2021 (4) TMI 1323 - HC - Income Tax

Reopening of assessment u/s 147 - As argued writ petitioner the impugned notice u/s 148 issued by the first respondent Assistant Commissioner of Income Tax Circle 23(2) Mumbai is without any jurisdiction - HELD THAT - In the case of the petitioner the Assessing Officer is at Chennai. Thus the order initially issued by the first respondent though improper need not be set aside in view of the fact that the said proceedings were subsequently transferred to the Income Tax Authorities at Chennai. The first respondent has not adjudicated the issues nor conducted any enquiry. First respondent conducted certain investigation and identified the immovable properties belong to the petitioner situate at Mumbai. All the files are now transferred to the authority at Chennai who in turn issued notices on 14.12.2018 directing the petitioner to file the return of income for the assessment year 2011-12 in response to the notice issued under Section 148 of the IT Act dated 28.03.2018. Though the second respondent has commenced the proceedings by issuing letters dated 14.12.2018 the petitioner is no way prejudiced and she has to avail an opportunity by submitting her objections and by following the procedures contemplated under the IT Act. The entire proceedings initiated by the first respondent has already been transferred to the authority at Chennai no prejudice is caused to the petitioner and she is at liberty to defend her case in the manner known to law and by filing objections and an opportunity be provided to the petitioner as prescribed. WP dismissed.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for reopening assessment due to jurisdictional concerns.

Analysis:
The petitioner challenged the notice issued under Section 148 of the IT Act, contending that it was without jurisdiction as the petitioner is assessed in Chennai, not Mumbai. The petitioner communicated this to the first respondent, requesting to drop the proposal for assessment. However, the second respondent from Chennai issued notices directing the petitioner to file a return of income for the assessment year 2011-12 in response to the notice under Section 148. The respondents argued that the original order reopening the assessment was based on investigation regarding the petitioner's property in Mumbai, which was later transferred to Chennai for further proceedings. They maintained that there was no irregularity, and the petitioner needed to submit objections as per the IT Act.

The court considered Sections 147 and 148 of the IT Act, emphasizing that initiation must be done by the Assessing Officer, who in this case is in Chennai. Although the order by the first respondent was improper, it was not set aside as the proceedings were transferred to Chennai. The first respondent had not adjudicated the issues but had conducted investigations leading to the transfer of files to Chennai. The second respondent initiated proceedings by issuing notices, and the petitioner was required to file a return for the specified assessment year. The court noted that the petitioner was not prejudiced and had the opportunity to defend her case by submitting objections and following the procedures under the IT Act.

Given that the proceedings initiated by the first respondent were transferred to Chennai, the court found no prejudice to the petitioner. The petitioner was granted the liberty to defend her case as per the law, file objections, and avail the prescribed opportunity. Consequently, the writ petition was dismissed, and no costs were imposed, with connected miscellaneous petitions closed as well.