2010 (1) TMI 669 - AT - Income Tax

Reopening Assessment u/s 148 - Whether reopening of assessment under section 148 read with section 147 is bad in law being without jurisdiction and so the reassessment order is liable to be quashed - Held that - as per the case of Ranjeet Singh v. Asstt. CIT 2008 -TMI - 65397 - ITAT DELHI-F wherein the Tribunal held that notice under section 148 issued by the ITO at Ghaziabad to the assessee who was assessed to tax in Delhi was without jurisdiction and therefore assessment framed on the basis of said notice is bad in law; impugned notice was not in substance and effect in conformity with the provisions of section 120 read with section 147 and thus the provisions of section 292B are not applicable - Consequently the order of the learned CIT(A) is set aside on the legal issue raised by the assessee in her appeal - Appeal filed by the assessee is allowed .

Issues:
1. Reopening of assessment under section 148 read with section 147 being without jurisdiction.
2. Validity of reassessment for want of valid service of notice under section 143(2).
3. Merit relating to an addition of Rs. 5 lakhs made by the Assessing Officer.

Issue 1: Reopening of assessment under section 148 read with section 147 being without jurisdiction

The appeal was filed against the order of the CIT(A) for the assessment year 2001-02 on five grounds. Ground No. 2 questioned the legality of reopening the assessment under section 148 read with section 147. The Assessing Officer issued a notice under section 148 based on information received regarding a receipt of Rs. 5 lakhs. The assessee argued that the notice was without jurisdiction as she had already filed her IT return for the relevant year with a different assessing officer. The assessee contended that the reassessment order was invalid as it was framed without recording any reasons and without issuing a fresh notice under section 148. The representative cited relevant case laws to support the argument that the reassessment was without jurisdiction. The Tribunal held that the notice issued was indeed without jurisdiction, and consequently, the reassessment framed by the Assessing Officer was declared invalid and quashed.

Issue 2: Validity of reassessment for want of valid service of notice under section 143(2)

The assessee also raised a legal issue regarding the validity of reassessment due to the lack of valid service of notice under section 143(2). The Assessing Officer issued a notice under section 143(2) without recording reasons and without issuing a fresh notice under section 148. The assessee argued that this lack of valid service of notice rendered the reassessment order illegal. The Tribunal, after considering the arguments and relevant case laws presented by the assessee, concluded that the notice issued under section 148 was without jurisdiction. Consequently, the reassessment framed by the Assessing Officer was deemed invalid and quashed.

Issue 3: Merit relating to an addition of Rs. 5 lakhs made by the Assessing Officer

One of the grounds of appeal related to an addition of Rs. 5 lakhs made by the Assessing Officer on account of a gift received by the assessee. However, due to the Tribunal's decision on the jurisdictional issues regarding the reopening of assessment and the validity of reassessment notices, it was not necessary to delve into the merit of this addition. The Tribunal held that since the legal issues were decided in favor of the assessee, the other grounds of appeal were considered academic and were not further addressed.

In conclusion, the Tribunal allowed the appeal filed by the assessee based on the jurisdictional issues surrounding the reopening of assessment and the validity of reassessment notices, ultimately leading to the quashing of the reassessment order by the Assessing Officer.

← Previous Next →