9911796707
TMI Blog2021 (4) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee against the order of the ld. CIT(A)-I, Jaipur dated 05/03/2019 for the A.Y. 2008-09, wherein following grounds have been taken: 1. The ld. CIT(A) has erred on facts and in law in upholding the validity of order passed by A.O. U/s 147 of IT Act, 1961. 2. The ld. CIT(A) has erred on facts and in law in confirming the addition of ₹ 6,29,044/- by treating the income from sale of property as short term capital gain as against income from business and profession claimed by the assessee. 2.1 The ld. CIT(A) has erred on facts and in law in confirming the above addition by applying provision of Section 50C of the Act without considering the fact that assessee purchased the property in auction from UCO Bank for ₹ 9,02,021/- on 18/09/2007 and sold the same on 26/09/2007 for ₹ 9,81,000/-, therefore, under these peculiar circumstances value adopted by stamp authorities at ₹ 15,98,915/- cannot be considered as deemed sales consideration. He has further erred in applying the provisions of Section 50C without referring the matter to DVO. 3. The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be awarde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at Pg 1 of assessment order) while the notice u/s 148 was issued on 27.03.2015. Thus, at the time of issuance of notice u/s 148, jurisdiction of assessee lies with ITO, Ward- 7(1) and not with ITO, Ward-2(2). Hence, the notice issued by ITO, Ward-2(2) is illegal bad in law. It is a settled law that an order passed by an officer having no jurisdiction to pass such order is void ab initio and deserves to be annulled. The defect in this order is not curable and it cannot be rectified even by sending the matter back to the concerned officer. For this proposition, reliance is placed on the decision of Hon'ble Rajasthan High Court in case of CIT Vs. Poonam Chand Surana (2014) 221 Taxman 0151. In this case survey u/s 133A was conducted at business premises of assessee and notice u/s 148 was issued by ITO at Suratgarh. CIT(A) held that pecuniary or territorial jurisdiction as contemplated u/s 124 was not applicable as assessee was filling his return of income with ITO at Chennai. Hon'ble ITAT held that assessee was regularly filing his returns of income at Chennai and at time of issuance of notice under section 148, ITO at Suratgarh had no jurisdiction over assessee. Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Smt. Sunita Jain Vs. ITO (2017) 49 CCH 0330 (Ahd.) (Trib.) (iv) Devansh Exports Vs. ACIT (2019) 176 DTR 17 (Kol.) (Trib.) The ld. AR has further submitted that from the reasons recorded it can be noted that AO issued notice u/s 148 for the reason that assessee has not filed the return whereas assessee is regularly filing his return with ITO, Ward-7(1), Jaipur. No efforts have been made to ascertain whether assessee has filed the return or not. Thus, the very reason for reopening the assessment that assessee has not filed the return of income is incorrect and therefore, the notice issued u/s 148 is illegal and bad in law as held in the following judicial pronouncements:- (i) Sh. Kulwant Singh vs. ITO ITA No.841/JP/18 order dt. 20.12.2018 (Jaipur) (Trib.) (ii) PCIT Vs. RMG Polyvinyl (I) Ltd. (2017) 156 DTR 79 (Del.) (HC) In view of above, notice issued u/s 148 and consequent order passed u/s 147 is illegal and bad in law and the same be quashed. 6. On the other hand, the ld. DR has vehemently supported the orders of the revenue authorities and also relied on the following decisions: (i) Advantage Strategic Consulting (P) Ltd. Vs Pr.CIT (2017) 88 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction to pass such order is void ab initio and deserves to be annulled. The defect in this order is not curable and it cannot be rectified even by sending the matter back to the concerned officer. In this regard, we rely on the decision of Hon'ble Rajasthan High Court in case of CIT Vs. Poonam Chand Surana (2014) 221 Taxman 0151. In this case survey u/s 133A was conducted at business premises of assessee and notice u/s 148 was issued by ITO at Suratgarh. CIT(A) held that pecuniary or territorial jurisdiction as contemplated u/s 124 was not applicable as assessee was filling his return of income with ITO at Chennai. The ITAT held that assessee was regularly filing his returns of income at Chennai and at time of issuance of notice under section 148, ITO at Suratgarh had no jurisdiction over assessee. Hon'ble High Court held that no error or illegality is found in observations of CIT(A) as approved by the ITAT. The ITO at Suratgarh got jurisdiction over assessee only on 21.08.2007 and prior to that he had no jurisdiction over assessee when he was filing returns of income with ITO at Chennai. Proposal for transfer of jurisdiction over assessee, from Chennai to Suratgarh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oordinate Bench of Agra Tribunal in the case of Deepraj Hospital Pvt. Ltd. Vs. ITO (2018) 65 ITR 663 (Agra) (Trib.) has held as under: If the reopening is based on information received from the investigation dept, the reasons must show that the AO independently applied his mind to the information and formed his own opinion. The AO, in the reasons, has just stated the information received and his conclusion about the alleged escapement of income. As to what the AO did with the information made available to him is not discernible from the reasons. The reasons must also paraphrase any investigation report which may form the basis of the reasons and any enquiry conducted by the AO thereon as also the conclusions thereof. Further where the reasons make a reference to any document, such document and / or relevant portion thereof must be enclosed along with the reasons. Therefore, reasons recorded by the AO are found to be not in accordance with law. Consequently, the reassessment proceedings, culminating in the order under appeal, are also not sustainable in the eye of law and they too are cancelled. Nothing further survives for adjudication. In the absence of the link between the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. We have considered the rival submissions as well as the relevant material on record. The Assessing Officer has reopened the assessment by recording the reasons as under: Reason for issuance of Notice U/s 148 Read with section 147 In this case the assessee has not filed the return of Income for A.Y.2011-12. As per information available on record the assessee has deposited a sum of ₹ 15,20,500/- in the Saving Bank account held with State Bank of Patiala during the F.Y.2010-11. Since the assessee has not filed the return of Income for A.Y.2031-12. Therefore, I have the reason to believe that income of ₹ 15,20,500/- chargeable to tax has escaped assessment for the A.Y.2011-12 and thus it is a fit case to initiate proceeding within the meaning of section 147 of Income Tax Act,1951. Notice u/s 148 of Income Tax Act,1961 is issued accordingly. Thus, it is manifest from the reasons recorded by the Assessing Officer that the Assessing Officer begins with the statement that the assessee has not filed return of income for the A.Y. 2011-12. Further while forming the belief, again the Assessing Officer has stated that the assessee has not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly by the assessee with another officer not having jurisdiction over the assessee. The related contention of the Revenue that the return so filed manually not uploaded in the IT system therefore cannot be accepted more so in the context of reassessment proceedings and where there is fault on the part of the assessee in filing his return of income. 14. Interestingly, during the course of reassessment proceedings, the ITO in his reassessment order stated clearly in Para 5 that in the return of income filed under the head Business, you have declared income of ₹ 175,510 on gross receipts of ₹ 21,93,870 u/s 44AD. It is relevant to note the said return of income was not filed in pursuance to issuance of notice u/s 148 but the same was the return of income which was originally filed by the assessee u/s 139 of the Act. It is therefore clear that the whole foundation of the Revenue's reasoning is contradictory and self-defeating where at the time of issuance of notice u/s 148, it says that the assessee has failed to file his return of income and subsequently, during the proceedings u/s 147, it admits that the assessee has filed his return of income originally under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relying upon the information received from other source, there could not be any reassessment for verification. 17. Similar proposition has been laid down by the Hon'ble Delhi High Court in case of CIT-Central-1 vs. Indo Arab Air Services (supra) wherein it was held as under: 20. Keeping the above legal position in view when the cases on hand are examined, it is seen that as far as Indo Arab is concerned white the AO set out the information received from the ED, he failed to examine if that information provided the vitaI link to form the 'reason to believe' that income of the Assessee had escaped assessment for the A Y in question. While the AO has referred to the fact that the ED gave information regarding cash deposits being found in the books of the Assessee, the AO did not state that he examined the returns filed by the Assessee for the said AY and detected that the said cash deposits were not reflected in the returns. In fact, the AO contradicted himself in the reasons recorded by him by noticing the information of the ED to the above effect and then stating that on perusal of the records for the AY in question it was noticed that the Assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s failed to examine the AIR information so received which would have provided the nexus or the vital link to form a prima facie opinion that income of the assessee had escaped assessment for the impugned assessment year. In absence of necessary nexus between the tangible material and formation of belief, the reassessment proceedings cannot be sustained in the instant case. 19. In light of above discussions, we are of the view that the jurisdictional required as provided in section 147 read with the proviso has not been fulfilled in the instant case. In the result, the reassessment proceedings are hereby quashed and set-aside. In the result, ground no. 1 of the assessee's appeal is allowed. Accordingly, in the facts and circumstances of the case, where the Assessing Officer has reopened the assessment mechanically without application of mind and as well as following the decision of this Tribunal in the case of Narain Dutt Sharma Vs ITO (supra) we hold that the reopening of the assessment is not valid and the same is quashed. The case laws relied upon by the ld. DR has no help to the Revenue, therefore, in the facts and circumstances of the case, where the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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