The ITO, Ward-1(2)., Visakhapatnam V. Sri P Madhava Rao, Visakhapatnam

ITA 465/VIZ/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 9186 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 1998-1999
• Appeal Filed On: 01-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S S GOPINATH
• Assessee Lawyers: C R HEMANTH KUMAR
• Keywords: Reason to believe; Reassessment proceedings
• Section: 143(1); 143(2); 148

Judgement Text

PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.465/VIZAG/2008 ASSESSMENT YEAR: 1998-99 ITO WARD-1(2) VISAKHAPATNAM VS. P. MADHAVA RAO, VISAKHAPATNAM (APPELLANT) (RESPONDENT) . PAN NO:AAEHP 5485 L APPELLANT BY: SHRI G.S.S. GOPINATH, DR, RESPONDENT BY: SHRI C.R. HEMANTH KUMAR ORDER PER SHRI B R BASKARAN, ACCOUNTANT MEMBER : THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 27.06.2008 PASSED BY THE LD CIT (A)-I, VISAKHAPATNAM AND IT PERTAINS TO THE ASSESSMENT YEAR 1998-99. 2. THE NOTICE ISSUED U/S 148 HAVING BEEN HELD AS IN VALID BY LD CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 3. THE FACTS RELATING TO THE ISSUE ARE SET OUT IN B RIEF. FOR THE ASSESSMENT YEAR 1998-99, THE ASSESSEE FILED HIS RETURN OF INCO ME BEFORE THE THEN ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-4, VISAKHAPATNAM AND THE SAME WAS ACCEPTED U/S 143(1) VIDE INTIMATION DATED 26.02.200 0. SUBSEQUENT TO REORGANIZATION OF THE CIRCLES OF THE INCOME TAX DE PARTMENT INTO RANGES, THE ASSESSEE BECAME ASSESSED TO TAX IN RANGE-2, VISAKHA PATNAM. HOWEVER, A NOTICE U/S 148 WAS ISSUED BY THE ACIT, CIRCLE-1(1) TO THE ASSESSEE AND APPARENTLY HE DID NOT HAVE JURISDICTION OVER THE AS SESSEE. THOUGH THE PAGE 2 OF 4 ASSESSEE RAISED THE MATTER OF JURISDICTION WITH THE ACIT, CIRCLE-1(1), HE DID NOT RECEIVE ANY CLARIFICATION IN THAT REGARD. SUBSEQUEN TLY THE ACIT, CIRCLE-2(1) VISAKHAPATNAM, WHO IS HAVING JURISDICTION OVER THE ASSESSEE, ISSUED NOTICE U/S 143(2) AND COMPLETED THE ASSESSMENT. IN THE APPEAL FILED BEFORE THE LD CIT (A), THE FIRST APPELLATE AUTHORITY HELD THAT THE NO TICE ISSUED U/S 148 IS VITIATED AND INVALID. THE RELEVANT OBSERVATIONS OF THE LD CI T (A) ARE EXTRACTED BELOW: 4.1 I HAVE CAREFULLY EXAMINED THE ISSUE. FROM THE EVIDENCES ON RECORD, IT IS NOTICED THAT FOR THE ASST.YEAR 1998-9 9, THE APPELLANT FILED THE RETURN OF INCOME ON 14-02-2000 BEFORE THE THEN ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4 VISAKHAPATNAM WHO ACCEPTED THE SAID RETURN U/S 143(1) OF THE ACT VIDE INTIMATION DT.26-02-2000. SUBSEQUENT TO REORGANIZATION OF THE CIRCLES INTO RANGES, THE APPELLANT WAS ASSESSED TO TAX IN RANGE- 2, VISAKHAPATNAM. THE VERY FACT THAT THE PRESENT ASSES SMENT ORDER HAS BEEN COMPLETED BY ASST.COMMISSIONER OF INCOME TA X, CIRCLE- 2(1), VISAKHAPATNAM PROVES THE FACT THAT THE APPELL ANT WAS ASSESSED TO TAX IN RANGE-2, VISAKHAPATNAM. PERUSAL OF THE RECORDS FURTHER INDICATE THAT THE IMPUGNED NOTICE U/S.148 W AS ISSUED BY ASST.COMMISSIONER OF INCOME TAX, CIRCLE-1(1), VISAKH APATNAM. WHEN THE APPELLANT RECEIVED THE SAID NOTICE ISSUED U/S.148 OF THE ACT, HE RAISED THE MATTER OF JURISDICTION VIDE LETT ER D5. 12-07-2005. THE ASSESSING OFFICER WHO ISSUED THE NOTICE U/S.148 DID NOT OFFER ANY CLARIFICATION REGARDING THE MATTER OF JURISDICT ION. IN THE ASSESSMENT ORDER AT PAGE(2) THE ASSESSING OFFICER H AD OBSERVED THAT LATER THIS CASE WAS TRANSFERRED TO ASST.COMMISSIONE R OF INCOME TAX, CIRCLE-2(1), VSP, CONSEQUENTLY, A NOTICE U/S.143(2) WAS ISSUED ON 10-08-2005. A CLOSE READING OF THE ABOVE OBSERVATION OF THE ASSESSING OFFICER INDICATE THAT THE APPELLANT WHO WAS ORIGINALLY ASSESSED TO TAX IN RANGE-2 VISAKHAPA TNAM WAS TRANSFERRED TO RANGE-1 VISAKHAPATNAM AS A RESULT OF WHICH THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE-1(1) VISAKHA PATNAM ISSUED THE NOTICE U/S.148 AND SUBSEQUENTLY AGAIN TH E CASE WAS TRANSFERRED BACK TO ASSTT.COMMISSIONER OF INCOME TAX , CIRCLE-2(1), VISAKHAPATNAM. HOWEVER, THERE IS NO DOCUMENT AVAILA BLE ON RECORD INDICATING SUCH TRANSFER OR RE-TRANSFER. THUS, IT I S CLEAR THAT WHEN THE NOTICE U/S 148 WAS ISSUED BY THE ASST.COMMISSIO NER OF INCOME TAX, CIRCLE-1(1), VISAKHAPATNAM, HE HAD NO JURISDIC TION OVER THE APPELLANT. THE HONBLE PUNJAB HIGH COURT IN LT.COL. PARAMJIT SINGH V. CIT REPORTED IN 220 ITR 446 HAVE OBSERVED THAT A N ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE AS PE R THE PROVISIONS OF PAGE 3 OF 4 SEC.124 IS COMPETENT TO INITIATE RE-ASSESSMENT PROC EEDINGS AGAINST SUCH AN ASSESSEE UNLESS THE CASE OF THE ASSESSEE HA S BEEN TRANSFERRED TO ANOTHER ASSESSING OFFICER IN ACCORDA NCE WITH THE PROVISIONS OF SEC.127. THUS, IN THE ABSENCE OF ANY TRANSFER ORDER U/S.127, NO ASSESSING OFFICER OTHER THE ONE WHO INI TIATED THE ORIGINAL PROCEEDINGS OR COMPLETED THE ASSESSMENT,SH ALL HAVE JURISDICTION TO CONTINUE WITH THE PROCEEDINGS OR EV EN TO REOPEN A CONCLUDED ASSESSMENT. IN THE INSTANT CASE, THERE IS NO ORDER U/S 127 ASSIGNING THE CASE OF THE APPELLANT TO ASST.COM MISSIONER OF INCOME TAX, CIRCLE-1(1), VISAKHAPATNAM WHO ISSUED TH E IMPUGNED NOTICE U/S 148 OF THE ACT. FURTHER, THE HONBLE GAU HATI HIGH COURT IN THE CASE OF NAGINIMARA VENEER & SAW MILLS PVT. L TD., V. DEPUTY CIT, REPORTED IN 219 ITR 527 HAVE OBSERVED THAT WHE RE AUTHORITY OF OFFICER ISSUING RE-ASSESSMENT NOTICE IS CHALLENG ED, IT IS THE DUTY OF THE REVENUE TO SHOW THAT THE OFFICER CAN EXERCIS E THE POWERS OF THE ASSESSING OFFICER, AS CONTEMPLATED UNDER THE LA W. IN THE ABSENCE OF ANY RECORD SHOWING SUCH AUTHORITY, THE I NITIATION OF RE- ASSESSMENT PROCEEDINGS CANNOT BE SUSTAINED DUE TO L ACK OF JURISDICTION IN SUCH AUTHORITY. IN THE CASE OF THE APPELLANT, ON RECEIPT OF NOTICE U/S 148 OF THE ACT, THE MATTER OF JURISDICTION WAS RAISED BEFORE THE ASST.COMMISSIONER OF INCOME TAX, C IRCLE-(1) VISAKHAPATNAM VIDE LETTER DT. 12-07-2005. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-(1), VISAKHAPATNAM FAILED TO R ESPOND TO THE SAME AND THEREBY DID NOT FURNISH ANY EVIDENCE TO TH E EFFECT THAT HE HAD IN FACT JURISDICTION OVER THE APPELLANT. UNDER THESE FACTS AND CIRCUMSTANCES, IT IS CONCLUDED THAT ASST.COMMISSION ER OF INCOME TAX, CIRCLE-1(1) HAD NO JURISDICTION OVER THE APPEL LANT WHEN THE IMPUGNED NOTICE U/S.148 WAS ISSUED AND THEREFORE, T HE SAID NOTICE IS VITIATED AND INVALID. 4. THE LD DR BY PLACING HIS RELIANCE ON THE DECISIO N OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF HINDUSTAN TRANSPORT CO. V S. INSPECTION ASSISTANT COMMISSIONER OF INCOME TAX & ANR REPORTED IN (189 IT R 326) CONTENDED THAT THE OBJECTION AS TO THE PLACE OF ASSESSMENT CANNOT BE RAISED IN APPEAL AFTER THE COMPLETION OF THE ASSESSMENT. IN OUR OPINION, THE S AID DECISION IS NOT APPLICABLE TO THE FACTS OF THE CASE, FOR THE REASON, THE ISSUE UNDER CONSIDERATION IS WITH REGARD TO REOPENING OF THE ASSESSMENT AND IT IS A W ELL SETTLED PREPOSITION THAT ONLY THE AO WHO IS HAVING JURISDICTION OVER THE ASS ESSEE CAN INITIATE THE REASSESSMENT PROCEEDINGS, AS THE SAID AO ONLY HAS T O HAVE THE REASON TO BELIEVE PAGE 4 OF 4 THAT THE INCOME HAS ESCAPED THE ASSESSMENT. IN THI S VIEW OF THE MATTER WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD CI T (A) IN HOLDING THAT THE ISSUE OF NOTICE U/S 148 IS INVALID, IN THE FACTS AND CIRCUMS TANCES OF THE CASE. 5. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22-01-2010 SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, 22 ND JANUARY, 2010 COPY TO 1 THE ITO, WARD - 1(2) , VISAKHAPATNAM 2 SHRI P. MADHAVA RAO, D.NO.11-8-13/1, PLOT NO; 103 , DASAPALLA HILLS, VISAKHAPATNAM 3 THE CIT VISAKHAPATNAM 4 THE CIT(A)-I, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM