VIJAY KUMAR JAIN,BAPU NAGAR, JAIPUR V. DCIT, CENTRAL CIRCLE-2, JAIPUR

ITA 407/JPR/2025

AI Insights

The case involves Shri Vijay Kumar Jain, the appellant, who contested the validity of a notice issued under section 148 of the Income Tax Act, 1961, by ITO, Ward-6(3), Jaipur, for reassessment of his income for the assessment year 2011-12. The notice was based on alleged long-term capital gains (LTCG) from the sale of various properties, which were not reported in his original income tax return. The Assessing Officer added these incomes and reassessed the total income. The appellant's appeal to the CIT(A) resulted in partial relief, with some additions being deleted. However, the main issue of the validity of the notice and the jurisdiction of the assessing officer remained contested. The Tribunal's decision focused on the procedural validity of the notice under section 148, emphasizing that it must be issued by the jurisdictional Assessing Officer, which was not the case here.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315677 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Other Referred Cases: Abhishek Jain v. Income-tax officer, Ward-55(1), New Delhi, Lt. Col. Paramjeet Singh Vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL PARIHAR
• Assessee Lawyers: S.L. PODDAR
• Keywords: Set aside; Reassessment proceedings; Period of limitation; Assessment record; Competent authority; Reason to believe; Non compliance
• Section: 147; 148; 144; 142(1); 132; 153A

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B-Bench” JAIPUR Jh xxu xks;y] ys[kk lnL; ,o aJh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 407/JPR/2025 fu/kZkj.ko\"kZ@Assessment Year : 2011-12 Shri Vijay Kumar Jain 501-503, Pearl Excellency, Babu Nagar, Jaipur. cuke Vs. The DCIT, Central Circle-2, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADHPJ0798G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : Shri S.L. Poddar, Adv. jktLo dh vksjls@Revenue by: Mrs. Swapnil Parihar, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 13/05/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 14/05/2025 vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER . Assessee is before this Appellate Tribunal. He is feeling dissatisfied with the order dated 24.02.2025 whereby an appeal filed by the assessee against assessment order dated 08.12.2018, passed u/s 147 r.w.s. 143(3)/147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) has been partly allowed. 2 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. 2. Vide assessment order dated 08.12.2018, the Assessing Officer- DCIT, Central Circle-2, Jaipur computed total income of the assessee, relating to the assessment year 2011-12 as under:- Income assessee u/s 153A dated 29.02.2016 Rs. 7,10,460 Add: As per para 2.1, supra Rs. 5,62,296 Add: as per para 2.2, supra Rs. 1,33,08,800 Add: as per para 2.3, supra Rs. 22,30,536 Total Income Rs. 1,68,12,092 R/o Rs. 1,68,12,090 3. Vide reasons recorded in para 2.1, the Assessing Officer made first mentioned addition of Rs. 5,62,296/- keeping in view LTCG due to sale of plot No. 93 prime Estate Yojna, Sanganer; for the reasons recorded in para 2.2, the Assessing Officer made second mentioned addition of Rs. 1,33,08,800/-, on account of LTCG due to sale of Flat No. 401 & 402, S-52, Arvind Marg, C-scheme, Jaipur; and the 3rd addition of Rs. 22,30,536/-, on account of LTCG due to sale of office/Showroom at commercial complex, Chomu House, Sardar Patel Marg, Jaipur. 4. When the assessee filed appeal before Learned CIT(A), NFAC, he upheld the first mentioned addition of Rs. 5,62,296/-but deleted the second mentioned addition of Rs. 1,33,08,800/- and also the third mentioned addition of Rs. 22,30,536/-. 5. That is how, the assessee is before this Appellate Tribunal. 3 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. 6. The only contention raised by Ld. AR for the appellant before us is that this is a case where notice dated 29.03.2018 issued u/s 148 of the Act, by ITO, Ward-6(3), Jaipur can safely be said to be bad in law, being without jurisdiction. 7. As is available from the assessment order, the assessee filed return of income u/s 139(1) of the Act on 07.09.2011 declaring his income of Rs. 7,10,460/-. In response to the notice u/s 153A of the Act issued on 29.02.2016, same income was declared by the assessee. 8. Case of the department is that there was information available that the assessee had sold various immovable properties for total sale consideration of Rs. 1,77,97,000/-, which were valued by the Sub-Registrar at Rs. 2,02,34,218/-, for the purpose of stamp duty, and further that the assessee had not shown capital with respect to said properties, in the return of income filed u/s 139(1) of the Act, and that there were reasons to believe that income of Rs. 2,02,34,218/-, chargeable to tax, had escaped assessment as per provisions of Section 147 of the Act. Further, it is a case of the department that in the above situation, proceedings u/s 147 of the Act were initiated and notice u/s 148 of the Act was issued to the assessee on 29.03.2018, by ITO, Ward-6(3), Jaipur after recording reasons and obtaining approval of the competent authorities. 4 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. 9. Admittedly, subsequent thereto, as per letter dated 29.06.2018, the assessment record of said case was transferred from the office of ITO, Ward-6(3), Jaipur to the office of Central Circle-2, Jaipur. Case of the department is that case was so transferred as Central Circle-2, Jaipur had jurisdiction over the assessee. 10. Admittedly, ITO, Central Circle-2, Jaipur, on receipt of the record, found that in response to the above said notice u/s 148 of the Act, the assessee had not filed his return of income, and as such, the assessee was served with notice on 30.08.2018, u/s 142(1) of the Act. 11. Admittedly, in response to the above said notice u/s 142(1) of the Act , the assessee submitted his response dated 10.09.2018 alleging therein that he had not received any notice dated 29.03.2018, u/s 148 of the Act. Accordingly, the assessee requested for supply of copy of said notice dated 29.03.2018 with proof of its dispatch by Speed Post. Department admits that vide letter dated 20.09.2018, copy of the above said notice dated 29.03.2018, u/s 148 of the Act, was supplied to the assessee by Speed Post, specifying therein that said notice u/s 148 dated 29.03.2018 was sent by Speed Post No. ER020088559IN and duly served upon him on 31.03.2018. 5 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. 12. It is case of the department that another notice dated 11.10.2018 was issued by the department to the assessee in view of the fact that he did not file any return in response to the notice. Thereupon, the assessee put forth his reply dated 22.10.2018 to letter dated 11.10.2018. Said response revealed that the assessee requested for dropping of the proceedings, for want of a valid notice u/s 148 of the Act by DCIT, Central Circle-2, Jaipur, even though the previous notice dated 29.03.2018 was admitted to have been issued by ITO, Ward-6(3), Jaipur. The assessee also pleaded therein that any subsequent notice issued by DCIT, Central Circle-2, Jaipur was beyond the period of limitation, in terms of section 149(1)(b) of the Act. Further, it was pleaded that the subsequent notice issued by DCIT disclosed no reasons to believe, and as such, the same was bad in law even on this ground. Ld. AR for the appellant has contended for re-assessment, that reasons to believe must be of the jurisdictional Assessing Officer, and not of any other Assessing Officer, and that in the given situation, the only impugned order as regards the addition upheld, deserves to be set aside. 13. On behalf of the department, reliance has been placed on letter dated 30.10.2018 submitted by the department to the assessee, and the 6 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. observations made by the authorities below, in support of validity of notice u/s 148 of the Act. 14. On account of non compliance by the assessee to the above said letter dated 30.10.2018, show cause notice dated 17.11.2018 was issued to the assessee. Admittedly, the assessee replied said show cause notice dated 17.11.2018. 15. As regards the above said objection raised by the assessee before the Assessing Officer regarding jurisdiction, for want of valid notice u/s 148 of the Act, the Assessing Officer observed in the manner as under:- “The reply furnished by the assessee has been considered and not found tenable due to following fact: (A). Assessee's plea that no notice u/s 148 of the I.T. Act was issued by the office of undersigned within the time limit as mentioned in section 149 of the Act rather it was issued by the authority (i.e. ITO ward 6(3), Jaipur) who has no assessment jurisdiction over the assessee is baseless at this stage. It is worthwhile to mention here that assessee did not file any return of income in response to notice u/s 148 of the Act, hence the provisions of section 124(3) of the I.T. Act, 1961 are applicable in this case. The section 124(3) reads as under: (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer- (a) where he has made a return\" [under sub-section (1) of section 115WD or] under sub-section (1) of section 139, after the expiry of one month from the date on on which he was served with a notice under sub-section (1) of section 142 or [sub-section (2) of section 115WE or] sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier; 7 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. (b) where he has made no such return, after the expiry of the time allowed by the notice under [sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144] to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier; [(c) where an action has been taken under section 132 or section 1324, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier.] On simple reading of the above provisions of section 124(3)(b) of the Act, it is clear that assessee was entitled to call in question the jurisdiction of the AO only within the time allowed via first notice issued (i.e. 148/142(1)/show cause) whichever is earlier. In assessee's case the first notice issued was u/s 148 on 29.03.2018 wherein time allowed was 30 days but no jurisdictional objection was filed by the assessee till specified time allowed above. The assessee filed the objection over the jurisdiction vide letter dated 17.11.2018 (i.e. around six and half months after). Hence, assessee plea don't have any relevance at this stage. (B). From the above, it is clear that the assessee has been provided sufficient opportunity to comply either via email or postal correspondence. The assessee neither filed any return of income nor produced any substantive material to contradict the information available on record. The assessee has been given sufficient opportunity to explain the same but no explanation has been provided to this office. Further, no return of income has been filed till date. In view of the above circumstances, the undersigned has no option but to make the assessment to the best of judgment u/s 144 of the IT Act after taking into account of all the information and material gathered and available on record which is as under:” 8 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. 16. When the same question was raised by the assessee before Learned CIT(A), he dealt with the same by observing as under:- “4.10 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order. The contentions/submissions of the appellant are being discussed and decided as under:- The issue raised by the appellant in this ground of appeal has been discussed and adjudicated in the adjudication of additional ground no. 1 of the appeal wherein the ground of appeal has been dismissed. Even with respect to notice u/s 148 of the Act, it is held by the Hon'ble Delhi High Court in the case of Abhishek Jain v. Income-tax officer, Ward-55(1), New Delhi [2018] 94 taxmann.com 355 (Delhi)/[2018] 405 ITR 1 (Delhi) [01-06-2018] that in terms of section 124(3)(b) jurisdiction of an Assessing Officer cannot be called in question by an assessee after expiry of one month from date on which he was served with a notice for reopening assessment under section 148. Hence the present ground of appeal also stands dismissed.” 17. Section 148 of the Act provides that before making assessment, reassessment or re-computation, the Assessing Officer is required to issue notice u/s 147 of the Act, directing the assessee to furnish a return of his income within the period specified in the notice. It is well settled that the said notice is to be issued by the Assessing Officer who holds the original jurisdiction over the assessee. In this regard, reference may be made to decision in case of Lt. Col. Paramjeet Singh Vs. CIT (1996) 220 ITR 446, by Hon’ble Punjab & Haryana High Court, wherein it was held as under:- 9 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. “4. We have heard the counsel for the parties and in the normal course we would have accepted the preliminary objection raised by the department and directed the petitioner to raise all the pleas before the ITO but keeping in view the fact that the present is a case where there is total lack of jurisdiction in respondent No2, we are interfering in the matter. There is no gainsaying the fact that the petitioner was posted at Pune when he was in the service of the Army and for the assessment year in question he filed his return of income with the ITO there and the same stands assessed. The proceedings had been completed and the tax found payable had been deposited/ accounted for. Thereafter, if the assessment proceedings are to be re-opened or if the income for the relevant assessment year is to be reassessed it is the ITO who assessed the same in the first instance alone has the jurisdiction to proceed in the matter under section 147 read with section 148 unless the case has been transferred by a competent authority to another Assessing Officer under section 127 of the Act and in that event the latter will have jurisdiction to proceed. It is clear that in the absence of any transfer order no Assessing Officer other than the one who initiated the proceedings or completed the assessment shall have jurisdiction to continue with the proceedings or even to re-open a concluded assessment.\"” 18. Herein, as noticed above, admittedly, notice u/s 148 of the Act came to be issued to the assessee 29.03.2018, by ITO, Ward-6(3), Jaipur, who was not the jurisdictional Assessing Officer. Therefore, said notice u/s 148 of the Act issued by ITO, Ward6(3), Jaipur cannot be said to be a valid notice. 19. The case was transferred from ITO, Ward6(3), Jaipur to Central Circle2, Jaipur, vide letter dated 29.06.2018. It is not in dispute that the jurisdictional Assessing Officer i.e. ITO, Central Circle-2, Jaipur never issued any notice u/s 148 of the Act to the assessee, what to say of 10 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. recording of any “reason to believe” that this was a case of escapement of income chargeable to tax or communication thereof to the assessee within the prescribed period of limitation. 20. Before the jurisdictional Assessing Officer, the assessee, at the very outset, raised objection as regards the validity of the notice u/s 148 of the Act on the ground that jurisdictional Assessing Officer had not issued the same. The jurisdictional Assessing Officer vide letter dated 20.09.2018 simply sent to the assessee, on his request, copy of the previous notice u/s 148 of the Act issued on 29.03.2018. It is not case of the department that the jurisdictional Assessing Officer ever issued fresh notice u/s 148 of the Act to the assessee, and that too within the prescribed period of 6 years from the end of the relevant assessment year. Conclusion 21. In view of the above discussion, we find merit in the contention raised by Ld. AR for the appellant that the notice u/s 148 of the Act issued on 29.03.2018 was invalid in the eyes of law, the same having not been issued by the jurisdictional Assessing Officer and “reasons to believe” have never been recorded by the jurisdictional Assessing Officer. Consequently, the entire reassessment proceedings deserved to be set aside. 11 ITA No. 407/JPR/2025 Sh. Vijay Kumar Jain, Jaipur. Result 22. In view of the above findings, this appeal is allowed and the impugned order passed by Learned CIT(A) upholding the only addition, is hereby set aside. File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 14/05/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 14/05/2025 *Santosh vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Sh. Vijay Kumar Jain, Jaipur. 2. izR;FkhZ@ The Respondent- DCIT, Central Circle-2, Jaipur. 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File ITA No. 407/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar "