2012 (6) TMI 109 - AT - Income Tax

Power of Jt. CIT to issue notice u/s. 148 and also recording the reason(s) for the same assessee contested that Jt. CIT is not its Assessing Officer competent to record the reason/s and issue notice u/s. 148 Revenue contested the Jt. CIT, Sri Ganganagar has jurisdiction over the assessee by virtue of Notification No.1 of 2001-02 issued by the CIT, Bikaner - Held that - Only a Jt. CIT where authorized u/s. 120(4)(b) by the Chief Commissioner or Commissioner, would qualify to be a AO in respect of the person specified in the said authorization whereas the Revenue has not brought on record any order/ direction/ notification u/s. 120(4)(b) - the Notification No. 1/2001-02 issued by the CIT, Bikaner convey a general order passed in exercise of the powers u/ss. 120(1) and 120 (2) to perform functions in respect of the persons residing or having their principal place of business, registered office located within the district of Sri Ganganagar and the same does not confer on him the powers and functions of an AO, which could only be by an order passed by the Chief Commissioner in pursuance of the powers conferred on the said authority by the Board u/s. 120(4)(b) the Revenue s claim of Jt. CIT holding concurrent jurisdiction with the ITO, Ward 1, Sri Ganganagar is, therefore, without substance as no scope for application of s. 292B of the Act - in favour of assessee.

Summary

Issues involved:
1. Jurisdiction of the Joint Commissioner of Income Tax (Jt. CIT) to issue notice under Section 148 of the Income Tax Act, 1961.
2. Validity of the assessment framed under Section 143(3) read with Section 147 of the Income Tax Act, 1961.

Issue-wise detailed analysis:

1. Jurisdiction of the Joint Commissioner of Income Tax (Jt. CIT) to issue notice under Section 148 of the Income Tax Act, 1961:

The primary issue was whether the Jt. CIT, Sri Ganganagar, had the authority to issue a notice under Section 148 of the Income Tax Act, 1961. The assessee argued that the Jt. CIT was not their Assessing Officer (AO) and thus was not competent to record reasons and issue the notice under Section 148. The Revenue contended that under Section 2(7A) of the Act, the Jt. CIT could exercise the powers of an AO if so authorized by the Board.

The Tribunal examined the relevant provisions, including Sections 2(7A), 120, and 124 of the Act. It noted that the Jt. CIT could only be considered an AO if specifically authorized under Section 120(4)(b) by the Chief Commissioner or Commissioner. The Tribunal found that the Revenue had not provided any order or notification under Section 120(4)(b) authorizing the Jt. CIT to act as an AO. The Notification No. 1 of 2001-02 dated 01-08-2001 by the Commissioner, which was cited by the Revenue, was only a general order under Sections 120(1) and 120(2) and did not confer the specific powers of an AO on the Jt. CIT.

The Tribunal concluded that there was an inherent lack of jurisdiction with the Jt. CIT, Sri Ganganagar, to issue the notice under Section 148 or to record the reasons under Section 148(2). Consequently, the notice issued by the Jt. CIT was deemed invalid.

2. Validity of the assessment framed under Section 143(3) read with Section 147 of the Income Tax Act, 1961:

Given the Tribunal's finding on the first issue, the assessment framed under Section 143(3) read with Section 147, based on the notice issued by the Jt. CIT, was also deemed invalid. The Tribunal held that the assessment was without jurisdiction and thus liable to be cancelled.

Conclusion:

The Tribunal allowed the Cross Objection by the assessee, concluding that the Jt. CIT, Sri Ganganagar, lacked the jurisdiction to issue the notice under Section 148, rendering the subsequent assessment invalid. The assessment was accordingly cancelled.