2017 (10) TMI 1670 - HC - Income Tax

Reassessment order passed u/s 148 by the non-jurisdictional officer - Assessment made by ACIT Circle 34(1) was without jurisdiction - matter was transferred to the said ACIT by the Income Tax Officer ( ITO ) Ward 34 (4) without an appropriate order u/s 127 - HELD THAT - ITAT has in the impugned order specifically adverted to the above aspect and correctly held that The ACIT Circle 34(1) New Delhi has admittedly not recorded that he had reasons to believe that income chargeable to tax of the Assessee has escaped assessment. He continued reassessment proceedings initiated by the ITO Ward 34(4) of the Act without independently recording reasons for reopening or issuing a fresh notice u/s 148 of the Act. ITAT noted that There is no order u/s 127 of the Act transferring the jurisdiction of the case from ITO Ward 34(4) to ACIT Ward 34(1). Thus this order of reassessment passed by the ACIT u/s 34(1) of the Act is without jurisdiction and hence is bad in law. In the present memorandum of appeal no attempt has been made by the Revenue to aver whether in fact there was an order u/s 127 of the Act transferring the case to the ACIT Circle 34(1). That being the position the impugned order of the ITAT cannot be faulted. Decided against revenue.

Summary

The Delhi High Court, in this judgment, addressed an appeal filed by the Revenue against an order from the Income Tax Appellate Tribunal (ITAT) concerning the Assessment Year 2006-07. The primary issue was the ITAT's determination that the assessment made by the Additional Commissioner of Income Tax (ACIT), Circle 34(1), was "without jurisdiction." The ITAT found that the case was transferred to the ACIT from the Income Tax Officer (ITO), Ward 34(4), without an appropriate order under Section 127 of the Income Tax Act, 1961. Furthermore, the ACIT failed to independently record reasons for reopening the assessment or issue a fresh notice under Section 148 of the Act, as required.The ITAT specifically noted that "The ACIT, Circle 34(1), New Delhi has admittedly not recorded that he had reasons to believe that income chargeable to tax of the Assessee has escaped assessment." It concluded that the reassessment by the ACIT was "bad in law" due to the lack of jurisdiction. The Revenue did not provide evidence of an order under Section 127 transferring the case, leading the High Court to uphold the ITAT's decision. Consequently, the court dismissed the appeal, stating that "No substantial question of law arises."