2018 (5) TMI 332 - AT - Income Tax

Reopening of assessment - Held that - CIT (A) has quashed the assessment order passed by the Assessing Officer on account of assumption of jurisdiction without issue of notice u/s. 143 (2). Therefore the assessee should not have any grievance. Since the Ld. CIT (A) has directed the Assessing Officer to reframe the assessment order after adhering to the correct prescribed procedure in terms of provisions u/s 150 therefore find no infirmity in the same. The order of the Ld. CIT (A) is accordingly upheld and the grounds raised by the assessee are dismissed.

Summary

Issues:
1. Validity of the direction given by the Deputy Commissioner of Income Tax to take action under section 150.
2. Legality of the direction adverse to the assessee given by the Assessing Officer.
3. Assessment order validity due to lack of jurisdiction under section 143(2) of the IT Act.

Analysis:
1. The appeal was against the CIT (A)'s order related to the assessment year 2009-10. The Assessing Officer initiated action under section 147 as the assessee had sold property without disclosing capital gains. The AO issued a notice under section 148, and the assessee claimed the original return filed sufficed as a response. The ITAT upheld the CIT (A)'s decision to quash the assessment order due to the absence of jurisdiction under section 143(2). The direction to reframe the assessment order under section 150 was deemed appropriate.

2. The Assessing Officer had raised queries regarding capital gains on property sale, to which the assessee clarified discrepancies in the amount of sale. Despite the explanation, the AO determined additional income invoking section 50C of the IT Act. The CIT (A) found the assessment order faulty due to the absence of jurisdiction under section 143(2), leading to directions for reassessment following the correct procedure. The ITAT upheld this decision, dismissing the grounds raised by the assessee.

3. Despite being absent during the hearing, the assessee's appeal was dismissed by the ITAT. The tribunal concurred with the CIT (A)'s decision to quash the assessment order and direct reassessment in compliance with the prescribed procedure under section 150 of the IT Act. The ITAT found no fault in the CIT (A)'s order, ultimately upholding it and dismissing the appeal filed by the assessee.

In conclusion, the ITAT upheld the CIT (A)'s decision to quash the assessment order due to jurisdictional issues and directed the Assessing Officer to reframe the order following the correct procedure under section 150. The appeal filed by the assessee was dismissed by the tribunal.