2023 (7) TMI 614 - AT - Income Tax

Jurisdiction to reassess - assumption of Jurisdiction over Appellant - assessee was employed with the Gurugram Gramin Bank - ITO, Ward 4(5) Gurgaon OR ITO, Ward 33(1), Rewari - ITO, Ward 4(5) Gurgaon has issued notice u/s 148 to the assessee but appellant was being assessed under the jurisdiction of the Salary Circle, ITO, Ward 33(1), Rewari - HELD THAT - We find that the assessee Shri Satya Pal Yadav was an employee of Gurugram Gramin Bank and drawing salary filed his return of income for the assessment year 2010-11 on 22.07.2010 before the ITO, Ward 33 (1), Rewari with PAN identified. Income Tax Officer, Ward 4(1) asserts that the Income Tax Officer, Ward 4(5) Gurgaon had the jurisdiction over the assessee. It was also stated that subsequently the PAN is also transferred to the correct jurisdiction of the Income Tax Officer, Ward 4(1) Gurgaon. The report submitted by the Income Tax Officer, Ward 4(1) is silent no transfer order was passed under section 127 of the Act, if any. The principle that the Assessing Officer alone who was holding the original jurisdiction over the assessee, who could issue notice under section 148 of the Act has been considered by the Hon ble Punjab Haryana High Court in the case of Lt. Col. Paramjeet Singh Vs. CIT 1996 (3) TMI 120 - PUNJAB AND HARYANA HIGH COURT held in the absence of any transfer order no Assessing Officer other than the one who initiated the proceedings or completed the assessment shall have jurisdiction to continue with the proceedings or even to re-open a concluded assessment. We also observe that an identical issue where the Gurgaon Income Tax Officer had remotely and erroneously assumed jurisdiction over the cases of other co-owners and had initiated and concluded re-assessments against them came up for hearing before the Tribunal in the batch of cases and the Tribunal held that the assumption of jurisdiction by the Gurgaon Income Tax Officer was improper incorrect and invalid by order in the case of Attar Singh Others 2019 (8) TMI 767 - ITAT DELHI In the cases before us we find that Shri Satya Pal was employed in Gurugram Gramin Bank was regularly filing returns before the Income Tax Officer, Ward 33(1) Rewari, and was assessed by Income Tax Officer, Ward 33(1) Rewari and Shri Satyabir Singh Yadav was employed with Indian Institute of Air-craft Engineering, New Delhi was regularly filing returns before the Income Tax Officer, Ward 48(3), New Delhi, and Shri Rati Ram, who was employed with Haryana Vidyut Nigam Ltd. was regularly filing returns with Income Tax Officer, Salary Circle Ward 6, Gurgaon and was assessed by Income Tax Officer, Salary Circle Ward 6, Gurgaon. There is nothing on record to suggest that there was a transfer order passed by the Revenue transferring the cases to Income Tax Officer, Ward 3(4) Gurgaon. Therefore, the Income Tax Officer, Ward 4(5) Gurgaon, has no jurisdiction over the assessees. Thus re-assessment order passed under section 143(3) read with section 147 quashed - Decided in favour of assessee.

Summary

Issues Involved:
1. Initiation of proceedings under sections 147/148 of the Income-tax Act, 1961.
2. Jurisdiction of the Assessing Officer.
3. Computation of Long Term Capital Gain.
4. Deductions under sections 54B & 54F of the Income-tax Act, 1961.
5. Charging of interest under sections 234A and 234B of the Income-tax Act, 1961.

Summary:

1. Initiation of Proceedings under Sections 147/148:
The assessees challenged the initiation of proceedings under sections 147/148 of the Income-tax Act, 1961, claiming it was without reasonable cause. The Tribunal admitted additional grounds clarifying that the proceedings were initiated by an AO who did not hold jurisdiction over the assessees, and the prescribed authorities sanctioned the action without due application of mind, contrary to the conditions applicable.

2. Jurisdiction of the Assessing Officer:
The Tribunal found that the respective assessees were regularly filing returns with specific AOs in different jurisdictions (Salary Circle, Rewari for Satya Pal; Ward 48(3), New Delhi for Satyabir Singh Yadav; and Salary Circle Ward 6, Gurgaon for Rati Ram). The notices under section 148 were issued by AOs who did not have jurisdiction over the assessees. There was no transfer order under section 127 of the Act for the transfer of jurisdiction. The Tribunal referred to precedents, including Lt. Col. Paramjit Singh vs. CIT and Dushyant Kr. Jain vs. CIT, which established that only the AO holding original jurisdiction could issue such notices unless the case was transferred by a competent authority.

3. Computation of Long Term Capital Gain:
The assessees contested the computation of Long Term Capital Gain, arguing that it was based on incorrect assumptions of the cost of acquisition and indexation cost without any material evidence. The Tribunal did not delve into the merits of this issue due to the quashing of the reassessment orders based on jurisdictional grounds.

4. Deductions under Sections 54B & 54F:
The assessees' claims for deductions under sections 54B and 54F were not addressed in detail as the reassessment orders were quashed on jurisdictional grounds.

5. Charging of Interest under Sections 234A and 234B:
The issue of charging interest under sections 234A and 234B was rendered moot due to the quashing of the reassessment orders on jurisdictional grounds.

Conclusion:
The Tribunal quashed the reassessment orders for the assessment year 2010-11 due to the lack of jurisdiction by the AOs who issued the notices under section 148. Consequently, the additional grounds were admitted, and the original grounds relating to the initiation and maintenance of proceedings under sections 147/148 were upheld. The Tribunal did not address the merits of the additions made in the reassessment orders as they were academic in nature following the quashing of the orders. The appeals were partly allowed.