2008 (1) TMI 894 - AT - Income Tax

Summary

Issues Involved:
1. Reopening of assessment u/s 148.
2. Validity of return filed with an officer lacking jurisdiction.
3. Carry forward of unabsorbed losses.

Summary:

Reopening of Assessment u/s 148:
The assessee challenged the reopening of the assessment and the subsequent reassessment framed by the Assessing Officer (AO). The AO issued a notice u/s 148(1) on the grounds that the assessee failed to file the return in the correct jurisdiction, leading to the belief that income had escaped assessment. The Tribunal found that the reasons recorded by the AO were inadequate to confer jurisdiction for reopening the assessment. It emphasized that for reopening u/s 148(2), there must be material indicating escapement of income, which was absent in this case. The Tribunal held that the issuance of notice u/s 148(1) was improper and without authority of law, thus quashing the assessment framed on its basis.

Validity of Return Filed with an Officer Lacking Jurisdiction:
The assessee filed the return with ACIT, Range-5, Lucknow, who did not have jurisdiction over the assessee. The AO, Central Circle-II, Lucknow, treated the return as non est. The Tribunal upheld the CIT(A)'s decision, which followed the ITAT Agra Bench's ruling in Smt. Meenakshi Devi v. Asstt. CIT, stating that the return filed with an officer lacking jurisdiction is invalid. The Tribunal concluded that the return filed with ACIT, Range-5, could not be acted upon and was rightly treated as non est.

Carry Forward of Unabsorbed Losses:
The assessee argued that the carry forward of unabsorbed losses from earlier years should be allowed. The Tribunal noted that this issue is academic for the current appeal as it would arise in subsequent years if the department refuses to set off such losses. Hence, this ground was rejected. The Tribunal also mentioned that the AO's action to deny the benefit of carry forward losses was not a valid ground for reopening the assessment.

Conclusion:
The Tribunal partly allowed the appeal, quashing the reopening of the assessment and the reassessment framed thereafter, while rejecting the grounds related to the validity of the return filed with an officer lacking jurisdiction and the carry forward of unabsorbed losses.