2021 (5) TMI 353 - AT - Income Tax

Reopening of assessment u/s 147 - jurisdiction of competent authority - Validity of order passed by the Ld. DCIT (International Taxation) u/s. 144 read with section 147 - no info about transferring the case from ITO Phagwara to the Deputy Commissioner of Income Tax (International Taxation) Circle Chandigarh - HELD THAT - We notice that in the present case notice u/s. 148 of the Act was issued by the ITO Phagwara after recording reasons for initiating proceedings u/s. 147 of the Act, whereas the assessment order u/s. 144 read with section 147 was passed by the DCIT (international Taxation), Circle Chandigarh. Further, the competent authority has not passed any order u/s. 127(2) of the Act for transferring the case from ITO Phagwara to the Deputy Commissioner of Income Tax (International Taxation) Circle Chandigarh. Since, the coordinate Bench has decided the identical issue in favour of the assessee in the case of Sh. Manjit Singh vs. DCIT International Taxation 2020 (9) TMI 84 - ITAT CHANDIGARH and since the facts and issues involved in the present case are identical to the facts of the of the present case, we find merit in the legal issues raised by the assessee in its appeal. Hence,we allow the legal grounds raised by the appellant/assessee in the present case and quash the order passed by the Ld. DCIT (International Taxation). - Decided in favour of assessee.

Summary

Issues:
Challenge to assessment order passed by AO under sections 144 and 147 of the Income Tax Act, 1961 for the assessment year 2011-12.

Analysis:
1. The assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) dismissing the appeal against the assessment order by the AO under sections 144 and 147 of the Income Tax Act, 1961. The AO determined the total income of the assessee at ?33,14,716, adding ?33,00,000 as income from undisclosed sources and ?14,716 as income from other sources. The assessee challenged this order before the CIT(A), who upheld the AO's action. The assessee then appealed to the Tribunal.

2. The assessee challenged the CIT(A)'s decision on various grounds, including the absence of notice under section 148, lack of compliance with section 147 prerequisites, and improper addition of income without proper hearing. The assessee also contended that the CIT(A) erred in confirming the addition without considering additional evidence submitted. The legal representative for the assessee argued that the legal issues were in favor of the assessee based on a previous Tribunal decision.

3. The Departmental Representative acknowledged that the legal issues favored the assessee based on the previous Tribunal decision. The Tribunal examined the legal grounds raised by the assessee, finding them similar to the previous case where the Tribunal ruled in favor of the assessee. The Tribunal concluded that the notice issued by the AO was not valid due to jurisdictional issues and quashed the order passed by the DCIT (International Taxation).

4. The Tribunal noted that the notice under section 148 was issued by a different assessing officer than the one who passed the assessment order. Additionally, there was no order transferring the case to the Deputy Commissioner of Income Tax (International Taxation) as required by section 127(2) of the Act. Citing the previous Tribunal decision with similar facts, the Tribunal allowed the legal grounds raised by the assessee and quashed the order passed by the DCIT (International Taxation).

5. As a result of quashing the order, the Tribunal did not delve into the other grounds raised by the assessee on the merits. The appeal filed by the assessee was allowed based on the jurisdictional and procedural issues identified.

This detailed analysis of the judgment highlights the key legal issues, arguments presented, and the Tribunal's decision, providing a comprehensive understanding of the case.