDITY OF NOTICE CHALLENGED GOT QUASHED THE ORDER OF ASSESSMENT. SIMILAR VIEW HAS BEEN TAKEN BY HONBLE RAJASTAHAN HIGH COURT IN THE CASE OF CIT VS. SHIVRATAN SONI, 279 ITR 261 (RAJ). LD A.R. ALSO REFERRED TO THE DECISION OF HONBLE P&H HIGH COURT IN THE CASE OF CIT VS K.G.MADAN, 275 ITR 294 (P&H), WHEREIN, IT WAS HELD THAT REASSESSMENT NOTICE ISSUED U./S. 148 OF THE ACT BUT ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 9 | 16 REASONS WERE RECORDED AFTER ISSUE OF NOTICE, HENCE, THE REASSESSMENT IS INVALID. THEREFORE, IT IS MANDATORY REQUIREMENT OF THE ACT THAT THE AO MUST RECORD REASONS STATING ESCAPEMENT OF INCOME BY THE ASSESSEE FOR RELEVANT ASSESSMENT YEAR FOR ASSUMPTION OF VALID JURISDICTION TO INITIATE REASSESSMENT PROCEEDINGS AND TO ISSUE NOTICE U/S.148 OF THE ACT. 13. IN REPLY TO SUBMISSION OF LD D.R. THAT THE JURISDICTION WAS NOT CHALLENGED BY THE ASSESSEE BEFORE THE LD CIT(A) AND NOW CHALLENGED BEFORE THE TRIBUNAL AS AN ADDITIONAL GROUND, LD A.R. SUBMITTED THAT THE POINT OF JURISDICTION CAN BE RAISED AT ANY STAGE AND ANY POINT OF TIME AND EVEN BEFORE THE AUTHORITY AND WITH JURISDICTION, THE ORDER IS A NULLITY AND ITS INVALIDITY CAN BE AGITATED EVEN AT THE POINT OF EXECUTION AND COLLATERAL PROCEEDINGS. HE SUBMITTED THAT THE REVENUE HAS FILED AFFIDAVIT, WHEREIN, IN PARA NO.3, IT HAS BEEN STATED THAT FROM PAGE NO.99 TO 116 OF THE PAPER BOOK OF THE ASSESSEE, THE RELEVANT MATERIALS WERE NOT AVAILABLE BEFO RE THE AO IN COURSE OF ASSESSMENT AND THIS BEING THE STRANGE ALLEGATION MADE BY THE DEPARTMENT, THE AO HAD NO TRUTH AT ALL BECAUSE OF THE RECORDINGS OF THE MATERIALS IN THE ORDER SHEET WERE NOT MADE SINCE THE ORDER SHEET OF THE DEPARTMENT HAD NOT DISCLOSED THE PRIOR OBJECTIONS AND ALLEGATION NECESSITATED TO ISSUE AND INITIATE THE ACTION U/S.147 OF THE ACT. HENCE, THE AFFIDAVIT OF THE ITO FILED BEFORE THIS BENCH IS NOT ACCEPTABLE. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF HONBLE DELHI HIGH COUR T IN THE CASE OF PRABHAT AGARWAL VS. DCIT, (2018) 169 DTR 282 (DELHI)(HC) ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 10 | 16 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. THE SHORT QUESTION BEFORE US FOR ADJUDICATION AS TO WHETHER THE REOPENING OF ASSESSMENT U/S.147 OF THE ACT IS JUSTIFIED WITHOUT RECORDING SATISFACTION BY THE ASSESSING OFFICER. THE A SSESSEE IN THIS CASE HAS CHALLENGED THE JURISDICTION OF THE ASSESSING OFFICER FOR TAKING UP ACTION U/S.148 OF THE ACT. 15. THE CONTENTION OF THE DEPARTMENT IS THAT THE ASSESSEE HAS FURNISHED SEVERAL ADDRESSES OF THE ASSESSEE WHILE APPLYING PAN, FILING I NCOME TAX RETURNS AND SUBSEQUENTLY CHANGING HER ADDRESSES , ETC. THEREFORE, NOTICE U/S.148 AND ALSO STATUTORY NOTICE U/S.14 2 ( 1 ) WERE ISSUED TO THE ASSESSEE AS PER THE GIVEN ADDRESSES . IN RESPONSE TO SAID NOTICES, THE ASSESSEE PERSONALLY APPEARED AND PARTI CIPATED IN THE ASSESSMENT PROCEEDINGS AS WELL AS FILED WRITTEN SUBMISSIONS. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAD NOT RECEIVED ANY NOTICE(S) IN CONNECTION WITH THE ASSESSMENT PROCEEDINGS. HE SUBMITTED THAT T HE ASSESSEE IS FREQUENTLY CHANGING HER ADDRESS, AS IS EVIDENT FROM ACKNOWLEDGEMENT OF RETURN, HENCE, THE DEPARTMENT WAS FORCED SENT THE NOTICES IN VARIOUS ADDRESS FURNISHED TO THE DEPARTMENT AND IT IS PROVED THAT WHEN THE ASSESSEE HAS PARTICIPATED THE PROC EEDINGS, THEN IT IS VIVIDLY CLEAR THAT THE ASSESSEE HAS RECEIVED THE NOTICES. 16. BEFORE REOPENING THE ASSESSMENT, AN ASSESSEE COULD RECEIVE A NOTICE UNDER SECTION 148 IN CASE THE A SSESSING O FFICER BELIEVES THAT SUCH ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 11 | 16 ASSESSEES INCOME CHARGEABLE TO TAX MIGHT HAVE ESCAPED ASSESSMENT. IN CASE THE ASSESSEE HAS PROOF SUPPORTING HIS BELIEF, THE AO WOULD RECORD HIS REASONS IN WRITING AND SEND THE ASSESSEE NOTICE UNDER SECTION 148. THE A SSESSING O FFICER CANT JUST CHANGE HIS MIND AND G O FOR RE - INVESTIGATION WITHOUT A VALID REASON. IN CASE THE ASSESSEE HAS DISCLOSED ALL THE DOCUMENTS AND CORRECT INFORMATION DURING THE ORIGINAL ASSESSMENT, THE ASSESSING OFFICER CANNOT SEND A NOTICE TO THE ASSESSEE FOR REASSESSING THE SAME DOCUMENTS. SOME FACTS OR NEW DOCUMENTS WHICH SHOW THAT THE INCOME HAS ESCAPED ASSESSMENT SHOULD COME INTO THE LIGHT. IN CASE THE NEW INFORMATION OR DOCUMENTS COME TO LIGHT INDICATING THAT THE INDIVIDUAL HAS CONCEALED INCOME, THEN THE AO COULD TAKE ACTION AGAINST SUCH ASSE SSEE UNDER SECTION 147 AND 148. 17. THE CONTENTION OF LD A.R. IS THAT NO REASONS WERE RECORDED BEFORE ISSUE OF NOTICE U/S.148 OF THE ACT. THE BENCH SPECIFICALLY ASKED LD D.R. TO FURNISH THE REASONS RECORDED BY THE ASSESSING OFFICER FOR ISSUING NOTICE U/S.148 OF THE ACT. LD DR PRODUCED THE ORDER SHEET STARTING FROM 6.12.2013 TO 9.6.10 1 7 BUT NO WHERE IT IS MENTIONED THAT THE REASONS ARE RECORDED . LD D.R., IN ALL FAIRNESS, SUBMITTED THAT ON PERUSAL OF ENTIRE REASSESSMENT PROCEEDINGS FILE/FOLDER, HE IS UNABLE TO FIND ANY COPY OF THE REASONS RECORDED BY THE AO PRIOR OR AFTER ISSUING NOTICE U/S.148 OF THE ACT ON 6.12.2013. EVEN BEFORE INITIATING THE ACTION U/S.147 OF THE ACT , IT IS THE ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 12 | 16 PRE - CONDITION UPON THE AO TO RECORD HIS REASONS FOR TAKING UP ACTION U/S.147 OF THE ACT. 18. IN THE CASE OF TATA SONS LTD (SUPRA), IT IS HELD THAT IN ABSENCE OF RECORDING NO PRIOR REASONS BY THE AO TAKING ACTION BY ISSUE OF NOTICE U/S.148 OF THE AT IS TO BE QUASHED BECAUSE REASONS WERE RECORDED ON 19.3.2009 BUT NOTICE U/S.148 OF THE ACT WAS ISSUED ON 6.3.2009, HENCE THE ORDER OF ASSESSMENT WAS DISMISSED EVEN SECTION 292BB COULD NOT BE OPERATED. EVEN IN THE PRESENT CASE OF THE ASSESSEE, KEEPI NG IN VIEW SUBMISSION OF LD D.R. WE SAFELY PRESUME THAT NO REASONS WERE RECORDED AND SERVED ON THE ASSESSEE BY THE AO BEFORE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AND ISSUING NOTICE U/S.148 OF THE ACT. 19. THE HONBLE BOMBAY HIGH COURT IN THE CAS E OF MAVANY BROS VS CIT & ANR, (2015) 120 DTR 0286 (BOM) HAS HELD AS UNDER: THE JURISDICTION UNDER SECTION 147/148 OF THE ACT IS AN EXTRAORDINARY JURISDICTION AND CAN ONLY BE EXERCISED WHEN CONDITION PRECEDENT AS PROVIDED IN SECTIONS 147/148 OF THE ACT A RE SATISFIED. IT IS THE APPELLANTS CASE THAT THE AFORESAID CONDITIONS ARE NOT SATISFIED INASMUCH AS IN THE ABSENCE OF THE AO HAVING THE ORIGINAL RETURN OF INCOME AVAILABLE IT WOULD NOT BE POSSIBLE FOR HIM TO HAVE A REASONABLE BELIEF THAT INCOME CHARGEABL E TO TAX HAS ESCAPED ASSESSMENT. THIS ISSUE OF JURISDICTION ACCORDING TO THE RESPONDENT REVENUE COULD ONLY HAVE BEEN RAISED BEFORE THE AO AND NOT HAVING BEEN RAISED BEFORE HIM, THE APPELLANT HAD WAIVED ITS RIGHTS TO RAISE THE SAME. THE APPELLANT HAVING S UBMITTED TO THE JURISDICTION OF THE AO CANNOT NOW CHALLENGE THE SAME. THIS IS NOT ENTIRELY CORRECT. IT IS WELL SETTLED THAT MERE ACQUIESCENCE WILL NOT GIVE JURISDICTION TO AN AUTHORITY WHO HAS NO JURISDICTION. IN FACT THIS COURT IN CIT VS ITSC A ORS (20 14) 365 ITR 87 (BOM) HAS HELD THAT MERE PARTICIPATION BY A PARTY IN PROCEEDINGS WITHOUT JURISDICTION WILL NOT VEST/CONFER ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 13 | 16 JURISDICTION ON THE AUTHORITY. REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT IS A JURISDICTIONAL FACT AND ON LY ON ITS SATISFACTION DOES THE AO TO ACQUIRE JURISDICTION TO ISSUE NOTICE. THUS THIS LACK OF SATISFACTION OF JURISDICTIONAL FACT CAN NEVER CONFER JURISDICTION AND AN OBJECTION TO IT CAN BE RAISED AT ANY TIME EVEN IN APPEAL PROCEEDINGS. THE MERE FACT THA T NO OBJECTION IS TAKEN BEFORE THE AO WOULD NOT BY ITSELF BESTOW JURISDICTION AS THE AO. SUCH AN OBJECTION CAN BE TAKEN IN APPEAL ALSO. MOREOVER, THE APEX COURT IN ITS RECENT DECISION IN KANWAR SINGH SAINI V HIGH COURT OF DELHI, 2012 (4) SCC 307 HAS HELD THAT IT SETTLED POSITION THAT CONFERMENT OF JURISDICTION IS A LEGISLATIVE FUNCTION AND CANNOT BE CONFERRED BY CONSENT OF PETITIONER. AN ISSUE OF JURISDICTION CAN BE RAISED AT ANY TIME EVEN IN APPEAL OR EXECUTION. 20. RECORDING OF REASONS BEFORE ISSUE OF NOTICE IS MANDATORY HENCE REASSESSMENT WAS HELD TO BE BAD IN LAW AS HELD IN CIT V. BLUE STAR LTD , 301 CTR 38 (BOM) (HC). 21. IN PRASHANTH PROJECTS LTD V. CIT [2011] 333 ITR 368 , (BOM) (HC), IT WAS HELD THAT BEFORE THE TRIBUNAL THE QUESTION OF SUPPLY O F REASONS RECORDED BY THE AO WAS RAISED BY THE ASSESSEE AND IT WENT TO THE ROOT OF THE MATTER. ON THIS ISSUE, THE BENCH DIRECTED THE DEPARTMENTAL REPRESENTATIVE TO PRODUCE THE RECORDS TO VERIFY AS TO WHETHER THE REASONS WERE RECORDED BY THE AO AND WHETHER SAME WERE SUPPLIED TO THE ASSESSEE. THE AO APPEARED WITH THE ASSESSMENT RECORDS BUT THE RELEVANT RECORDS WERE NOT TRACEABLE OR WERE NOT AVAILABLE. IT WAS FOUND THAT EVEN AFTER COMPLETION OF THE ASSESSMENT/APPELLATE PROCEEDINGS THE ASSESSEE WAS REQUESTING THE AO TO SUPPLY HIM THE COPY OF THE REASONS. BUT, TILL THE DATE OF HEARING I.E. ON 19.09.2014 I.E. EVEN AFTER 18 YEARS OF THE ISSUANCE OF ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 14 | 16 NOTICE U/S. 148 OF THE ACT, THE AO HAS NOT BEEN ABLE TO PROVE THAT THE ASSESSEE WAS SUPPLIED COPY OF THE REASONS RECORDED. HENCE, THE ASSESSMENT WAS QUASHED. 22. IN THE CASE OF PRABHAT AGARWAL ( SUPRA), IT IS HELD THAT I T IS SETTLED POSITION IN LAW THAT A NEW REASONS CANNOT BE ALLOWED TO BE INTRODUCED OR SUPPLIED BY WAY OF AFFIDAVIT. VALIDITY OF AN ORDER MUST BE JUDGED BY THE REASONS SO MENTIONED THEREIN. REASONS RECORDED CANNOT BE SUPPLEMENTED BY FILING AFFIDAVIT OR MAK ING ORAL SUBMISSION. DEPARTMENT CANNOT AMEND OR CHANGE THE NOTICE OR REASONS, NOTICEE OR THE ASSESSEE SHOULD NOT BE PREJUDICED OR BE TAKEN BY SURPRISE. IF THE REOPENING IS BASED ON SOME INFORMATION OR MATERIAL, THE SAME SHOULD HAVE A REFERENCE IN THE REASONS RECORDED WHICH WILL HAVE TO BE THE BASIS FOR REOPENING. THE AO IS EXPECTED TO DEAL WITH THE ASSESSEES OBJECTION VIS A VIS THE REASONS RECORDED AND N OT TO ANY EXTERNAL MATERIAL. 2 3 . IN CIT VS. ESHAAN HOLDING P. LTD . (SUPRA), IT IS HELD THAT BEFORE ISSUE THE NOTICE U/S. 148 OF THE ACT, IT IS EXPECTED OF THE AO TO HAVE CHECKED UP IF THERE IS ANY CHANG E OF ADDRESS BECAUSE VALID SERVICE OF NOTICE OF REOPENING THE ASSESSMENT IS A JURISDICTIONAL MATTER AND THIS IS A CONDITION PRECEDENT FOR A VALID REASSESSMENT. FURTHER, THOUGH THE CORRECT ADDRESS OF THE ASSESSEE HAS BEEN CONSTANTLY MENTIONED IN THE RETURN OF INCOME QUITE FOR A ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 15 | 16 LONG TIME. HOWEVER, NOTICE WAS NOT SENT TO SUCH ADDRESS, AS A RESULT OF WHICH REASSESSMENT PROCEEDINGS AND NOTICE U/S. 148 READ WITH SECTION 147 IS ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 2 4 . THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF MITHLESH KUMAR TRIPATHI VS CIT [2006] 280 ITR 16 (ALL), IS VERY RELEVANT. IT WAS, INTER - ALIA, HELD IN THIS CASE THAT THE REASONS RECORDED UNDER SECTION 148(2) OF THE ACT, MUST BE COMMUNICATE D TO THE ASSESSEE ALONG WITH THE NOTICE UNDER SECTION 148, IN VIEW OF THE PRINCIPLES OF NATURAL JUSTICE. THIS MANDATORY PRE - CONDITION HAS NOT BEEN COMPLIED BY THE AO BEFORE TAKING ACTION U/S.147 OF THE ACT AND ISSUE NOTICE U/S.148 OF THE ACT. 25 . IN THIS CASE, THERE IS NO PROPER ISSUE OF NOTICE U/S.148 OF THE ACT AND NOTICE ISSUED WITHOUT RECORDING THE REASONS. FROM THE ORDER SHEET DATED 30.1.2014, IT IS RECORDED THAT THE JURISDICTION OF THE CASE WAS TRANSFERRED TO ITO WARD - 3(4) BUT ON 15.11.2 014, THE ITO WARD 2(4) HAD ISSUED NOTICE U/S.142(1) OF THE ACT ON SAME ISSUE AND, THEREFORE, THE NOTICES ISSUED TO THE ASSESSEE ARE CLEARLY IN MESS. 2 6 . ON A CAREFUL CONSIDERATION OF THE MATTER IN LIGHT OF THE ABOVE DECISIONS , I HOLD THAT THE ASSUMPTION OF JURISDICTION U/S. 147 BY THE AO IS WITHOUT REASONS RECORD AND PROPER SERVICE OF NOT ICE U/S. 148 OF THE ACT AND IS BAD IN LAW AND REASSESSMENT PROCEEDINGS AND ALL CONSEQUENT ORDERS INCLUDING REASSESSMENT ORDER DATED 17.3.2015 ARE CONSEQUENTLY LIABLE TO BE ITA NO.315/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 P A G E 16 | 16 QUASHED. I ACCORDINGLY, QUASH THE SAME. SINCE I HAVE QUASHED THE REASSESSMENT PROCEEDINGS ON THE LEGAL GROUND, OTHER GROUNDS TAKEN BY THE ASSESSEE IN ORIGINAL GROUNDS ON THE MERITS OF THE CASE ARE NOT BEING ADJUDICATED UPON. 2 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 17 /1 2 /20 20 . S D/ - ( CHANDRA MOHAN GARG) JUDICIAL MEMBER CUTTACK; DATED 17 / 1 2 /20 20 B.K.PARIDA, SPS (OS) COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : SMT. PUSPANJALI MISHRA, 204, LIFE STYLE GREEN APARTMENT, AT - PATIA (KIIT ROAD), BHUBANESWAR 2. THE RESPONDENT. ITO, WARD 3(4), BHUBANESWAR. 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//