JAMIYA ARABIYA NAFE UL ULOOM EDUCATION SOCIETY,HAPUR V. INCOME TAX OFFICER (EXEMPTION) WARD, GHAZIABAD

ITA 3534/DEL/2023

AI Insights

The case involves M/s Jamiya Arabiya Nafe Ul Uloom Education Society, a registered society operating a 'madarsa', which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2011-12. The primary contention was the legality of the re-assessment proceedings initiated under sections 147 and 148 of the Income Tax Act by a non-jurisdictional officer. The assessee argued that the re-assessment was initiated without proper service of notices and that the transfer of jurisdiction was not conducted following the prescribed procedures, rendering the proceedings illegal and without jurisdiction. The Tribunal found procedural lapses in the issuance of the notice and the transfer of jurisdiction, leading to the quashing of the re-assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471965 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Other Referred Cases: Saroj Sangwan v. ITO [2024] 162 taxmann.com 704 (Delhi \\u2013 Trib.), Nishi Kapoor v. ITO [ITA no. 1556/Del/2019 dated 02.09.2019]
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: INCOME
• Keywords: Principle of natural justice
• Section: 147; 148; 144

Judgement Text

"1 ITA no. 3534/Del/2023 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3534/DEL/2023 Assessment Year: 2011-12 M/s Jamiya Arabiya Nafe Ul Uloom Education Society, Village Kurana, tehsil Dholana, Post Gulav, Hapur-245101. PAN- AACAJ 7960 K Vs Income-tax Officer, (Exemption) Ward, Ghaziabad. APPELLANT RESPONDENT Assessee represented by Shri Ankit Gupta, Adv. Department represented by Shri Om Parkash, Sr. DR Date of hearing 20.01.2025 Date of pronouncement 12.02.2025 O R D E R PER NAVEEN CHANDRA, AM: Assessee has filed an appeal against the order of National Faceless Appeal Centre (NFAC), Delhi, dated 12.10.2023 for assessment year 2011- 12, raising following grounds of appeal: 2 ITA no. 3534/Del/2023 “1. That, the assessing officer has erred, in initiating the re- assessment proceedings u/s 147 r.w.s. 148 and in passing the assessment order and making the addition to the income U/s 144 r.w.s. 147 as illegal, bad in law and without jurisdiction. 2. That, the CIT (A)/NFAC has erred in not appreciating, that, the re-assessment proceedings initiated and order 2) passed by the non- jurisdictional officer, therefore, the re- assessment proceedings and order passed is illegal, bad in law and without jurisdiction. 3. That, the CIT (A)/NFAC has erred in not appreciating, that, the re-assessment proceedings initiated U/s 148 is 3) without proper service of the notices, therefore, the proceedings initiated are illegal, bad in law and without jurisdiction. 4) Without prejudice to the above ground, that, the CIT(A)/NFAC has erred, in not appreciating, that, the transfer of the jurisdiction by ITO, Bulandshahar to ITO, Exemption, Ghaziabad without following the procedure of section 127, therefore, the whole proceedings initiated is illegal, bad in law and without jurisdiction. 5) That, the CIT (A)/NFAC has erred, in not appreciating, that, the Assessing Officer has erred, in completing the re-assessment on Income at Rs.38,34,097.00. The additions/disallowances made at Rs.38,34,097.00 are illegal, unjust, highly excessive and are not based on any material on record by the Assessing Officer. 6) That, the assessing officer has erred, in making the addition of Rs.38,34,097.00 on account of unexplained 6) CASH Deposit, in the bank account, which is highly arbitrary, unjustified and excessive. The CIT (A)/NFAC has erred in confirming the same. 7) That, the CIT(A)/NFAC and the assessing officer failed to appreciate the documentary evidences filed by the assessee and made the addition/ disallowances without any basis and reasons, which is highly presumptive, arbitrary, excessive and unjust 3 ITA no. 3534/Del/2023 8) That, the CIT(A)/NFAC has erred in passing the impugned Order on 12.10.2023, before the date of hearing fix for 19.10.2023, therefore, the order passed is against the principles of natural justice and the same has been passed without affording reasonable and adequate opportunity of being heard. 9) That the explanation given and evidence produced, material placed and available on record have not been properly considered and judicially interpreted and the same do not justify the additions/ allowances made. The observations made by the assessing officer on different issues are either not relevant or are purely based on presumptions. 10) The Appellant craves leave to add, amend, alter and or modify the grounds of appeal of the said appeal.” 2. The facts, in brief, are that the assessee is a registered society, a ‘madarsa’ and as per the Non PAN AIR information, it received deposit of Rs. 38,34,097/- in cash in Allahabad Bank, Kolkata main branch, Kolkata. As no return of income was filed the Income Tax Officer, Ward 3(2), Bulandsahar recorded his reason for reopening, duly approved by the PCIT, Ghaziabad. Thereafter, Income Tax Officer, Ward 3(2), Bulandsahar issued a notice u/s 148 of the Income tax Act dated 26.03.2018. In absence of any response from the assessee, Income Tax Officer, Ward- Exemptions, Ghaziabad completed the assessment u/s 144 r.w section 147 on 25.10.2018 by making an addition of Rs. 38,34,097/- as unexplained cash deposit. 4 ITA no. 3534/Del/2023 3. Aggrieved the assessee approached the Commissioner of Income Tax (Appeals), who confirmed the addition made by the Assessing Officer. Aggrieved further assessee is before us. 4. At the outset the learned AR of the assessee vehemently argued that the order u/s 147 has been passed by Income Tax Officer, Ward- Exemptions, Ghaziabad without having jurisdiction and there was no proper issue of notice u/s 148. Explaining the sequence of events, the ld AR pointed out that the Income Tax Officer, Ward 3(2), Bulandsahar had transferred the AIR case related to F.Y. 2010-11 of the assessee to the Income Tax Officer, Ward-Exemption, Ghaziabad (Uttar Pradesh) vide letter dated 08.03.2018, placed at page 7 of the paper book. It is the submission of the learned AR that after transferring the records from his office on 08.03.2018, the Income Tax Officer, Ward 3(2), Bulandsahar issued a notice u/s 148 of the Income Tax Act dated 26.03.2018. The learned AR vehemently submitted that once the case records has been transferred from Income Tax Officer, Ward 3(2), Bulandsahar to the Income Tax Officer, Ward-Exemption, Ghaziabad on 08.03.2018, the Income Tax Officer, Ward 3(2), Bulandsahar had no longer jurisdiction over the assessee to issue notice u/s 148. The learned AR also pointed out 5 ITA no. 3534/Del/2023 that no order u/s 127 of the Income Tax Act was passed for transferring of the case from Bulandsahar to Income Tax Officer, Ward-Exemption, Ghaziabad, therefore, the order passed by the Income Tax Officer, Exemption, Ward, Ghaziabad also becomes null and void. In view of this factual matrix, the assessment made in the case of assessee by Income Tax Officer, Ward-Exemption, Ghaziabad, is without having jurisdiction and, therefore, the same should be quashed. The learned AR relied on the decisions of ITAT in the cases of Saroj Sangwan v. ITO [2024] 162 taxmann.com 704 (Delhi – Trib.); and Nishi Kapoor v. ITO [ITA no. 1556/Del/2019 dated 02.09.2019]. 5. Per contra the learned DR heavily relied upon the order of the authorities below. 6. We have heard the rival submissions and have perused the material available on record carefully. We find that the Income Tax Officer, Ward 3(2), Bulandsahar, was having the records of the assessee when he received the AIR information. It appears that the ITO Bulandsahar found out that the assessee is madarsa, a registered society, so the proper jurisdiction belonged to Income Tax Officer, Ward-Exemption, Ghaziabad and consequently transferred the records of the assessee to Income Tax 6 ITA no. 3534/Del/2023 Officer, Ward-Exemption, Ghaziabad on 08.04.2018. We however, note that after transferring the case records to the Income Tax Officer, Ward- Exemption, Ghaziabad, the Income Tax Officer, Ward 3(2), Bulandsahar issued notice u/s 148 on 26.03.2018. Thereafter, the Income Tax Officer, Ward-Exemption, Ghaziabad completed the assessment u/s 144/147 of the Income Tax Act on 25.10.2018. 7. From the above factual matrix, we find that there is serious lapse in following the law. We find that this is a case where the Assessing Officer [ITO Ward 3(2), Bulundsahar] has transferred the case of the assessee from Bulundsahar to Ghaziabad [ITO Ward-Exemption), Ghaziabad]. Subsequent to the transfer from his office, the ITO Ward 3(2), Bulundsahar issued notice u/s 148. Furthermore, we find that the Revenue has not established that the ITO Ward 3(2), Bulundsahar had valid jurisdiction over the assessee for issuance of the notice u/s 148. Once the jurisdiction of the Income Tax Officer for issuance of notice u/s 148 is not established, the entire subsequent proceedings become invalid in the eyes of law. We accordingly hold that the re-assessment made is without jurisdiction and quash the order of the Income Tax Officer, Exemption, Ward, Ghaziabad. Grounds of the assessee are allowed. 7 ITA no. 3534/Del/2023 7. In the result, the appeal of the assessee is allowed. Order pronounced in open court on 12.02.2025. Sd/- Sd/- (MS. MADHUMITA ROY) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 12th February,2025. *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI 8 ITA no. 3534/Del/2023 Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order… 06.02.2025 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member .02.2025 3. Date on which the fair Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial 11. The date on which the file goes to the Assistant Registrar for endorsement of the order 12. Date of Despatch of the Order "