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TMI Blog2012 (5) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... not deciding the issue on merit. 4. The facts of the case are that the appellant company filed its return of income on 25-11-2006, declaring total income at Rs.56,02,893/-. The said return of income was processed u/s. 143(1) of the Act without any change to the income returned. Thereafter, the case is selected for scrutiny assessment u/s. 143(3) of the Act. Subsequently, the case was scrutinized and the taxable income was determined by the AO was Rs.58,90,900/-.Thereafter, the assessment was reopened by ACIT Circle 15(1), New Delhi and issued notice u/s. 148 dated 29-06-2009. The notice u/s. 148 was served to the appellant at the address 95, Jor Bagh, 1st Floor, New Delhi-110003. The appellant contested against the re-opening proceeding initiated by the ACIT, Circle 15(1), New Delhi stating that the appellant is assessed with ACIT, Vapi Circle, Vapi Gujarat. The re-assessment file was sent by the ACIT Circle 15(1), New Delhi to ACIT, Vapi for completion of assessment. The AO i.e. ACIT Vapi Circle, completed the re-assessment proceeding without further recording the reasons or issuing 148 notice in spite of the objection raised by the appellant. While completing the assessment u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. DR submitted that reopening is in accordance with law and there was no unlawful proceedings initiated against the assessee as held by the CIT(A). 8. The Ld. AR on the other hand, relied upon the order of the CIT(A) and submitted that for the purpose of reopening under section 147 issuing notice u/s. 148 the law provided sufficient safeguards. The AO is empowered to make an escaped assessment and for that purpose the AO is required to acquire clear jurisdiction by issuing notice u/s. 148 of the Act. In the case under consideration Since there is no notice u/s.148 by the jurisdictional AO. The Ld. AR submitted that issuing of notice u/s. 148 is a mandatory provision and not procedural one. Since the AO has failed to comply with the mandatory provision therefore, the CIT(A) has rightly annulled the assessment. The Ld. AR in support of his contention relied upon following judgments:- (1) CIT v. Kurban Hussain Ibrahimji Mithiborwala [1971] 82 ITR 821 (SC) (2) Three Judge Bench decision of the Apex Court in the case of Y. Narayana Chetty v. ITO [1959] 35 ITR 388. 9. It is also the submission of the Ld. AR that some more decisions in this regard have been placed from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of The Assistant Commissioner of Income Tax Vapi Circle, VAPI. 303 Shivam Commercial Complex, Near P.F. Office, N.H. No.8, Vapi Gujarat -396 191. Tel : 0260 2426848/ 2433313 No.ACIT /Vapi/Assessment 2010-11. 13-12-2010 To The Director Resham Petrotech Limited, Survey No.910/4/2/2, Amli Dokmardi, Silvassa-396 230. D & NH. Sir/Madam, Subject:- Proceeding u/s. 148 of the Income Tax Act in the case of of Resham Petrotech Limited. - Kindly refer to notice u/s. 148 of the Income Tax Act issued on 29-6-2009 and your reply to the notice made vide your letter dated 6-8-2009. 2. In this regard, I wish to bring to your kind consideration, that the proceedings initiated u/s. 148 vide issue of notice dated 29-6-2009 are in continuing and will get time barred on 31-12-2010. So, your co-operation is requested and accordingly your compliance is requested as per the contents of this letter mentioned as under. 3. It is hereby informed that, during the course of assessment proceedings, in the case of M/s. Resham Polymers Pvt. Ltd., for A.Y. 2006-07, it was observed by the ACIT Circle-15(1), Delhi that M/s. Resham Polymers Pvt. Ltd. has advanced a sum of Rs.1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re particularly in view of the fact that in between Sunday being holiday. Therefore, it is requested that further time of 8 days may please be allowed so that reply may be filed on merits. However, it is submitted under protest that the impugned proceeding is without jurisdiction and are not valid and this may please be treated as our objection under the Act, interalia, including in the light of the provision of section 292 BB. It is submitted further under protest that there is no applicability of section 2(22)(e) in our case and no alleged income can be taxed in our hands as deemed dividend. Without prejudice it is submitted that as law abiding citizen we are submitting following details in the meantime - 1. Copy of Original return filed original u/s. 139(1) may be treated as filed now in response to this proceedings. 2. Copy of reasons recorded if any may kindly be provided so that necessary compliance can be made by us. 3. The impugned amount is not in the nature of loan and advances and the same is not out of the accumulated profit. In view of all these submission and facts and circumstances of the case, it is humbly requested that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. Sub section (2) provides that the Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so. 17. We have seen from the provisions and scheme of the Act that in reopening of a completed assessment there is nothing arbitrary about any of these provisions and that rigorous checks and controls have been provided on the exercise of power by the AO to initiate an action for re-assessment. In the forefront of these checks and controls is the requirement of the section 148 of the Act to issue proper notice. 18. It will be seen that s. 148 of the Act contains a built-in-safeguard for the assessee in that it makes it obligatory on the assessing officer to disclose to the assessee the material on the basis of which it prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But having held that a proper notice under s.34 is a condition precedent to the assumption of jurisdiction of Ld. Chief Justice goes on to consider the question of waiver and on the facts of the case he holds there is no waiver. With very great respect to the Ld. Chief Justice, it is difficult to understand how there can be a waiver of the condition precedent, compliance with which alone can confer jurisdiction upon an authority or a Tribunal. It is well settled that no consent can confer jurisdiction upon a Court if the Courts has no jurisdiction, and if we take the view that the ITO can have jurisdiction only provided he complies with the conditions laid down in s. 34, then no consent by the assessee or no waiver on his part can confer jurisdiction upon the ITO." 21. In the light of above back ground of discussions let us see the facts noted from the statement of facts filed along with appeal paper by the revenue which is reproduced as under:- "The Ld. CIT(A) has treated the order as nullity. However, this is not acceptable. A very fine line separates the irregularity from nullity. An irregularity is deviation from a rule of law which does not take away the foundation or autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the AO has reason to believe that any income chargeable to tax has escaped assessment. Such belief must be the belief of jurisdictional AO and not any other AO or authority of the department. Therefore, it is well settled that the AO's jurisdiction to reopen an assessment u/s. 147 depends upon the issuance of a valid notice. If the notice issued by him is invalid for any reason the entire proceedings taken by him would become void for want of jurisdiction. 23. One of the contention of the revenue that there is no prescribed form of notice under section 148 Of the Act, we are aware that there is no standard form of notice prescribed under the Act. Therefore, all that is required that is required it should contain all requirements stated in the relevant provisions for which it is issued. The Apex Court in the case of GKN Driveshafts (India) Ltd v. ITO [2003] 259 ITR 19/[2002] 125 Taxman 963 lay down the Law that assessment orders passed by AO without complying with statutory provisions of notices to be served upon the assessee, mentioning the reasons for reopening of assessment and giving opportunity to file their objections as required u/s. 148(2) are not legally valid. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73] 96 ITR 78 (Mad.): TC 51R 430].The requisite belief u/s. 147 must be that of the ITO concerned and not of any other officer. If the ITO does not form, his own belief but merely act at the behest of any superior authority, it must be held that the assumption of jurisdiction under section 148 was bad for non-satisfaction of the conditions precedent [Sheo Narain Jaswal & Ors. v. ITO & Ors. [1989] 176 ITR 352 (Pat.); TC 51R 432.. See also Vishal Swamp Agrawilla v. ITO [1976] CTR (Cal.) 296: TC 51R 432A and Chunnilal Onkarmal (Pvt) Ltd., (1983) 349 ITR 380 (MP): TC 51R 435]'. 25. In the light of above discussions we find that it is well settled law that no consent can confer jurisdiction upon a Court if the Courts has no jurisdiction, and if we take the view that the AO can have jurisdiction only provided he complies with the conditions laid down in sections 147 and 148 of the Act. Since the order of the AO is without jurisdiction we therefore find that the CIT(A) has rightly quashed the order of the AO. We confirmed the order of the CIT(A) on the issue. 26. As regards the merit of the case which has been raised in ground No. 2 raised by Revenue, the CIT(A) did dealt with the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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