Smt. Vijaya Devi Deshlahra V. Principal Commissioner Of Income Tax- 2 Raipur and The Assistant Commissioner of Income Tax Circle- 2(1) Bhilai and Additional/ Joint/ Deputy/ Assistant Commissioner of Income Tax / income Tax Officer National E-Assessment Centre, Delhi and Income Tax Officer Ward- 2/2 Bhilai

WPT/255/2021

AI Insights

Smt. Vijaya Devi Deshlahra filed two writ petitions challenging the notices issued under Section 148 of the Income Tax Act, 1961, by the Assessing Officer, Circle-2 (1), Bhilai. The petitioner argued that the Assessing Officer lacked territorial jurisdiction and that the notices were issued without the proper sanction of the Competent Authority. The respondents contended that the jurisdiction was correctly established based on the PAN details and that the necessary sanction was obtained. The court examined the procedural adherence in issuing the notices and the jurisdictional claims based on the petitioner's address changes and PAN migration.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 812713 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 29-03-2022
• Assessment Year: misc
• Other Referred Cases: Prashant Chandra vs. Commissioner of Income Tax, Harjeet Surajprakash Girotra vs. Union of India, Pr. Commissioner of Income Tax-6 Vs. M/s N.C. Cables Ltd., Chhagan Chandrakant Bhujbal s. Income Tax Officer & ors, Raymond Wollen Mills Ltd. vs. ITO Centre Excise XI, Range Bombay & ors
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AJAY KUMRANI
• Assessee Lawyers: GAGAN TIWARI; AMAN PANDEY
• Keywords: Income Tax; Jurisdiction; Notice; PAN migration; Sanction
• Section: 148; 124; 151; 139A

Judgement Text

"1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No.253 of 2021 • Smt. Vijaya Devi Deshlahra W/o Shri Parasmal Deshlahra, aged about 76 years 201-B, Pushpratna Castle, 12 Kanchanbagh, Indore- 452001, Madhya Pradesh ---- Petitioner Versus 1. Principal Commissioner Of Income Tax- 2 Raipur, Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, 492001 Chhattisgarh 2. The Assistant Commissioner of Income Tax Circle- 2(1) Bhilai Aayakar Bhawan, Opposite Geet Talkies, New Civic Centre, Sector- 6, Bhilai, District Durg Chhattisgarh 3. Additional/ Joint/ Deputy/ Assistant Commissioner of Income Tax / income Tax Officer National E-Assessment Centre, Delhi (Now Known As National Faceless Assessment Centre), Ministry of Finance (Department of Revenue) North Block, New Delhi- 110001. 4. Income Tax Officer Ward- 2/2 Bhilai Aayakar Bhawan, Opposite Geet Talkies, New Civic Centre, Sector- 6, Bhilai, District- Durg, (C.G.) ---- Respondents WPT No.255 of 2021 • Smt. Vijaya Devi Deshlahra W/o Shri Parasmal Deshlahra, aged about 76 years 201-B, Pushpratna Castle, 12 Kanchanbagh, Indore- 452001, Madhya Pradesh ---- Petitioner Versus 1. Principal Commissioner Of Income Tax- 2 Raipur, Aayakar Bhawan, Central Revenue Building, Civil Lines, Raipur, 492001 Chhattisgarh 2. The Assistant Commissioner of Income Tax Circle- 2(1) Bhilai Aayakar Bhawan, Opposite Geet Talkies, New Civic Centre, Sector- 6, Bhilai, District Durg Chhattisgarh 3. Additional/ Joint/ Deputy/ Assistant Commissioner of Income Tax / income Tax Officer National E-Assessment Centre, Delhi (Now Known As National Faceless Assessment Centre), Ministry of Finance (Department of Revenue) North Block, New 2 Delhi- 110001. 4. Income Tax Officer Ward- 2/2 Bhilai Aayakar Bhawan, Opposite Geet Talkies, New Civic Centre, Sector- 6, Bhilai, District- Durg, (C.G.) ---- Respondents For Petitioner : Mr. Gagan Tiwari & Mr. Aman Pandey Advocates. For Respondents : Mr. Ajay Kumrani, Advocate on behalf of Mr. Amit Chaudhary, Advocate. Hon'ble Mr. Justice Parth Prateem Sahu Order on Board 29.3.2022 1. As common question is involved in above two writ petitions, therefore they are being heard together and decided by this common order. 2. Petitioner has filed above two writ petitions challenging Notice Dated 6.5.2020 (Annexure P-3) issued under Section 148 of the Income Tax Act, 1961 (for short 'the Act of 1961'), on the ground that Assessing Officer, Circle-2 (1), Bhilai, District Durg, who has issued impugned notice, is having no territorial jurisdiction to issue such notice and there is no prior sanction/approval of the Competent Authority. 3. Mr. Gagan Tiwari, learned counsel for petitioner in both petitions would submit that in the year 2012 petitioner shifted from Bhilai, District Durg (CG) to Indore (Madhya Pradesh). On 25.5.2017 petitioner submitted an application before the Assessing Officer / Income Tax Officer, Circle-2 (1), Bhilai Distinct Durg (CG) intimating change of her address from Bhilai to Indore. 3 Petitioner has been filing income tax returns showing her residential address to be of Indore (Madhya Pradesh), as is appearing from acknowledgement of income tax returns filed along with writ petition. After giving intimation about her shifting from one State to another, the Assessing Officer at Bhilai (CG) is not having jurisdiction to issue notice under Section 148 of the Act of 1961 to petitioner. Hence impugned notice is per-se illegal and void. Referring to Section 124 of the Act of 1961 which deals with jurisdiction of Assessing Officers, he submits that petitioner is neither residing nor engaged in any business or profession within area of jurisdiction assigned to Assessing Officer, Circle-2 (1), Bhilai. Petitioner is residing in Indore (MP) and trading in shares, having investment in stock market, therefore, in the given facts of case, provisions of Section 124 (1) (b) of the Act of 1961 is attracted and Assessing Officer of the area where petitioner is residing is having jurisdiction i.e. Assessing Officer of Indore (Madhya Pradesh). Hence, the impugned notice (Annexure P-3) issued by Assessing Officer, Circle-2 (1), Bhilai is liable to be quashed as he is not having any jurisdiction to issue impugned notice to petitioner. In support of his contention, he places reliance upon judgment of the High Court of Allahabad in case of Prashant Chandra vs. Commissioner of Income Tax reported in (2016) 387 ITR 88 and judgment of the High Court of Bombay in Harjeet Surajprakash Girotra vs. Union of India reported in (2019) 266 Taxman 29 (Bombay). 4 He further contended that for initiating proceedings under Section 148 of the Act of 1961, proper sanction under Section 151 of the Act of 1961 from the Competent Authority is pre- condition. Unless and until there is proper sanction, notice under Section 148 of the Act of 1961 cannot be issued. The Competent Authority without properly considering material placed before it and without due application of mind, granted sanction/approval under Section 151 of the Act of 1961 by writing the word “approved'. Hence, the impugned notice issued to petitioner being not in accordance with law is liable to be quashed. In support of his contention, he places reliance upon decision of a Division Bench of High Court of Delhi dated 11.1.2017 in ITA No.335/2015 between Pr. Commissioner of Income Tax-6 Vs. M/s N.C. Cables Ltd. Referring to documents placed on record along with rejoinder as Annexure R-1, he submits that procedure for migration of Permanent Account Number (PAN) is uploaded in website of Income Tax Department, according to which, for migration of PAN from one State to another, an assessee is required to submit an application before current Assessing Officer, who shall process such application and pass necessary order for transfer of PAN to new Assessing Officer. Petitioner herein submitted application for migration of PAN on 25.3.2017 before Assessing Officer at Bhilai, which has not been processed by Assessing Officer for the reasons best known to him. Hence, the petitioner cannot be held liable in any manner. 5 In support of this submission, he refers to provisions of Section 139A of the Act of 1961 according to which an assessee is only required to give intimation about any change in his/her address or migration from one State to another State, which has been done by petitioner by submitting application with Assessing Officer. He also pointed that along with reply respondents have annexed manual sanction/approval granted by Competent Authority for issuance of notice under Section 148 of the Act of 1961 to petitioner. This sanction/approval bears date '12.5.2020' which means sanction/approval was granted after issuance of impugned notice to petitioner. Hence, on this ground alone the notice issued is liable to be quashed. Reliance is placed on the order dated 8.12.2021 passed by Bombay High Court in Writ Petition No.3597/2019, parties being Chhagan Chandrakant Bhujbal s. Income Tax Officer & ors. 4. Mr. Ajay Kumrani, learned counsel for respondents would submit that submission of learned counsel for petitioner that Assessing Officer, Circle-2 (1), Bhilai, District Durg (CG) is having no jurisdiction to issue notice under Section 148 of the Act of 1961 to petitioner is not sustainable from the documents placed on record by petitioner along with writ petition. He submits that as per submission of learned counsel for petitioner itself, petitioner was earlier residing in Bhilai, District Durg (CG), she submitted her income-tax returns to the jurisdiction of Assessing Officer, Bhilai and even as on date all income tax 6 returns are submitted by petitioner within jurisdiction of Assessing Officer, Circle-2 (1), Bhilai, which is apparent from the acknowledgement of the Income Tax return. Action by Assessing Officer is based on PAN details of petitioner available with the Department. As PAN details of petitioner show jurisdiction of Assessing Officer at Bhilai, therefore, considering records of PAN, Assessing Officer of Bhilai (CG) had proceeded to issue notice under Section 148 of the Act of 1961. Hence, it cannot be said that Assessing Officer, Bhilai had acted in illegal manner or contrary to law. He pointed out the procedure prescribed for migration of PAN is available in official website of department, according to which, an assessee is not only required to submit an application before Assessing Officer under whose jurisdiction he/she was residing prior to migration, but also before Assessing Officer within whose jurisdiction assessee is migrated and residing on the date of submission of application for migration of PAN. As per records, petitioner has not submitted any application before Assessing Officer at Indore (MP). Before the Assessing Officer, Bhilai also petitioner submitted application manually and not uploaded the same in website. For any reason, if Assessing Officer has not taken note of petitioner's application for migration of PAN, but petitioner continued to file her income tax returns online giving description in income tax return as Assessing Officer 'Circle-2 (1), Bhilai', as is evident from income tax return acknowledgement placed on record. Petitioner was well aware at the time of submission of filling details in income tax return in 7 the year 2017-18, 2018-19 & 2019-2020 that her application is not considered since 2017 in proper manner or Assessing Officer has committed some error and in official records detail of Assessing Officer is mentioned of 'Assessing Officer, Circle-2, Bhilai'. But even then prior to issuance of notice impugned, petitioner has not taken any step to pursue her application for migration of PAN. On the date of issuance of notice impugned, the jurisdiction of Assessing Officer, Bhilai is mentioned in her PAN details. In these circumstances, it cannot be said that Assessing Officer has committed any jurisdictional error in issuing notice impugned to the petitioner. He further contended that submission of learned counsel for petitioner that there is no proper sanction/approval under Section 151 of the Act of 1961, is also not sustainable. In the 'reasons to believe' recorded b Assessing Officer for initiating proceedings under Section 148 of the Act of 1961, the Assessing Officer has clearly recorded that petitioner was engaged in share trading activities to the tune of Rs.1,81,60,782/- (in WPT No.253/2021) & Rs.17,85,372/- (in WPT No.255/2021) with Banas Finance Limited, a penny stock company listed at Bombay Stock Exchange, but this income was not disclosed by petitioner in her income tax returns for the relevant assessment years, therefore, the Sanctioning Authority after considering the material placed before it by Assessing Officer along with reasons to believe, granted sanction/ approval, which cannot be said to be erroneous or without 8 application of mind. He further contended that manual sanction has been accorded on 12.5.2020 due to some technical glitch, but subsequently copy of online sanction/approval is also placed on record in which date of grant of approval is mentioned as '5.5.2020'. Impugned notice has been issued on 6.5.2020. Thus prior to issuance of impugned notice, proper sanction/approval has been obtained from competent authority. Hence, there is no procedural illegality in issuing impugned notice to petitioner. 5. I have heard learned counsel for the parties and perused the documents placed on record by respective parties. 6. So far as first contention of learned counsel for petitioner that Assessing Officer, Circle-2 (1), Bhilai is not having jurisdiction to issue notice to petitioner is concerned, Section 124 (1) (b) of the Act of 1961 specifically provides that Assessing Officer shall have jurisdiction upon any person residing within the area assigned to him. Indisputably, prior to year 2012 petitioner was residing in Bhilai, District Durg (CG). PAN details of petitioner mention jurisdiction of Assessing Officer, Bhilai, which even till date shows designation of Assessing Officer, Bhilai, Circle 2 (1), Bhilai. After submitting application manually before the Assessing Officer in the year 2017 for migration of PAN from Bhilai (CG) to Indore (MP), she has not pursued the same. Procedure for PAN migration is uploaded in official website, as argued by learned counsel for both sides. Copy of procedure is also placed on record by learned counsel for respondents and 9 perusal of same would show that first step to be taken by an assessee for migration of PAN is filing of an application before current Assessing Officer requesting transfer of PAN. Second step is to file similar application before Assessing Officer of new jurisdictional area. In case at hand, petitioner has not followed the procedure laid down by Department for migration of PAN, which is available in official website of respondents, as she has not made any application to Assessing Officer of new jurisdictional area and only submitted application for migration of PAN with current Assessing Officer. Petitioner thereafter filed her income tax return on more than one occasion i.e. for financial year 2018-19, 2019-2020. In acknowledgement of income-tax returns submitted by petitioner, which are available in record, the designation of Assessing Officer (Ward/Circle) is mentioned to be 'Circle-2 (1), Bhilai'. Income-tax return acknowledgement for the assessment year 2018-19, which was submitted by petitioner on 27.8.2018 i.e. after submission of application for migration of PAN, is also available at Page No.57 of writ petition and in this acknowledgement also designation of Assessing Officer is mentioned as 'Circle-2 (1), Bhilai'. On the date of submission of income-tax return for the assessment year 2018-19, petitioner was well aware that her application for migration of PAN is not processed and considered by Assessing Officer, Bhilai. In the acknowledgement of income-tax return filed for assessment year 2018-19, same address/designation of Assessing Officer is mentioned. Even in the year 2019 petitioner has not pursued her application for migration of PAN 10 from office of Assessing Officer, Circle-2 (1) Bhilai (CG) to Assessing Officer, Indore (MP). Decision of Bombay High Court in case of Harjeet Surajprakash Girotra (supra) relied upon by learned counsel for petitioner is of no help to petitioner being distinguishable on facts. That case deals with service of notice upon assessee when Assessing Officer was having knowledge about change of address, but Assessing Officer proceeded ex-parte without communication to assessee at the address available with banking companies. In such situation, High Court of Bombay set aside impugned notice and consequential order of assessment passed by Assessing Officer. Likewise, in case of Prashant Chandra (supra), the High Court of Allahabad quashed the notice under Section 143 (2) of the Act of 1961 on the ground that Assessing Officer had no jurisdiction to issue it. In that case, petitioner after shifting his place of profession from Lucknow to Delhi, had intimated about change of address, caused requisite amendment in PAN, but ignoring the aforesaid aspects of matter, Assessing Officer had proceeded to issue notice under Section 143 (2) of the Act of 1961. Hence case law relied upon by learned counsel for petitioner will not apply to the facts of present case where petitioner submitted application for migration but PAN details in official record has not been amended accordingly till the date of issuance of notice under Section 148 of the Act of 1961. 7. Coming to next submission of learned counsel for petitioner that 11 there was no proper sanction/approval on the date of issuance of notice under Section 148 of the Act of 1961. Mere mentioning the word 'approved' in the sanction/approval granted under Section 151 of the Act of 1961 in itself would not be sufficient to consider whether the sanction/approval was with proper application of mind or not, because Assessing Officer forwards documents including the reasons recorded by him. Hence, in the opinion of this Court, this issue is to be considered by appropriate authority along with records. 8. In case of Raymond Wollen Mills Ltd. vs. ITO Centre Excise XI, Range Bombay & ors reported in (2008) 14 SCC 218 Hon'ble Supreme Court while considering as to sufficiency of reasons to believe at the stage of issuance of notice under Section 148 of the Act of 1961 has held thus:- “3.In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. 12 The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed. There will be no order as to costs.” 9. As far as reliance placed by learned counsel for petitioner on the judgment rendered in M/s N.C. Cables Ltd. (supra), the same is also of no help to petitioner. In that case after issuance of notice and passing of order of assessment, the assessee had challenged the order of assessment by way of an appeal and the appellate authority after considering merits of reasons to believe assigned by Assessing Officer has held that based on reasons approval granted by authority under Section 151 of the Act of 1961 only by writing the word 'approved' is not proper as it was not sanction by proper application of mind and writ petition of revenue came to be dismissed challenging the orders of appellate authority and Income Tax Appellate Tribunal. 10. For the foregoing, I do not find any tenable ground to interdict with the issuance of notice under Section 148 of the Act of 1961 by respondent Department against petitioner. Writ petitions being sans merit are liable to be and are hereby dismissed. Sd/- (Parth Prateem Sahu) Judge roshan/- "