2022 (5) TMI 629 - HC - Income Tax

Reopening of assessment u/s 147 - preliminary objection of the Petitioner that there was no valid jurisdiction with Respondent No.1 (located at Jaipur) for issuance of notice or proposed initiation of reassessment proceedings - Petitioner further states that Respondent No.1 has issued the impugned notice under Section 148 of the Act initiating reassessment proceedings in case of the erstwhile non-existing entity - HELD THAT - Having perused the letter dated 9th May, 2022 written by the Income Tax Officer, Ward 6(2), Jaipur, this Court is of the view that the said Income Tax Officer had no jurisdiction to issue notice dated 14th March, 2022 to propose initiation of reassessment proceedings, as the petitioner s jurisdictional Assessing Officer is based in Delhi, Circle 10(1). Consequently, as the impugned notice under Section 148A(b) as well as the impugned order under Section 148A(d) have been issued by a non-jurisdictional Assessing Officer, the same are quashed. If the law permits the respondents/revenue to take further steps in the matter, they shall be at liberty to do so. Needless to state that if and when such steps are taken and if the petitioner has a grievance, it shall be at liberty to take its remedies in accordance with law.

Summary

Issues:
Challenge to order under Section 148A(d) of the Income Tax Act, 1961 and initiation of reassessment proceedings under Section 147 for the assessment year 2018-19 based on jurisdictional grounds and factual inaccuracies.

Analysis:
The petitioner challenged the order dated 31st March, 2022, passed by Respondent No.1 under Section 148A(d) of the Income Tax Act, 1961, and the subsequent initiation of reassessment proceedings under Section 147 for the assessment year 2018-19. The petitioner contended that Respondent No.1 lacked valid jurisdiction for issuing the notice and initiating reassessment proceedings, as the jurisdiction over the petitioner lies with Respondent No.3 at New Delhi, not with Respondent No.1 located in Jaipur. The petitioner supported this argument by referring to a notice issued by Circle 10(1), Delhi. Additionally, it was highlighted that the impugned notice was issued for an erstwhile non-existing entity without the approval of Respondent No.2, raising jurisdictional concerns.

The petitioner further argued that the impugned notice was factually incorrect, as it alleged the petitioner had purchased an immovable property at Barmer, whereas the petitioner had actually leased the property for installing a tower to provide passive infrastructure telecom services. The respondents accepted notice of the issues raised by the petitioner.

During the proceedings, the respondents presented a letter dated 9th May, 2022, from the Income Tax Officer, Ward 6(2), Jaipur, explaining the circumstances under which the notice and order were issued. The letter detailed that due to the absence of PAN and jurisdictional issues, the notice was initially issued by the Jaipur office but was later transferred to the jurisdictional Assessing Officer in Delhi. The Court, after reviewing the letter, concluded that the Income Tax Officer in Jaipur did not have jurisdiction to issue the notice proposing reassessment proceedings. Therefore, the impugned notice and order issued by a non-jurisdictional officer were quashed. The Court allowed the revenue to take further steps if permitted by law, with the petitioner retaining the right to seek remedies if necessary.

In summary, the High Court's judgment focused on the jurisdictional issues regarding the initiation of reassessment proceedings under Section 147 for the assessment year 2018-19. The Court found that the notice and order were issued by an officer lacking jurisdiction over the petitioner, leading to the quashing of the impugned notice and order. The judgment emphasized the importance of jurisdictional correctness in such proceedings and allowed the revenue to proceed lawfully while ensuring the petitioner's right to seek legal remedies if needed.