2022 (4) TMI 488 - AT - Income Tax

Reopening of assessment u/s 147 - jurisdiction of the AO ITO, Ward-36(4) to frame the reassessment order - HELD THAT - As per the restructuring there was change in jurisdiction and it is noted that the assessee s assessment has to be done by ITO, Wd-36(4) of Kolkata. Even after transfer of jurisdiction from ITO, Ward-40(4) to ITO, Ward- 36(4), Kolkata, it is noticed that the reopening notice u/s 148 was issued on 27.03.2019 by ITO, Wd-45(4) who did not enjoy the jurisdiction even during the period of pre-circular dated 13.11.2014; and thereafter realizing the mistake ITO has transferred the case to the ITO, Wd-36(4) who thereafter framed the reassessment. It is clear from the perusal of the assessment order as well as from the records that ITO, Wd-36(4) has not issued any notice u/s. 148 whereas notice has been issued by ITO, Ward-45(4) dated 27.03.2019. In this admitted facts and having noticed that the ITO, Wd-36(4) had not issued notice u/s. 148 of the Act before framing the reassessment order we are inclined to allow the appeal of the assessee. Impugned notice of the ITO, Wd-45(4) u/s. 148 who did not had jurisdiction at all is quashed and, therefore, all the consequential action is null in the eyes of law.

Summary

Issues:
Jurisdiction of Assessing Officer to frame reassessment order without issuing notice u/s. 148 of the Income-tax Act, 1961.

Analysis:

Legal Issue Raised by Assessee:
The appeal challenged the jurisdiction of the Assessing Officer (AO) to frame a reassessment order without issuing a notice u/s. 148 of the Act. The Assessee's representative argued that despite a change in jurisdiction due to CBDT directions, the reopening notice was issued by an AO who did not have the requisite jurisdiction. The AO who framed the reassessment order had not issued the notice, rendering the action without jurisdiction and null in the eyes of the law. The Assessee relied on legal precedents such as Smt. Smriti Kedia case and West Bengal State Electricity Board case to support the argument.

Revenue's Counter-Argument:
The Revenue contended that the crucial factor was whether the Assessee had a proper opportunity to present before the AO. The Revenue argued that since the Assessee participated before the correct AO, and the AO considered the contentions and records before framing the reassessment order, the absence of a notice u/s. 148 should not invalidate the action.

Tribunal's Decision:
After considering the submissions and the case details, the Tribunal found that the reassessment order was framed without the issuance of a notice u/s. 148 by the correct AO. Despite the jurisdictional change, the reopening notice was issued by an AO who did not have jurisdiction, leading to subsequent transfer to the correct AO. The Tribunal relied on legal precedents and decided in favor of the Assessee, quashing the notice issued by the incorrect AO and declaring all consequential actions null in the eyes of the law. The Tribunal's decision was based on the principles established in the Smt. Smriti Kedia case and the West Bengal State Electricity Board case.

Conclusion:
The Tribunal allowed the appeal of the Assessee, emphasizing the importance of adherence to jurisdictional requirements and legal procedures in framing reassessment orders. The decision was pronounced in open court on 31st March 2022.