2024 (2) TMI 542 - AT - Income Tax

Assumption of jurisdiction by ITO, Ward-4(2), Jaipur sending reopening notice u/s 148 - as there was difference in the sale consideration disclosed by the assessee vis- -vis adopted by the Stamp Duty Valuation Authority, therefore, the AO formed an opinion that addition u/s 50C of the Act is required to be made - When it came to the knowledge of the AO at Jaipur that he does not have jurisdiction then he transmitted the record at his own and ultimately assessment order has been framed by ITO, Ward-4(3), Kolkata HELD THAT - There is no dispute with regard to the fact that in the PAN data assessee is having address of Kolkata only. The ITO, Ward-4(2), Jaipur had issued notice u/s 148 of the Act on 26.03.2018. This must have been with an idea that if record is being transmitted to the ITO having jurisdiction over the assessee then time limit will expire because on 31.03.2018, six year would come to an end. This notice has been issued by an ITO who does not have territorial jurisdiction over the assessee. Therefore, whole proceeding has been vitiated. An assessee can have property in various parts of the country but that would not mean wherever he has undertaken a transaction, the AOs of all those areas will assume jurisdiction over the assessee. It is an incorrect assumption of jurisdiction by ITO, Ward-4(2), Jaipur. The assessment order on the basis of an incorrect re-opening cannot be sustained. Therefore, we allow this appeal and quash the assessment order. Appeal of the assessee is allowed.

Summary

Issues Involved:
The appeal being time-barred by 55 days, condonation of delay, jurisdictional issue regarding re-opening notice u/s 148 of the Income Tax Act.

Condonation of Delay:
The appeal was found to be time-barred by 55 days, but the assessee contended that the actual delay was only 25 days, calculated from the knowledge of the order rather than the date of passing. The delay was due to a communication gap in the faceless disposal of appeals, as notices were sent via email. The Tribunal deemed it appropriate to condone the delay, considering that no mala fide intention was found on the part of the assessee. It was noted that making the appeal time-barred was not a strategy by the assessee, and thus the delay was condoned, allowing the appeal to proceed on merit.

Jurisdictional Issue - Re-opening Notice u/s 148:
The re-opening notice u/s 148 of the Act was issued by an ITO who did not have territorial jurisdiction over the assessee. The assessment was based on the difference in sale consideration disclosed by the assessee and the stamp duty valuation. The AO formed an opinion that addition u/s 50C of the Act was required. However, it was established that the ITO at Jaipur did not have jurisdiction over the assessee, who had disclosed a Kolkata address in the PAN data. The notice issued by the Jaipur ITO was deemed incorrect, as the entire proceeding was vitiated due to the assumption of jurisdiction by an incorrect authority. Consequently, the assessment order based on this incorrect re-opening was quashed, and the appeal was allowed in favor of the assessee.

Conclusion:
The Tribunal allowed the appeal of the assessee, quashing the assessment order due to the jurisdictional issue regarding the re-opening notice u/s 148 of the Income Tax Act. The delay in filing the appeal was condoned, and the appeal was decided on merit.

Note: Separate judgement was not delivered by the judges in this case.