SHRI PRIT PAL SINGH , HOSHIAR PUR V. INCOME TAX OFFICER WARD- 3, HOSHIAR PUR

ITA 409/ASR/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8255 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 30-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 191

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. 409/Asr/2019 Assessment Year: 2011-12 Sh. Prit Pal Singh, Hoshiarpur [PAN: EDBPS6037K] Vs. Income Tax Officer, Ward-3, Hoshiarpur (Appellant) (Respondent) Appellant by : Sh. J. S. Bhasin, Adv. Respondent by: Sh. S.M.Surendranath, Sr. DR Date of Hearing: 19. 05.2022 Date of Pronouncement: 12.08.2022 ORDER Per Anikesh Banerjee, JM: The instant appeal was filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-1, Jalandhar [in brevity the CIT(A)], bearing Appeal No. 10207/2018-19/CIT(A)-1/Jal dated 22.03.2019, passed u/s 250(6) of the Income Tax Act, 1961 [in brevity the Act], in respect of Assessment Year 2011-12. The impugned order was generated from the order of the Ld. ITA No. 409/Asr/2019 Tarsem Singh v. ITO 2 Income Tax Officer, Ward-3,Hoshiarpur [in brevity the A.O.] passed u/s 143(3)/147 of the Income Tax Act, 1961 dated 18.12.2018. 2. Brief fact of the case is that based on departmental information, amount of Rs. 16,05,041/- on account of surrender value of Equity Growth Pension Fund of Bajaj Allianz Life Insurance Company Ltd., was credited to the bank account of the assessee, maintained with Bank of Baroda, Hoshiarpur through RTGS on 12.04.2010. The assessee had not filed any return for A.Y. 2011-12. The notice u/s 148 of the Act was issued by Dy. CIT (International Taxation). After the detailed verification, the assessment was completed u/s 143(3)/147 and the addition was made on undisclosed deposit amount to Rs.16,05,041/-. The assessment was completed by the ld. ITO, Ward-3, Hoshiarpur. Aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) upheld the order of the Ld. AO. Being aggrieved, the assessee filed an appeal before us. 3. During hearing, the Ld. counsel of the assessee first argued the technical ground and chronologically mentioned the issue related to reopening u/s 148 of the Act which is as follows: “1. That Id.CIT(A) erred in upholding the impugned assessment, when the statutory notice u/s.148 was undisputedly issued by a non-jurisdictional AO, i.e. DCIT (Intl.Taxation) Chandigarh, whereas the assessment was passed by the ITO Hoshiarpur. ITA No. 409/Asr/2019 Tarsem Singh v. ITO 3 2. That the Id.CIT(A) was also not justified in upholding the impugned order, when the statutory notice u/s 148, was never issued by him. 3. That the assumption of jurisdiction u/s.148 by the AO has also been wrongly upheld by the Id.CIT(A). 4. That having deleted the addition of Rs. 16,05,041/-, the Id.CIT(A) was not legally competent to direct the AO to assess the same in AY 2010-11.” The Ld. counsel Mr. J. S. Bhasin, Adv. vehemently argued and mentioned that the Ld. ITO, Hoshiarpur is the proper jurisdiction on the assessee. But the notice u/s 148 which was issued by the Ld. DCIT (International Taxation) is bad in law. So, the entire assessment procedure is non-est. Ld. counsel Mr. Bhasin further mentioned that the issue was agitated before the Ld. CIT(A) in page no. 2 para 3 is extracted as follows: “3. Ground of appeal no.l & 2 are challenging the jurisdiction of the assessing officer. 3.1 I have carefully considered the facts of the case and submissions of the appellant. It is observed that assessment in the case was completed u/s 143 r.w.s 147 of the Income Tax Act, 1961. During the assessment proceedings, the assessee did not raise any objectior| regarding the issue of jurisdiction. At this stage no such issue can be raised by the assessee. In this regard reliance is placed on the judgement of Hon’ ble P&H High Court in the case of SUBHASH CHANDER vs. COMMISSIONER OF INCOME TAX, IT Appeal No. 129 of 2007, as under:- Having heard learned counsel for the parties at a considerable length, we find that the questions of law deserve to be answered against the appellant-assessee. It would be appropriate to make a reference to the provisions of s. 124 of the Act, which read as under : "124. Jurisdiction of AO—(1) Where by virtue of any direction or order issued under sub-s. (1) or sub-s. (2) of s. 120, the AO has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction— (a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the^prea, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the areal and (b) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an AO has jurisdiction to assess any person, the question shall be determined by the Director General or the Chief CIT or the CIT; or where the ITA No. 409/Asr/2019 Tarsem Singh v. ITO 4 question is one relating to areas within the jurisdiction of different Directors General or Chief CITs or CITs, by the Directors General or Chief GITs or CITs concerned or, if they are not in agreement, by the Board or by such Director General or Chief CIT or CIT as the Board may, by notification in the Official Gazette, specify. (3) No person shall be entitled to call in question the jurisdiction of an AO— (a) where he has made a return under sub-s. (1) of s. 115WD or under sub-s. (1) of s. 139, after the expiry of one month from the date on which he was served with a notice under sub-s. (1) of s. 142 or sub-s. (2) of s. 115WE or sub-s. (2) of s. 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-s. (1) of s. 142 or under s. 148 for the making of the return or alongwith questionnaire issued for compliance to notice issued u/s 148 issued on 28.03.2018.The Hon’ble Supreme Court in ACIT Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd., (291 ITR 500) has held that at the stage of issue of reopening of the assessment U/s 147 of the I.T. Act, the Assessing Officer is only required to come to a prima facie opinion of escapement of income. Section 147 authorizes and permits the Assessing Officer to assess or reassess the income chargeable to tax if he has reason to believe that for any assessment has escaped assessment. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained that fact by legal evidence or conclusion. Referring to the earlier decision of Hon’ ble Apex Court in the case of Central Provinces Manganese Ore Ltd., reported in 191 ITR 662, it was held that at the stage of initiation of proceedings, the final outcome of the proceedings is not relevant. At "the stage of issue of notice, the only question to be seen is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the material would conclusively prove the escapement of income is not the concern at the stage of issue of notice U/s 148. This is so because the formation of belief by the Assessing Officer is within the realm of the subjective satisfaction.” The Ld. counsel relied on the judgment of coordinate Bench in the case of Smt. Paramjit Kaur v. ITO Ward (2), Phagwara in ITA No. 65 & 140/Asr/2019 dated 14.10.2021. The relevant para is extracted as follows: “6. Having heard rival contentions, perusing the relevant documents, assessment record and case law cited, it is admitted fact that ITO Ward-4 Phagwara, had no Jurisdiction over the case who has recorded the reasons and issued the notice u/s 148 and thereafter transferred the file to the Jurisdictional ITO i.e. Ward-2 Phagwara who in turn framed the assessment. The issue of jurisdiction in this regard is now settled law by orders of the Amritsar Bench, Agra Bench, Chandigarh Bench and Delhi Bench of ITAT ITA No. 409/Asr/2019 Tarsem Singh v. ITO 5 where it has been held that firstly the AO who records the reasons and issues a notice u/s 148 should be a Jurisdictional AO and secondly the assessment also has to be framed by the same AO who initiated the proceedings u/s 147, 148. In our view, the assessment order passed by the ITO, Ward-2, Phagwara is without jurisdiction and the same is not in accordance with law, hence required to be quashed. The finding of the Ld. CIT(A) on the issue of jurisdiction and thereby confirming the assessment order are unwarranted and perverse and such a finding against the settled position of law cannot be approved. 7. In the above view, we accept the grievance of the assessee genuine. We hereby quash the assessment order and the impugned order of the CIT(A) for the aforesaid reasons.” 4. The Ld. Sr. DR only relied on the order of CIT(A) and argued for sustaining the addition. 5. We heard the rival submissions and relied on the documents available in the record. The assessee has a territorial jurisdiction as well as full jurisdiction under the ld. ITO, Hoshiarpur. The assessment u/s 143(3)/147 was completed by the same ITO, Hoshiarpur. But non jurisdictional authority, the ld. DCIT, (International Taxation) had issued the notice u/s 148 which is made the assessment infractuous. We relied on the judgment of Co-ordinate Bench in the case of Sh. Sukhdev Singh Kang vs. ITO, Nakokar ITA No. 185/Asr/2018 dated 21/12/2021. The relevant part is extracted as follows:- “In our considered view, as the Income Tax Officer, Nakodar had framed the assessment vide his order passed u/s 143(3)/148, dated 26.12.2016 without validly assuming jurisdiction u/s 147 of the Act, therefore, the same cannot be sustained and is liable to be quash subject of course to t he pending notices being ed. We, thus, in terms of our aforesaid ITA No. 409/Asr/2019 Tarsem Singh v. ITO 6 observations quash the assessment framed by the Income-Tax Officer, Ward Nakodar, vide his order passed u/ss. 143(3)/148, dated 26.12.2016, The Ground of appeal No. 1 is allowed in terms of our aforesaid observations.” 6. So, the notice issued by the ld. DCIT, International Taxation is beyond jurisdiction by violating the territorial jurisdiction. So, the entire assessment is itself infractuous from point of law. The addition amount of Rs 16,05,041/- is directed to be deleted. Therefore, the order passed U/s 147/143(3) cannot be sustained and liable to be quashed. 7. In the result, the appeal of the assessee ITA No. 409/Asr/2019 is allowed. Order pronounced in the open court on 12.08.2022 Sd/- Sd/- (Dr. M. L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member *GP/Sr. PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(A), (4) The CIT concerned (5) The Sr. DR, I.T.A.T (6) The Guard File True Copy By Order