2019 (6) TMI 799 - HC - Income Tax

Reopening of assessment u/s 147 - reasons recorded by DCIT whereas notice issued by ITO - Notice issued by an officer other than the officer who recorded the reasons for reopening - curable defect u/s 292B - HELD THAT - It was not possible for the jurisdictional AO viz. the Dy. CIT to issue the notice u/s 148 on or before 31. 3. 2018 as migration of the Permanent Account Number was not possible within that short period. Therefore, the Income tax officer has issued notice u/s 148 instead of the jurisdictional Assessing Officer. Thus there is an admission on part of the first respondent that the Dy. CIT, Circle 2, Jamnagar who had jurisdiction over the petitioner had not issued notice u/s 148 but it is the Income tax officer, Ward 2(2), Jamnagar, who did not have any jurisdiction over the petitioner, in respect of the present case, who had issued such notice. As held in case of Hynoup Food Oil Industries Ltd. 2008 (7) TMI 192 - GUJARAT HIGH COURT it is the officer who records the reasons who has to issue the notice u/s 148(1) whereas in the present case the reasons have been recorded by the jurisdictional AO, whereas the notice u/s 148(1) has been issued by an officer who did not have jurisdiction over the petitioner. Since the notice u/s 148 is a jurisdictional notice, any inherent defect therein cannot be cured u/s 292B. In the facts of the present case, while the reasons for reopening the assessment have been recorded by the jurisdictional Assessing Officer viz. the Dy. CIT, Circle 2, Jamnagar, the impugned notice u/s 148(1) has been issued by the Income Tax Officer, Ward 2(2), Jamnagar who had no jurisdiction over the petitioner, and hence, such notice was bad on the count of having been issued by an officer who had not authority in law to issue such notice. As a necessary corollary it follows that no proceedings could have been taken u/s 147 in pursuance of such invalid notice. In the aforesaid premises, the impugned notice u/s 148(1) as well as all the proceedings taken pursuant thereto cannot be sustained. - Decided in favour of assessee.

2008 (7) TMI 192 - HC

Issues Involved:
1. Jurisdiction of the officer issuing the notice under Section 148 of the Income Tax Act, 1961.
2. Validity of the notice issued under Section 148 of the Act.
3. Procedural lapses and applicability of Section 292B of the Act.
4. Participation of the petitioner in the reassessment proceedings.
5. Objections raised by the petitioner regarding jurisdiction.

Issue-Wise Detailed Analysis:

1. Jurisdiction of the officer issuing the notice under Section 148 of the Income Tax Act, 1961:
The petitioner challenged the notice dated 29.03.2018 issued by the Income Tax Officer, Ward 2(2), Jamnagar, under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for the assessment year 2011-2012. The petitioner contended that the notice was issued by an officer other than the one who recorded the reasons for reopening the assessment, thus making the notice jurisdictionally invalid. The court noted that the reasons for reopening were recorded by the Deputy Commissioner of Income Tax (DCIT), Circle 2, Jamnagar, while the notice was issued by the Income Tax Officer, Ward 2(2), Jamnagar, who did not have jurisdiction over the petitioner.

2. Validity of the notice issued under Section 148 of the Act:
The court referred to Section 148 of the Act, which mandates that the Assessing Officer must record his reasons for issuing a notice under this section. The court relied on the precedent set in the case of Hynoup Food & Oil Industries Ltd. v. Assistant Commissioner of Income Tax, which held that the officer recording the reasons and the officer issuing the notice must be the same person. Since the notice in the present case was issued by an officer who did not record the reasons, the court found the notice to be invalid and without jurisdiction.

3. Procedural lapses and applicability of Section 292B of the Act:
The respondents argued that the issuance of the notice by the Income Tax Officer was a procedural lapse due to the e-assessment scheme and the non-migration of the Permanent Account Number (PAN) in time. They contended that such a procedural defect would be covered under Section 292B of the Act, which allows for the rectification of procedural errors. However, the court held that since the notice under Section 148 is a jurisdictional notice, any inherent defect therein cannot be cured under Section 292B of the Act.

4. Participation of the petitioner in the reassessment proceedings:
The respondents argued that the petitioner had participated in the reassessment proceedings and had only belatedly raised objections regarding the jurisdiction of the officer issuing the notice. They contended that the petitioner should be relegated to the remedy of appeal under the relevant statutory provisions. However, the court entertained the petition given the peculiar facts of the case, where the very jurisdiction of the Assessing Officer was under challenge.

5. Objections raised by the petitioner regarding jurisdiction:
The petitioner had raised objections during the assessment proceedings regarding the jurisdiction of the officer issuing the notice. The Assessing Officer, however, proceeded with the reassessment without addressing these objections adequately. The court found that the Assessing Officer did not understand the petitioner's contention regarding the jurisdictional issue.

Conclusion:
The court allowed the petition, quashing the notice dated 29.03.2018 issued under Section 148 of the Income Tax Act, 1961, and all proceedings pursuant thereto, including the assessment order dated 28.12.2018. The court made the rule absolute with no order as to costs.

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