Inder Mohan Khurana, New Delhi V. ITO, New Delhi

ITA 6553/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2042 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 22-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JANARDAN DAS
• Assessee Lawyers: S D KAPILA; R R MAURYA
• Keywords: Invalid notice; Procedural lapse; Competent authority; Assessment record
• Section: 147; 68; 148; 143(3); 142(1); 143(1); 143(2); 124(1)(a); 124(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: C: NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI ANADEE NATH MISSHRA, ACCOUNTANT ME MBER ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) INDER MOHAN KHURANA, 4/5917, DEV NAGAR, KAROL BAGH, NEW DELHI. PAN-AAAPK7219D VS ITO, WARD-51(2), ROOM NO.-1411, CIVIC CENTRE, NEW DELHI-110002. APPELLANT RESPONDENT APPELLANT BY SHRI S .D.KAPILA, ADV. & SH.R.R.MAURYA, ADV. RESPONDENT BY SHRI JANARDAN DAS, SR.DR ORDER PER ANADEE NATH MISSHRA, AM [A]. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGA INST THE ORDER DATED 20.10.2015 PASSED BY LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-17, NEW DELHI [IN SHORT LD.CIT(A)] P ERTAINING TO ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS RAISED F OLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE , THE LD.CIT(APPEAL) ERRED IN HOLDING THAT THE ASSESSING OFFICER HAD VALID JURISDICTION IN ISSUING THE IMPUGNED NOTICE U /S 148 OF THE ACT. 2. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN HOLDI NG THAT THE PROCEEDINGS U/S 147 AND THE CONSEQUENTIAL ASSES SMENT ORDER ARE NOT BAD IN LAW AND THEREFORE A NULLITY. ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 2 3. THAT THE LD.CIT(APPEAL) ERRED IN LAW AND ON FACT WAS NOT ACCEPTABLE AND THEREFORE THE ADDITION OF RS.66,50,0 00 WAS CORRECTLY MADE BY THE LD. ASSESSING OFFICER. 4. THAT THE LD.CIT(A) ERRED IN REJECTING THE CONFIR MATION LETTER AFFIDAVIT FILED BY MR. SOLO WITH ASSESSING O FFICER WITHOUT EXAMINING MR. SOLO WHO HAD PRESENTED HIMSELF FOR TH IS PURPOSE. 5. THAT THE ADDITION OF RS.66,50,000/- MADE U/S 68 BY THE LD.AO ON THE BASIS OF SUSPICION AND SURMISES MAY KI NDLY BE DELETED. [B]. RETURN OF INCOME WAS ORIGINALLY FILED BY THE A SSESSEE ON 30.10.2007 IN THE OFFICE OF ITO, WARD-33(4), NEW DE LHI. THIS RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 196 1 [IN SHORT ACT]. ON 31.03.2014, NOTICE U/S 148 OF THE ACT W AS ISSUED BY ITO, WARD-24(3), NEW DELHI, FOR INITIATING PROCEEDI NGS U/S 147 OF THE ACT AFTER RECORDING REASONS TO BELIEVE, THAT IN COME OF THE ASSESSEE HAD ESCAPED THE ASSESSMENT. THE JURISDICT ION OF ITO, WARD-24(3), NEW DELHI TO ISSUE AFORESAID NOTICE DAT ED 31.03.2014 U/S 148 R.W.S. 147 OF THE ACT WAS OBJECTED TO BY TH E ASSESSEE, CONTENDING THAT HE HAD BEEN FILING HIS RETURN OF IN COME WITH ITO, WARD-33(1), NEW DELHI. THEREFORE, THE ASSESSEE CO NTENDED BEFORE ITO, WARD-24(3), NEW DELHI THAT NOTICE ISSUED BY IT O, WARD-24(3), NEW DELHI WAS NOT VALID, AS HE DID NOT HAVE JURISDI CTION OVER THE CASE. THE OBJECTION OF THE ASSESSEE WAS REJECTED B Y ITO, WARD- ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 3 24(3), NEW DELHI VIDE LETTER DATED 01.08.2014 IN TH E FOLLOWING WORDS:- KINDLY REFER TO THE OBJECTIONS RAISED BY YOUR AR V IDE HIS LETTER DATED 28.04.2014 FOR ISSUANCE OF NOTICE U/S 148 OF THE INCOME TAX ACT. IN THIS CONNECTION, THE MAIN OBJECTION RAISED BY YO UR AR IS ON THE GROUND THAT THE ASSESSEE HAS BEEN FILING HIS INCOME TAX RETURN WITH ITO, WARD 33(1), NEW DELHI AND THAT THIS OFFICE HAS NO JURISDICTION TO ISSUE THE NOTICE U/S 148 OF THE INCOME TAX ACT. IN THIS CONNECTION, YOUR GOODSELF IS INFO RMED THAT THE NOTICE U/S 148 OF THE INCOME TAX ACT WAS ISSUED AFT ER OBTAINING PRIOR APPROVAL OF THE COMPETENT AUTHORITY IN TERMS OF RELEVANT SECTION OF THE INCOME TAX ACT. FURTHER, T HE TERRITORIAL JURISDICTION OVER THE SAINIK FARM AREA, WHERE THE A SSESSEE RESIDES FALLS IN THIS WARD AND AS PER SECTION 124(1 )(B), THE NOTICE WAS RIGHTLY ISSUED BY AN OFFICER WHO IS COM PETED TO DO SO. THUS, THE NOTICE U/S 148 HAS BEEN ISSUED BY AN ASSESSING OFFICER WHO IS COMPETED TO DO SO. THUS, THE NOTICE U/S 148 HAS BEEN ISSUED BY AN ASSESSING OFFICER WHO IS COMPETEN T TO DO SO. ACCORDINGLY, THERE IS NO MERIT IN THE OBJECTIONS SO RAISED AND THE SAME ARE HEREBY DISMISSED. YOU ARE DIRECTED TO FILE YOUR RETURN OF INCOME IMMEDIATELY IN TERMS TO PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT. [B.1]. THE ASSESSEE PETITIONED VIDE LETTER DATED 2 0.08.2014 OF JOINT COMMISSIONER OF INCOME TAX, RANGE-24, NEW DELHI REQ UESTING FOR DETERMINING THE JURISDICTION OF THE ASSESSEE. THE RELEVANT PORTION OF THE AFORESAID PETITION IS REPRODUCED HEREUNDER:- ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 4 WE FILE THIS LETTER BEFORE YOUR GOODSELF FOR THE D ETERMINATION OF THE LAWFUL JURISDICTION OF THE ABOVEMENTIONED ASSES SEE AND FOR IDENTIFICATION OF THE ASSESSING OFFICER HAVING JURI SDICTION OVER THE ASSESSEE. FACTS: 1. MR. INDER MOHAN SINGH KHURANA, AN ASSESSEE HAVI NG INCOME FROM BUSINESS, HAS BEEN REGULARLY RUNNING HI S BUSINESS OPERATIONS FROM THE PREMISES 4/5917, DEV NAGAR, KAR OL BAGH, NEW DELHI 110 005. 2. HE HAS BEEN REGULARLY FILING HIS INCOME RETURNS WITH WARD 33(1), HAVING JURISDICTION OVER THE ABOVEMENTI ONED KAROL BAGH ADDRESS. COPIES OF THE INCOME TAX RETURN ACKNOWLEDGEMENTS FOR THE LAST THREE YEARS ARE ATTAC HED HEREWITH IN SUPPORT OF THIS STATEMENT. ALSO ATTACHE D IS THE INCOME TAX RETURN ACKNOWLEDGEMENT FOR AY 2007-08 WH ICH WAS ALSO FILED WITH WARD 33. 3. ON 1.4.2014, THE ASSESSEE RECEIVED A NOTICE U/S 148, REOPENING HIS CASE FOR AY 2007-08. SUCH NOTICE WAS SENT BY THE INCOME TAX OFFICER, WARD 24(3). COPY OF THE NOT ICE IS ATTACHED HEREWITH. 4. THE ASSESSEE FILED HIS OBJECTION TO SUCH NOTICE ISSUED ON 28.4.2014, ON THE GROUND THAT THE SAME WAS ISSUED W ITHOUT JURISDICTION AND WAS THEREFORE INVALID AND NON EST. COPY OF THE OBJECTION FILED IS ALSO SUBMITTED HEREWITH. 5. THE ITO, WARD 24(3), VIDE HIS LETTER DT. 1.8.20 14, CONVEYED HIS NON-ACCEPTANCE OF THE ASSESSEE'S CONTE NTION OF INCORRECT JURISDICTION. COPY OF SUCH LETTER IS ATTA CHED. CONTENTIONS: 1. FOR THE PAST MANY YEARS, THE ASSESSEE HAS REGULA RLY BEEN ASSESSED IN WARD 33(1) WHICH INCLUDES KAROL BA GH, WHERE HE CARRIES ON HIS BUSINESS. TINS IS ALSO IN A CCORDANCE ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 5 WITH SECTION 124(1)(A) WHICH PROVIDES THAT IN RESPE CT OF PERSONS CARRYING ON BUSINESS OR PROFESSION, AN ASSESSING OF FICER WILL EXERCISE JURISDICTION IF 'THE PLACE AT WHICH HE CA RRIES ON HIS BUSINESS OR PROFESSION IS SITUATE WITHIN THE AREA.. . THUS IN ACCORDANCE WITH THE LAW, THE JURISDICTION OF THE AS SESSEE LIES WITH WARD 33(1). 2. THE LD. ITO HAS SUPPORTED HIS JURISDICTION OVER THE ASSESSEE BY BASING HIS DECISION ON SECTION 124(L)(B ). HOWEVER, THIS SECTION APPLIES TO PERSONS OTHER THAN THOSE CARRYING ON BUSINESS OR PROFESSION. FOR BUSINESS AS SESSEES, THE JURISDICTION IS DECIDED VIDE SECTION 124(1)(A). ADOPTION OF SECTION 124(L)(B) IN CASE OF BUSINESS ASSESSEE'S TO O WILL LEAD TO AN ABSURD SITUATION WHERE AN ASSESSEE WILL SIMULTAN EOUSLY FALL UNDER THE JURISDICTION OF TWO ASSESSING OFFICE RS. THE LD. ITO'S ACTION OF JUSTIFYING HIS JURISDICTION OVER TH E ASSESSEE ON THE BASIS OF SECTION 124(1)(B) LEADS TO PRECISELY S UCH A SITUATION AND IS THUS INCORRECT. 3. EVEN SECTION 124(5) OF THE INCOME TAX ACT DOES N OT COME TO THE AID OF THE DEPARTMENT TO ALLOW JURISDICTION OVER THE ASSESSEE TO WARD 24(3) AS SUCH SECTION HAS LIMITED APPLICATION IN CASES WHERE THE INCOME TAX OFFICER AND THE ASSES SEE ARE COMPLETELY LOCALIZED IN A PARTICULAR AREA AND THE I NCOME IS ALSO EARNED IN SUCH AREA AND NOWHERE ELSE. THIS HAS BEEN RULED BY THE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF KANJIMAL & SONS VS,. CIT (138 ITR 039-DEL). ON THE BASIS OF THE ABOVE IT IS CONTENDED THAT THE LD. ITO, WARD 24(3) HAD NO JURISDICTION OVER THE ASSESS EE AND THUS WAS NOT HIS 'ASSESSING OFFICER' WHO HAD AUTHOR ITY TO ISSUE A NOTICE U/S 143 UPON HIM. THUS, AS THE NOTICE IS W ITHOUT AUTHORITY AND LACKED PROPER SANCTION, THE SAME IS I NVALID AND NON EST. THEREFORE IT IS REQUESTED THAT THE ASSESSM ENT ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 6 PROCEEDINGS U/S 148 INITIATED UPON THE ASSESSEE VID E SUCH NOTICE BE CANCELLED AND OUGHT TO BE DROPPED. [B.2]. IN THE MEANTIME, ON 19.08.2014 ITSELF, ITO, WARD-24(3), NEW DELHI SUO MOTO TRANSFERRED THE ASSESSMENT RECORD TO ACIT, CIRCLE- 33(1), NEW DELHI. LATER, ON 30.10.2014, NOTICE U/S 142(1) OF THE ACT WAS ISSUED BY ACIT, RANGE-51(1), NEW DELHI IN C ONNECTION WITH THE PROCEEDINGS U/ S 147 OF THE ACT INITIATED THR OUGH THE AFORESAID NOTICE U/S 148 OF THE ACT DATED 31.03.2014. VIDE L ETTER DATED 18.12.2014, THE ASSESSEE OBJECTED TO RE-ASSESSMENT PROCEEDINGS INITIATED VIDE AFORESAID NOTICE U/S 148 OF THE ACT R.W.S. 147 OF THE ACT. THE RELEVANT PORTION OF THE AFORESAID LETTER DATED 18.12.2014 OF THE ASSESSEE WHEREIN THE ASSESSEE OBJECTED TO THE P ROCEEDINGS, BUT WITHOUT PREJUDICE FILED RETURN ALONGWITH BALANCE SH EET AND P&L A/C IS REPRODUCED AS UNDER:- DEAR SIR, IN RESPONSE TO YOUR LETTER DT.30/10/2014, THE ASSES SEE HAS TO STATE AS FOLLOWS:- 1. NOTICE U/S 148 (DY. NO. 1685 DT. 31.3.2014) WAS ISSUED BY SHRI GAJENDRA PRASHAD, ITO WARD 24(3). NEW DELHI . 2. ON RECEIPT OF THE SAID NOTICE 1 APPEARED BEFORE ITO WARD 24 (3) AND INFORMED HIM THAT THE JURISDICTION OVER MY CASE WAS WITH ITO WARD 33(1) / (4). CONSEQUENTIALLY, THE NOT ICE U/S 148 AND CONSEQUENTIAL PROCEEDINGS ARE ILLEGAL AND WITHO UT JURISDICTION. I REITERATE THE SAME. ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 7 3. I HAVE NOW RECEIVED NOTICE U/S 142(1) DT. 30.10. 2014 CALLING FOR RETURN OF INCOME FOR A.Y. 2007-08. IT I S SUBMITTED THAT NO VALID NOTICE U/S 142(1) CALLING FOR RETURN OF INCOME FOR A.Y. 2007-08 CAN NOW BE ISSUED. THE FIRST PARA OF T HE NOTICE HAS NOT BEEN STRUCK OFF. THE IMPUGNED NOTICE U/S 14 2(1) IS ILLEGAL ALSO BECAUSE IT HAS BEEN ISSUED IN PURSUANC E OF AN INVALID NOTICE U/S 148 ISSUED BY INCOME-TAX OFFICER WARD 24(3), WHO NEVER HELD JURISDICTION OVER MY CASE. 4. AS PER PARA 3 OF THE IMPUGNED NOTICE, I SUBMIT T HAT NO ANNEXURE IS NOT ENDOW! WITH THE NOTICE U/S 142(1). IT MAY KINDLY BE NOTED THAT THE NOTICE U/S 142(1.) DOES NO T SPECIFY ANY DOCUMENT TO BE PRODUCED BY ME. 5. WITHOUT PREJUDICE TO OUR MAIN SUBMISSIONS QUESTI ONING THE JURISDICTION AND LEGALITY OF THE PRESENT PROCEE DINGS, WE, IN THE SPIRIT OF COOPERATION, SUBMIT THE FOLLOWING DOC UMENTS FOR THE YEAR ENDING 31.3.2007:- I. COPY OF RETURN FILED ALONG WITH ACKNOWLEDGEMENT RECEIPT DATED 30.10.2007. II. COPY OF BALANCE SHEET & PROFIT & LOSS ACCOUNT. 6. I REQUEST THAT THE RETURN ORIGINALLY FILED BY M E ON 30.10.2007 U/S 143(1) OF THE ACT MAY BE CONSIDERED AS RETURN IN PURSUANCE OF NOTICE U/S 148. 7. IT IS ONCE AGAIN REQUESTED THAT BEFORE PROCEE DING FURTHER, YOU MAY PLEASE SUPPLY 'REASONS' RECORDED BY ITO WAR D 24 (3) BEFORE ISSUING NOTICE U/S 148 DATED 31.3.2014. [B.3]. EVENTUALLY, ASSESSMENT ORDER WAS PASSED BY I TO, WARD-51(2), NEW DELHI WHEREIN AN ADDITION OF RS.66,50,000/- WAS MADE ON ACCOUNT OF UNEXPLAINED LOAN DEEMED AS INCOME OF THE ASSESSEE U/S 68 OF THE ACT. AGGRIEVED, THE ASSESSEE FILED APPEA L BEFORE LD.CIT(A). ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 8 IN THE APPEAL FILED BY THE ASSESSEE BEFORE LD.CIT(A ), THE ASSESSEE, INTER ALIA, TOOK GROUNDS AGAINST EXERCISE OF JURISD ICTION U/S 147 R.W.S. 148 OF THE ACT, ASSUMED BY ITO, WARD-24(3), NEW DELHI VIDE AFORESAID NOTICE ISSUED ON 31.03.2014 U/S 148 OF TH E ACT. THESE GROUNDS WERE REJECTED BY LD.CIT(A) VIDE PARA 4.1 OF HIS APPELLATE ORDER DATED 20.10.2016. THE RELEVANT PORTION OF TH E ORDER OF LD.CIT(A) IS REPRODUCED FOR EASE OF REFERENCE:- 4.1. I HAVE CAREFULLY CONSIDERED THE FACTS AND CIR CUMSTANCES OF THE CASE AND ALSO THE SUBMISSION OF THE APPELLAN T BUT I DO NOT FIND ANY FORCE IN THE ARGUMENT OF APPELLANT. TH E FACT REMAINS THAT AS PER TERRITORIAL JURISDICTION OVER T HE SAINIK FARM AREA WHERE THE APPELLANT WAS RESIDING FAILS UNDER T HE JURISDICTION OF ITO, WARD-24(3), NEW DELHI, THEREFO RE, AS PER SEC.L24(L)(B) OF THE IT ACT, THE NOTICE WAS RIGHTLY ISSUED BY THE AO WHO WAS HAVING JURISDICTION OVER THE CASE AND WH O WAS COMPETENT TO DO SO AS PER THE IT ACT. THE CASE WAS REOPENED AFTER RECORDING THE REASONS AND GETTING NECESSARY A PPROVAL FROM THE JCIT, RANGE-24. UNDER THESE CIRCUMSTANCES, SINCE, THE ACTION U/S 147 WAS TAKEN BY THE ITO, WARD-24(3), NE W DELHI WHO WAS HAVING TERRITORIAL JURISDICTION OVER THE CA SE AND BEFORE ISSUING NOTICE U/S 148, DUE PROCEDURE AS REQUIRED U NDER THE INCOME TAX ACT WAS FOLLOWED, THEREFORE, I DO NOT FI ND ANY INFIRMITY IN THE AO'S ORDER IN REOPENING THE CASE A ND ISSUANCE OF NOTICE U/S 148 OF THE IT ACT. IT IS PERTINENT TO THE MENTION HERE THAT ON RECEIPT OF NOTICE U/S 148, OBJECTIONS WERE RAISED BY THE APPELLANT WHICH WERE DEALT WITH BY THE AO A ND A LETTER WAS COMMUNICATED TO THE APPELLANT WITH REGAR D TO REJECTION OF OBJECTIONS RAISED. AFTER RESTRUCTURING , THE CASE WAS ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 9 TRANSFERRED TO THE CONCERNED AO OF RANGE-51, NEW DE LHI. THE COPIES OF REASONS RECORDED WERE ALSO PROVIDED TO TH E APPELLANT. IN VIEW OF ABOVE DISCUSSION, I FIND THAT THERE WAS NO PROCEDURAL LAPSES WITH REGARD TO REOPENING THE CASE , THEREFORE, THE APPEAL ON THESE GROUNDS IS DISMISSED. [B.4]. LD.CIT(A) ALSO REJECTED THE GROUNDS TAKEN BY THE ASSESSEE ON THE MERITS OF THE AFORESAID ADDITION OF RS.66,50,00 0/-. EVENTUALLY, VIDE THE AFORESAID APPELLATE ORDER DATED 20.10.2016 , LD.CIT(A) DISMISSED THE ASSESSEES APPEAL. AGGRIEVED AGAIN, THE ASSESSEE HAS FILED THIS PRESENT APPEAL BEFORE INCOME TAX APPELLA TE TRIBUNAL (IN SHORT ITAT). [C]. IN THE GROUNDS OF APPEAL RAISED BY THE ASSESSE E IN THE PRESENT APPEAL, THE FIRST TWO GROUNDS ARE AGAINST ASSUMPTIO N OF JURISDICTION BY THE ASSESSING OFFICER, U/S 147 OF THE ACT VIDE A FORESAID NOTICE DATED 31.03.2014 ISSUED U/S 148 OF THE ACT. THE RE MAINING THREE GROUNDS IN THE PRESENT APPEAL BEFORE US IN ITAT ARE ON THE MERITS OF THE AFORESAID ADDITION AMOUNTING TO RS.66,50,000/-. IN THE COURSE OF THE APPELLATE PROCEEDINGS IN ITAT, FOLLOWING PAP ERS WERE FILED FROM THE ASSESSEES SIDE:- 1 . INCOME TAX RETURN DATED 30.10.2007 FILED WITH JURIS DICTIONAL AO WARD 33(4),NEW DELHI 2. REASONS RECORDED BY AO FOR ISSUANCE OF NOTICE U/S 1 48 WARD 24(3) NEW DELHI 3. NOTICE U/S 148 DATED 31.3.2004 ISSUED BY AO WARD 24 (3) NEW DELHI 4. ASSESSEE LETTER DATED 15.04.2014 ADDRESSED TO THE A O WARD 24(3) FOR PROVIDING THE COPY OF REASON RECORDED 5. ASSESSEE FILED 'OBJECTIONS DT. 28.04.2014 WITH AO WARD 24(3) ON JURISDICTION ALONG WITH RETURN FOR LAST THREE YEAR ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 10 6. ASSESSEE LETTER DATED 01.05.2014 BEFORE THE AO ALON G WITH COPY OF LETTER DATED 28.04.2014 CHALLENGING OF JURISDICTION OF AO WARD 2 4(3). 7. NOTICE U/S 142(1) DATED01.05.2014 ISSUED BY AO WARD 24(3) 8. ASSESSEE LETTER DATED 13.05.2014 BEFORE AO WARD 24( 3) ANNEXING COPY OF LETTER DATED 28.04.2014 CHALLENGING JURISDICTION (SR. NO. 5) 9. ASSESSING OFFICER WARD 24(3) ORDER DATED 01.08.2014 REJECTING OBJECTION. 10. ASSESSEE PETITION DATED 25.08.2014 BEFORE JOT RANGE 24 FOR DETERMINATION OF JURISDICTION OVER THE ASSESSEE ANNEXING RETURN FOR LAST THREE YEARS FILED WITH ITO WARD 33(4) NEW DELHI. NOTICE DT. 31.03.2014 U/S 148 OBJECTIONS DATED 28.04.2014 FILED WITH AO WARD 24(3) (SR. NO. 5) ASS ESSING OFFICER WARD 24(3) ORDER DATED 01.08.2014 REJECTING OBJECTIONS (SR. NO . 9) 11. NOTICE U/S 142(1) DATED 30.10.2014 ISSUED BY ACIT CIRCLE 51(1) FOR FI RST TIME. 12. ASSESSEE REPLY DATED 18.12.2014 BEFORE ACIT 51(1) N EW DELHI ALONG WITH RETURN, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 13. NOTICE U/S 143(2) DATED 18.12.2014 ISSUED BY CIRCLE 51(1) NEW DELHI 14. ASSESSEE SUBMISSION DATED 26.12.2014 FILED WITH ACI T CIRCLE 51(1) 15. SUBMISSION BEFORE ACIT CIRCLE 51(1) NEW DELHI DATED 11.02.2015 ALONG WITH L1C PREMIUM RECEIPT S. NO. PARTICULARS 1. SEQUENCE OF EVENT 2. DUSHYANT KUMAR JAIN V. DV. CIT 381 ITR 428.(DEL.) 3. DR. MRS. K.B. KUMAR V. INCOME-TAX OFFICER [2011] 12 TAXMANN.COM 318 (DELHI) & 47 SOT 192 4. SMT. PRABHAVATI S. SHAH R. CIT 231 ITR 1 (BOM.) 5. CIT V. NAVODAYA CASTLES PVT. LTD. 367 ITR 306 (DEL. ) 6. SONA ELECTRONIC CO. V. CIT 152 ITR 507(DEL). 7. ABHISHEK JAIN V. INCOME TAX OFFICER 405 ITR 1 (DEL. ) 8. PADAMSUNDARA RAO (DECD) AND OTHERS V. STATE OF TAMI LNADU AND OTHERS [2002] 255 ITR 147(S.C) 9. RETURNS & JURISDICTION 10. SARDAR BALDEV SING V. CIT 40 ITR 605(S.C) 11. SECTION 64 OF 1922ACT SR. NO. PARTICULARS 1. ASSESSMENT ORDER FOR A.Y. 2001 - 02 2. ASSESSMENT ORDER FOR A.Y. 2006 - 07 3 LETTER DT. 28.06.2016 FILED WITH CIT(A), ASSESSEE W ILING TO PRODUCE MR. SOLO FOR EXAMINATION. 4. NOTIFICATION REGARDING NEW JURISDICTION OF INCOME- TAX IN DELHI W.E.F. 15.11.2014. 5. ROHTAK & HISSAR DISTRICT ELECTRICITY SUPPLY CO. V. C IT 128 ITR 52(DEL)[HCL [C.1]. BEFORE US, LD. COUNSEL FOR THE ASSESSEE CONT ENDED THAT THE JURISDICTION OVER THE ASSESSEE VESTED IN ITO, WARD- 33(4), NEW DELHI ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 11 AT THE TIME WHEN [ON 31.03.2014] THE AFORESAID ITO , WARD-24(3), NEW DELHI ISSUED THE AFORESAID NOTICE DATED 31.03.2 014 UNDER SECTION 148 OF THE ACT FOR INITIATING PROCEEDINGS U /S 147 OF THE ACT. HE FURTHER CONTENDED THAT ORIGINAL RETURN WAS FILED BY THE ASSESSEE ON 30.10.2007 WITH THE AFORESAID ITO, WARD-33(4), N EW DELHI; AND, THAT ON 30.10.2007 THE RETURN WAS ALSO PROCESSED I N THE JURISDICTION OF ITO, WARD-33(4), NEW DELHI, U/S 143 (1) OF THE ACT. HE FURTHER CONTENDED THAT NO VALID ORDER BY ANY CO MPETENT AUTHORITY WAS IN EXISTENCE ON 31.03.2014 TRANSFERRI NG THE JURISDICTION OF THE ASSESSEE FROM ITO, WARD-33(4), NEW DELHI TO ITO, WARD-24(3), NEW DELHI. IN VIEW OF THESE FACTS , LD. COUNSEL FOR THE ASSESSEE SUBMITTED, THAT ITO, WARD-24(3), NEW D ELHI HAD NO JURISDICTION TO INITIATE PROCEEDINGS U/S 147 OF THE ACT BY ISSUE OF NOTICE DATED 31.03.2014 U/S 148. LD. DR DID NOT DI SPUTE THESE FACTS CONTENDED BY LD. COUNSEL FOR THE ASSESSEE AND RELIED ON THE ORDERS OF THE AO AND LD.CIT(A). [D]. WE HAVE HEARD BOTH SIDES. WE HAVE PERUSED MAT ERIALS ON RECORD. WE HAVE REFERRED TO JUDICIAL PRECEDENTS ME NTIONED IN THE RECORD. IT IS NOT IN DISPUTE THAT THE JURISDICTION OVER THE ASSESSEE VESTED IN ITO, WARD-33(4), NEW DELHI, AT THE TIME W HEN [ON 31.03.2014] THE AFORESAID ITO, WARD-24(3), NEW DELHI ISSUED THE AFORESAID NOTICE DATED 31.03.2104 UNDER SECTIO N 148 OF THE ACT FOR INITIATING PROCEEDINGS U/S 147 OF THE ACT. IT IS ALSO NOT IN ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 12 DISPUTE, THAT ORIGINAL RETURN WAS FIELD BY THE ASSE SSEE ON 30.10.2007 WITH THE AFORESAID ITO, WARD-33(4), NEW DELHI. IT IS FURTHER NOT IN DISPUTE THAT ON 30.10.2007 THE RETUR N WAS ALSO PROCESSED IN THE JURISDICTION OF ITO, WARD-33(4), N EW DELHI, U/S 143(1) OF THE ACT. IT IS FURTHERMORE NOT IN DISPUT E THAT NO VALID ORDER BY ANY COMPETENT AUTHORITY WAS IN EXISTENCE O N 31.03.2014 TRANSFERRING THE JURISDICTION OF THE ASSESSEE FROM ITO, WARD-33(4), NEW DELHI TO ITO, WARD-24(3), NEW DELHI. IN ANY CA SE, BY TRANSFERRING THE ASSESSMENT RECORDS OF THE ASSESSEE TO CIRCLE-33(1), NEW DELHI ON 19.08.2014 THE AFORESAID ITO, WARD-24( 3), NEW DELHI HAS ALREADY, BY NECESSARY IMPLICATION, ADMITTED IN EFFECT THAT THE JURISDICTION OVER THE ASSESSEE DID NOT VEST IN WARD -24(3), NEW DELHI. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT ITO , WARD-24(3), NEW DELHI LACKED JURISDICTION TO ISSUE AFORESAID NOTICE U/S 148 DATED 31.03.2014 FOR INITIATION OF PROCEEDINGS U/S 147 O F THE ACT. IF AN ASSESSING OFFICER ISSUED A NOTICE TO AN ASSESSEE U/ S 148 OF THE ACT FOR INITIATING PROCEEDINGS U/S 147 OF THE ACT, WITHOUT HAVING JURISDICTION OVER THE ASSESSEE; SUCH A NOTIC E IS VOID AB INITIO, AND AN ASSESSMENT ORDER PASSED IN CONSEQUENCE THER EOF IS NON EST , DEVOID OF ANY LEGAL FORCE. FOR THESE VIEWS, WE TAKE SUPPORT FROM THE ORDER OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF DUSHYANT KUMAR JAIN VS DCIT [2016] 66 TAXMANN.COM 1 26 [DELHI] IN WHICH THE HONBLE HIGH COURT HELD AS UNDER:- ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 13 16. .IT IS ONLY THE AO WHO HAS ISSUED THE ORIG INAL ASSESSMENT ORDER DATED 13 TH APRIL 2009 FOR AY 2007-08 UNDER SECTION 143(3) OF THE ACT WHO IS EMPOWERED TO EXERC ISE POWERS UNDER SECTION 147/148 TO RE-OPEN THE ASSESSMENT. T HIS IS BECAUSE HE ALONE WOULD BE IN A POSITION TO FORM REA SONS TO BELIEVE THAT SOME INCOME OF THAT PARTICULAR AY HAS ESCAPED ASSESSMENT [D.1]. WE ALSO TAKE SUPPORT FROM THE FOLLOWING PREC EDENTS IN SUPPORT OF OUR AFORESAID VIEW:- [I] DR.MRS. K.B.KUMAR VS ITO [2011] 12 TAXMANN.COM 318 (DELHI) & 47 SOT 192; [II] ITO VS KRISHAN KUMAR GUPTA [2008] 16 DTR 1 (DE LHI-TRIB.); [III] RANJEET SINGH VS ASSTT. CIT [2009] 120 TTJ (D ELHI) 517; AND [IV] CIT VS SMT ANJALI DUA [2008] 174 TAXMAN 72 (DE LHI) [D.2]. IN VIEW OF THE FOREGOING, WE QUASH THE AFORE SAID NOTICE DATED 31.03.2014 ISSUED U/S 148 OF THE ACT WHEREBY PROCEE DINGS U/S 147 OF THE ACT WERE INITIATED; AND WE ACCORDINGLY ANNUL THE AFORESAID ASSESSMENT ORDER DATED 30.03.2015 PASSED U/S 148/14 3(3) OF THE ACT. THUS, GROUND NOS. 1 AND 2 IN THE PRESENT APPE AL FILED BY THE ASSESSEE ARE ALLOWED. [D.3]. IN VIEW OF OUR DECISION TO QUASH THE AFORESA ID NOTICE AND ANNUL THE ASSESSMENT ORDER, THE REMAINING THREE GRO UNDS OF APPEAL RELATING TO MERITS OF THE AFORESAID ADDITION OF RS. 66,50,000/- DO NOT NEED TO BE ADJUDICATED, BEING PURELY ACADEMIC IN N ATURE. HENCE, ITA NO:- 6553/DEL/2016 (ASSESSMENT YEAR: 2007-08) PAGE | 14 GROUND NOS. 3, 4 AND 5 RAISED BY THE ASSESSEE IN TH E PRESENT APPEAL ARE NOT ADJUDICATED. [E]. FOR STATISTICAL PURPOSES, THE APPEAL OF THE AS SESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH DAY OF SEPTEMBER, 2019. SD/- SD/- (AMIT SHUKLA) (ANADEE NATH M ISSHRA) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED: 06.09.2019 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI