A.V. BUKHARI, MUMBAI V. ITO WD 19(3)(1), MUMBAI

ITA 5073/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0777 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-02-2017
• Assessment Year: 1998-1999
• Appeal Filed On: 29-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAILASH C KANOJIYA LD
• Assessee Lawyers: MATHURIA LD
• Keywords: Reassessment proceedings
• Section: 69C; 143(3); 142(1); 147; 148

Judgement Text

ITA NO. 5073/MUM/2011 A.V.BUKHARI ASSESSMENT YEAR 1998-99 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 5073/MUM/2011 ( / ASSESSMENT YEAR:1998-99) A.V.BUKHARI HOMI HOUSE, FIRST FLOOR 35, POLICE COURT LANE FORT MUMBAI-400 001 / VS. INCOME TAX OFFICER WARD 19(3)(1) 307, PIRAMAL CHAMBERS PAREL MUMBAI 400 012 !' ./ ./ PAN/GIR NO. ADUPB-9647-H ( '$ /APPELLANT ) : ( %'$ / RESPONDENT ) '$ / APPELLANT BY : M.S.MATHURIA, LD. AR %'$ / RESPONDENT BY : KAILASH C.KANOJIYA, LD. DR / DATE OF HEARING : 05/05/2017 / DATE OF PRONOUNCEMENT : 19/05/2017 2 ITA NO. 5073/MUM/2011 A.V.BUKHARI ASSESSMENT YEAR 1998-99 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 1998- 1999 ASSAILS ORDER OF LD. COMMISSIONER OF INCOME TA X (APPEALS)-30 [CIT(A)], MUMBAI DATED 18/04/2011. THE ASSESSEE HAS FILED FOUR CONCISE GROUNDS OF APPEAL, OUT OF WHICH GROUND NO. 4 IS GEN ERAL IN NATURE. GROUND NO. 1 CONTEST JURISDICTION ACQUIRED BY ASSESSING OF FICER ON LEGAL GROUNDS WHEREAS GROUND NO. 2 & 3 ARE RELATED WITH MERITS OF QUANTUM ADDITIONS OF RS.10,07,028/- & RS. 80,562/- MADE U/S 68 & SECTION 69C OF THE INCOME TAX ACT RESPECTIVELY. SINCE, THE JURISDICTIONAL ISS UE GOES TO THE VERY ROOT OF THE MATTER, WE TAKE UP THE SAME FIRST. 2. BRIEFLY STATED, THE ASSESSEE, BEING RESIDENT INDIVIDUAL ENGAGED IN LEGAL PROFESSION, WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY VIDE ASSESSING OFFICER [AO] WARD 19 (3)-1 ORDER DATED 10/03/2006 WHERE THE ASSESSEE SUFFERED CERTAIN ADDI TIONS U/S 68/69C FOR RS.10,87,590/-. AS PER ASSESSMENT ORDER, THE REASSE SSMENT PROCEEDINGS WERE TRIGGERED BY ISSUANCE OF NOTICE U/S 148 DATED 22/11/2004 WHICH WAS SERVED ON THE ASSESSEE ON 30/11/2004 AND THE ASSESS EE WAS REQUIRED TO FILE ITS RETURN OF INCOME BY 30/12/2004. SUBSEQUENT LY, NOTICES U/S 143(2) & 142(1) WERE ISSUED AND SERVED UPON ASSESSEE ON 03/1 0/2005. HOWEVER, THE ASSESSEE QUESTIONED THE JURISDICTION ACQUIRED B Y THE LD. AO SINCE IT NEVER FILED ITS RETURN OF INCOME UNDER THE SAID WAR D. ON THE CONTRARY, AO 3 ITA NO. 5073/MUM/2011 A.V.BUKHARI ASSESSMENT YEAR 1998-99 DREW ATTENTION OF THE ASSESSEE TO THE FACT THAT THE ADDRESS OF THE ASSESSEE AS PER PAN DATABASE FELL UNDER HIM AND THEREFORE, H E WAS HOLDING VALID JURISDICTION TO CARRY OUT THE REASSESSMENT PROCEEDI NGS. IN TURN, THE ASSESSEE SUBMITTED ACKNOWLEDGEMENT COPY OF RETURN F OR IMPUGNED AY FILED BY HIM BEFORE AO CIRCLE 12(1)(4), AFTER PERUSING TH E SAME, LD. AO MADE EFFORTS TO TRANSFER THE FILE OF THE ASSESSEE TO CON CERNED OFFICER THROUGH HIS INSPECTOR BUT COULD NOT SUCCEED SINCE THE JURISDICT IONAL AO REFUSED TO TAKE THE SAME UPON NOTING THAT THE STATUTORY TIME PERIOD OF 6 YEARS FOR ISSUANCE OF FRESH NOTICE U/S 148 HAD ALREADY ELAPSED. THEREA FTER, LD. AO, HIMSELF PROCEEDED TO COMPLETE THE PROCEEDINGS ON THE BASIS OF EARLIER NOTICE U/S 148 ISSUED AND MADE THE IMPUGNED DISALLOWANCES. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFOR E LD. CIT(A) WITHOUT ANY SUCCESS VIDE IMPUGNED ORDER DATED 18/04/2011 AN D CONTESTED THE REASSESSMENT ON LEGAL GROUNDS AS WELL AS ON MERITS BUT COULD NOT SUCCEED SINCE LD. CIT(A) UPHOLD THE ORDER OF LD. AO ON BOTH GROUNDS. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US AND PRIMARILY A SSAILS THE ORDER ON LEGAL GROUNDS. 4. THE LD. COUNSEL FOR ASSESSEE [AR], WHILE DRAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN THE PAPER BOOK, CONTENDED THAT THE ASSESSEE, BEING A LEGAL PROFESSIONAL , WAS ALWAYS ASSESSED WITH PROFESSIONAL CIRCLE NAMELY CIRCLE/WARD 14(1) UP-TO AY 2000-01 AND THEREAFTER U NDER WARD 11(2) / 12(1)(4) SINCE AY 2001-02 ONWARDS CONSEQUENT TO REO RGANIZATION OF THE DEPARTMENT. THE ASSESSEE NEVER FILED RETURN OF INCO ME NOR ASSESSED BY 4 ITA NO. 5073/MUM/2011 A.V.BUKHARI ASSESSMENT YEAR 1998-99 ANY AO IN WARD 19. THEREFORE, THE REASSESSMENT PROC EEDINGS CARRIED OUT BY THE LD. AO WARD 19(3)-1, BEING NON JURISDICTIONA L OFFICER, STOOD VITIATED ON LEGAL GROUNDS AND THEREFORE, BAD IN LAW. OUR ATT ENTION WAS FURTHER DRAWN TO THE FACT THAT THE ASSESSEE FILED ITS RETURN OF I NCOME FOR IMPUGNED AY BEFORE ACIT (INV.) CIRCLE 14-PROFESSIONAL CIRCLE-MU MBAI ON 28/09/1998 DECLARING TAXABLE INCOME OF RS.2,69,449/- WHICH WAS PROCESSED U/S 143(1). THEREAFTER ACIT CIRCLE 11(2) ISSUED A NOTICE U/S 14 8 DATED 25/03/2005 AND THE ASSESSEE VIDE ITS LETTER DATED 25/04/2005 REQUE STED THE AO TO TREAT THE ORIGINAL RETURN FILED ON 28/09/1998 AS RETURN PURSU ANT TO THE SAID NOTICE. IN THE MEANWHILE, NON-JURISDICTIONAL AO OF WARD 19(3)( 1) ISSUED NOTICES U/S 143(3) & 142(1) BOTH DATED 03/10/2005 AND THE ASSES SEE OBJECTED TO THE SAME SINCE REASSESSMENT PROCEEDINGS WERE ALREADY UN DER PROGRESS WITH THE JURISDICTIONAL AO. FURTHER, ASSESSEE, VIDE ITS LETTER DATED 30/04/2005 REQUESTED THE JURISDICTIONAL AO OF CIRCLE 11(2) TO SUPPLY THE REASONS FOR REOPENING WHICH WERE NEVER SUPPLIED AND THE SAME VE RY FACT VITIATES THE WHOLE REASSESSMENT PROCEEDINGS IN VIEW OF VARIOUS J UDICIAL PRONOUNCEMENTS. IN SUPPORT, VARIOUS DOCUMENTS / NOT ICES / CORRESPONDENCES INCLUDING RETURN OF INCOME SINCE AY 1990-91 HAS BEEN PLACED IN THE PAPER BOOK . THE LD. AR ALSO CONTESTED THE RECEIPT / SERVICE O F NOTICE U/S 148 DATED 22/11/2004 STATED TO BE ISSUED BY AO WARD 19(3)-1. 5. PER CONTRA, LD. DR PLACED RELIANCE ON THE CONCLUSIONS DRAWN BY LD. CIT(A) AND CONTENDED THAT THE ASSESSEE DID NOT FILE HIS RETURN OF INCOME 5 ITA NO. 5073/MUM/2011 A.V.BUKHARI ASSESSMENT YEAR 1998-99 PURSUANT TO NOTICE DATED 22/11/2004 AND HENCE DEBAR RED FROM RAISING JURISDICTIONAL ISSUE NOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. FROM THE RECORD IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS BEEN FILING ITS RETURN OF INCOME SINCE 1990-91 IN CIRCLE / WARD 14(1) / 11(2) / 12(1)(4). AS EVIDENT FROM RECORD, THE ASSESSEE HAS BEEN ISSUED A NOTICE U/S 148 DATED 25/03/2005 BY ACIT 11(2), AGAINST WHICH S UBMISSION HAS BEEN MADE BY THE ASSESSEE VIDE HIS LETTERS DATED 25/04/2 005 & 30/04/2005 WHERE THE ASSESSEE, INTER-ALIA, REQUESTED THE AO TO SUPPLY THE REASONS FOR REOPENING PROCEEDINGS. THE LD. DR COULD NOT SHOW IS SUANCE / SERVICE OF ANOTHER NOTICE U/S 148 DATED 22/11/2004 AS STATED B Y THE LD. AO WARD 19(3)-1 IN THE IMPUGNED ORDER. THE REVENUE HAS FAIL ED TO SHOW THAT THE REASONS FOR REOPENING AS REQUESTED BY ASSESSEE WERE EVER SUPPLIED TO HIM WHICH AS PER SETTLED JUDICIAL PRONOUNCEMENTS VITIAT ES THE PROCEEDINGS ITSELF. THE REVENUE ALSO COULD NOT SHOW THAT WHETHER THERE WAS ANY ORDER OF THE APPROPRIATE AUTHORITY IN TERMS OF SECTION 120 / 124 OF THE INCOME TAX ACT TRANSFERRING THE JURISDICTION OF THE ASSESSEE FROM ONE AO TO ANOTHER. IT IS ALSO EVIDENT FROM THE ORDER OF LD. AO THAT HE HIMSE LF MADE AN EFFORT TO TRANSFER THE FILE TO JURISDICTIONAL OFFICER BY DEPU TING THE INSPECTOR OF THE WARD, WHICH IN ITSELF, REVEALS INVALID JURISDICTION ACQUI RED BY THE LD. AO WHO PROCEEDED WITH THE CASE UPON BEING REFUSED BY THE J URISDICTIONAL OFFICER. ALL THESE FACTORS LEADS US TO CONCLUDE THAT THE LD. AO WARD 19(3)(1) FAILED TO ACQUIRE VALID JURISDICTION U/S 147 AND THEREFORE, V ITIATES THE REASSESSMENT 6 ITA NO. 5073/MUM/2011 A.V.BUKHARI ASSESSMENT YEAR 1998-99 PROCEEDINGS. THIS BEING SO, WE ARE INCLINED TO QUAS H THE SAID PROCEEDINGS AND ALLOW ASSESSEES APPEAL. 7. SINCE WE HAVE ALREADY ALLOWED ASSESSEES APPEAL IN LEGAL GROUND, WE FIND NO REASON TO DELVE INTO THE ISSUE ANY FURTHER ON MERITS. 8. THE ASSESSEES APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MAY, 2017. SD/- SD/- (C. N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 19.05.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %'$ / THE RESPONDENT 3. - ( ) / THE CIT(A) 4. - / CIT CONCERNED 5. (/ , / , / DR, ITAT, MUMBAI 6. 01 / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI