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2007 (9) TMI 324 - AT - Income TaxSimultaneous jurisdiction of the Income Tax Authorities - Validity of notice u/s 148 issued by an officer who did not have jurisdiction over the case at the point of time when that notice was issued - Principles of Estoppel - CCIT passed an order u/s 120 revising the territorial jurisdiction of the Assessing Officer - devoid of proper jurisdiction - Time limitation provided u/s 124(3)(a) - Erroneous assumption of jurisdiction - No prior approval of the CIT was taken as required under the law - For the purpose of shifting the registered office, the assessee followed the due process of law as provided under the Companies Act - claimed by the assessee that it intimated the income-tax authorities accordingly - HELD THAT - In our considered view, ACIT, Lucknow did not have jurisdiction over the assessee on 29-3-2004 when the notice u/s 148(1) was issued by him. Admittedly, jurisdiction over the assessee was transferred to the Additional CIT, Lucknow vide order dated 1-8-2001 passed u/s 120 by the CCIT, Lucknow. Clearly on 29-3-2004 jurisdiction over the assessee vested with Addl. CIT, Lucknow. There cannot be situation where two Assessing Officers would have simultaneous jurisdiction over the assessee, one being Addl. CIT, Lucknow and other being ACIT, Lucknow, unless concurrent jurisdiction is specifically given to them by the CCIT. There is no such claim of the revenue that concurrent jurisdiction was given to two officers in respect to the assessee. Therefore, ACIT, Lucknow did not have jurisdiction over the assessee on 29-3-2004 and clearly the notice u/s 148(1) was issued by the Assessing Officer having no jurisdiction over the assessee. Hon'ble Kerala High Court in P.A. Ahammed v. Chief CIT 2005 (10) TMI 49 - KERALA HIGH COURT held that at any given point of time only one Assessing Officer can have regular jurisdiction over an assessee for assessment under the scheme of the Act. Therefore, when a transfer is effected, the entire file old, pending and the returns to be filed will get transferred to the officer to whom the file is transferred by the CCIT. The use of word case means the entire proceeding under the Act which are transferred to the new officer and the old officer ceases to have jurisdiction. The officer to whom the files are transferred only can make the assessment. Notwithstanding as the assessee has protested within one month of the issuance of notice u/s 148(1) then right course to the Assessing Officer was to refer the matter to the Chief Commissioner as provided under sub-section (2). In any case, invoking of section 124(2) would arise if there was any chance of validation of proceedings by virtue of section 124(3) which in our view is not available to the Assessing Officer in the present case either under clause (a) or under clause (b) of section 124(3). In the instant case, the assessment has been framed by Addl. CIT, Lucknow in pursuance to the notice issued u/s 148(1) by the ACIT, Lucknow. Even though the Addl. CIT, Lucknow held jurisdiction over the assessee to frame the assessment but as the initiation of reassessment proceedings u/s 148(1) are bad in law, therefore, reassessment so framed cannot be held to be legally valid. In Lt. Col. Paramjit Singh's case 1996 (3) TMI 120 - PUNJAB AND HARYANA HIGH COURT , held that reassessment framed by an officer having no jurisdiction would be invalid. In that case the notice was issued u/s 148(1) by ITO, Jalandhar to reassess the assessee for the assessment year 1988-89 but it was quashed by Hon'ble P H High Court, on the ground that assessee is being assessed regularly at Pune and his case has not been transferred from Pune to Jalandhar even though the assessee has shifted his residence from Pune to Jalandhar. Similarly, in Naginimara Veneer Saw Mill (P.) Ltd. 1996 (3) TMI 127 - GAUHATI HIGH COURT , held that notice issued u/s 148(1) by DCIT was invalid as he did not have jurisdiction to do so even though his ITO did have jurisdiction to issue such notice. The argument of learned D.R. that since the assessee has not objected to the assessment framed for the assessment year 200102 and, therefore, ACIT, Range-IV, Lucknow can validly issue notice under section 148(1) is not sustainable in law. As discussed, protection of the proceedings and assessment thereafter on account of failure of the assessee to object within the time allowed u/s 124(3) is available to specific proceeding and not to every proceedings. Erroneous assumption of jurisdiction cannot, in general, be validated. Such validation is specific in section 124(3). Secondly, Principles of Estoppel are not applicable to income-tax proceedings. What may be acceptable or held in one year or in one proceeding cannot be in general held to be applicable to other proceedings. It is held in Anant Mills Ltd.'s case 1992 (9) TMI 27 - GUJARAT HIGH COURT that estoppel is not applicable to successive assessments. In any case, estoppel cannot be made applicable to assumption of jurisdiction . It has to be specifically provided in the statute. We, therefore, do not find any force in the arguments in this regard submitted by the learned D.R. The same are, therefore, rejected. So far as the merit of the case is concerned, in our considered view they are merely academic as reassessment is cancelled as having been initiated without jurisdiction. As a result, we hold that the issuance of notice u/s 148(1) by ACIT, Lucknow was without jurisdiction and, therefore, invalid. The assessment framed on that basis by Addl. CIT, Lucknow will also be invalid and, therefore, is cancelled. The appeal of the assessee is, therefore, allowed. In the result, the appeal of the assessee is allowed.
Issues Involved:
1. Jurisdiction of the Assessing Officer for issuing notice under section 148. 2. Validity of notice under section 148 without prior approval of CIT. 3. Doctrine of estoppel in the context of IT Act. 4. Validity of reasons recorded for reopening assessment. 5. Compliance with the procedure laid down by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO. 6. Addition of Rs. 22,00,000 under section 68. 7. Nature of the appellate order passed by CIT(A). 8. Validity of the order under section 144 of the Income-tax Act. Detailed Analysis: 1. Jurisdiction of the Assessing Officer for Issuing Notice under Section 148: The assessee contended that the notice under section 148 dated 29-3-2004 was issued by the ACIT, Range IV, Lucknow, who did not have proper jurisdiction. The jurisdiction over the assessee had been transferred to Addl. CIT, Range-I, Lucknow effective from 1-8-2001. The Tribunal found that the ACIT, Range-IV, Lucknow lacked jurisdiction on 29-3-2004, making the notice under section 148(1) invalid. The Tribunal emphasized that at any given point, only one Assessing Officer can have jurisdiction over an assessee, and concurrent jurisdiction was not provided. 2. Validity of Notice under Section 148 without Prior Approval of CIT: The assessee argued that the notice under section 148 was issued without obtaining the prior approval of CIT, Lucknow. The Tribunal noted that the approval was indeed obtained and there was no evidence to suggest that the CIT did not apply his mind before granting approval. 3. Doctrine of Estoppel in the Context of IT Act: The assessee claimed that the doctrine of estoppel does not apply against the statute, and the jurisdiction of ACIT, Range IV, Lucknow, was challenged despite the failure to object during the assessment for 2001-02. The Tribunal agreed, stating that jurisdiction cannot be assumed by consent and must be granted by statute or empowered authorities. 4. Validity of Reasons Recorded for Reopening Assessment: The assessee contended that the reasons recorded for reopening the assessment were arbitrary and lacked a live link with any income escaping assessment. The Tribunal found that the reasons were recorded and communicated to the assessee, who objected to them. The Assessing Officer dealt with these objections in accordance with the law. 5. Compliance with the Procedure Laid Down by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO: The assessee argued that the Assessing Officer failed to pass a speaking order to the objections raised against the reopening of the assessment. The Tribunal noted that the Assessing Officer had dealt with the objections and communicated the reasons to the assessee, complying with the procedure laid down by the Supreme Court. 6. Addition of Rs. 22,00,000 under Section 68: The assessee challenged the addition of Rs. 22,00,000 as unexplained cash credits. The Tribunal found that the assessee had provided evidence of the identity, creditworthiness, and genuineness of the transaction with M/s. Skymoon Plantation & Finance Ltd. However, the Assessing Officer inferred that the money belonged to the assessee due to the failure to produce books of account and other documents. The Tribunal considered this issue academic as the reassessment was invalid due to lack of jurisdiction. 7. Nature of the Appellate Order Passed by CIT(A): The assessee argued that the appellate order was not a speaking order and lacked reasons for confirming the Assessing Officer's order. The Tribunal found that the CIT(A) had not provided her own reasons and merely upheld the Assessing Officer's contentions without proper application of mind. 8. Validity of the Order under Section 144 of the Income-tax Act: The assessee contended that the order under section 144 was invalid as it complied with all requirements during reassessment proceedings. The Tribunal did not specifically address this issue, as the reassessment was invalidated due to lack of jurisdiction. Conclusion: The Tribunal concluded that the issuance of notice under section 148(1) by ACIT, Range-IV, Lucknow, was without jurisdiction and invalid. Consequently, the reassessment framed by Addl. CIT, Range-I, Lucknow, was also invalid and cancelled. The appeal of the assessee was allowed.
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