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TMI Blog2022 (6) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in his appeal raised the following grounds:- 1) That having regard to the fact and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned reassessment order as the assessment order was passed without complying with the mandatory conditions of section 147 to 151 of the Income Tax Act, 1961 and without recording valid reasons as per law and without obtaining valid approval as per law and in any case reopening of the assessment and framing of the reassessment order was contrary to law. 2) That in any view of the matter and in any case, action of Ld. CIT(A) in confirming the action of Ld. AO in reopening of the impugned assessment u/s. 143(3)/147 is bad in law and against the facts and circumstances of the case. 3) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in upholding the action of the Ld. AO in making an addition of Rs. 37,00,000/- allegedly on account of bogus purchases and that too by recording incorrect facts and findings and by disregarding the evidences/submissions filed by the assessee and in violation of principles of natural j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in Range-1, Ghaziabad on 17.12.2008 declaring income of Rs. 1,11,090/-. Subsequently, notice u/s. 148 of the Act dated 30.03.2015 was issued for the assessment year under consideration by the Income Tax Officer, Ward 70(3), New Delhi stating that income chargeable to tax for AY 2008-09 has escaped assessment within the meaning of section 147 of the Act. In response to the said notice the assessee filed letter dated 16.04.2015 stating that the return filed on 17.12.2008 may be treated as return filed in response to the said notice. Assessee also requested for reasons for reopening of assessment by initiating proceedings u/s. 148. The ITO, Ward 70(3), New Delhi by letter dated 02.06.2015 communicated the reasons for reopening of assessment. The assessee by letter dated 21.12.2015 objected to reopening of assessment stating it as bad in law. It was contended that the reasons recorded are vague and there is no material evidence for forming the belief that income has escaped assessment. However, the reassessment was completed on 28.12.2015 u/s. 147 read with section 143(3) of the Act determining the income of the assessee at Rs. 38,11,090/- by the Income Tax Officer, Ward 1(3), G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT. Range-IV, Lucknow vide his letter dated 19.4.2004. ACIT. Range-IV Lucknow ought not to have proceeded with the reassessment proceedings. In any case, according to the protest by the assessee, ACIT, Range-IV. Lucknow transferred the proceedings for the assessment year 1997-98 to the Addl. CIT. Range-1. Lucknow. who finally passed a reassessment Order. It was not the case that assessee had. not objected to the assumption of jurisdiction by ACIT, Range-IV, Lucknow within one month Under Section 124 as claimed by Ld. DR. However, estoppel cannot be invoked from the proceeding for the assessment year 2001-02 which were initialed by the ACIT, Range-IV, Lucknow on the basis of return filed by the assessee with him prior to change of jurisdiction vide order Under Section 120 of 1.8.2001 it is settled principle of law that jurisdiction cannot be assumed by consent. It has to be given by the statute or by the authorities under the statute who are empowered in this behalf. Firstly, the Assessing Officer, ACIT, Range-IV, Lucknow ought to have transferred the proceedings relating to assessment year 2001-02 to the addl. CIT, Range-1, Lucknow immediately after receipt of order Under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Assessing Officer, This clause provides validation of the proceedings initialed on filing of a return, or by issuance of notice Under Section 142(1), or under Section 143(2). or to a show cause notice issued to complete the assessment Under Section 144 if there is a failure to object within one month of imitation of such proceeding. As per Clause (b) where assessee has not filed return originally, then Assessing Officer can issue notice Under Section 148(1) asking the assessee to file the return and in that situation if the assessee does not call in question the jurisdiction of the Assessing Officer issuing the notice Under Section 148(1) then such proceedings and reassessment made thereafter is protected. In the present case, the assessee was originally assessed for the assessment year 1997-98 for which return was filed on 30.11.1997 along with the annual accounts and auditors report. An intimation Under Section 143(1)(a) was issued by ACIT, Range-IV, Lucknow on 24.7.1998. Thereafter the Assessing Officer (ACIT, R-IV, Lucknow) issued notice Under Section 148(1) on 29.3.2004. The protection of proceedings initiated Under Section 148(1) is covered by Clause (b) only and not by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw Mill Pvt. Ltd. v. DOT (Supra), relied on by the I.d. A.R. of the assessee, held that notice issued Under Section 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. 28. The argument of Learned D.R. that since the assessee has not objected to the assessment framed for the assessment year 2001-02 and, therefore, ACIT. Range-IV. Lucknow can validly issue notice Under Section 148(1) is not sustainable in law. As discussed above, protection of the proceedings and assessment thereafter on account of failure of the assessee to object within the time allowed Under Section 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 by Hon'ble Gujarat High Court in Anant Mills Ltd. v. CIT (Supra) that estoppel is not applicable to successive assessments. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ITA 3061/Del/2012 dated 13.03.2015); S Power Pvt. Ltd. Vs. ITO (ITA 454/Del/2014). 10. On hearing both the sides and perusing the order of the authorities below and the paper book filed before me it is noticed that the assessee by letter dated 21.12.2015 objected for reopening of assessment stating as under: Dated: 2112/2015 To, The Income Tax Officer, Ward 1(3), Ghaziabad. Subject: Assessment/re-assessment proceedings u/s. 147 r.w.s. 148 of the Income Tax Act, 1961 in the case of Sh. Kamlesh Kumar Agarwal for the AY 2008-09. R/Madam, As required by your goodself, we are herewith submitting that- During the year in consideration, the assessee had incurred the losses and also closed down the business. Therefore, the assessee had not claimed losses incurred in the business as there was no remote chance to continue the business in near future. After the assessment year under consideration, assessee has also not carried out any business activity. Except this business loss of Rs. 34,779/-, there was no difference between the original return filed and return filed under section 148. During the year in consideration, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Supreme Court in G.K.N. Driveshafts (India) Ltd. (supra) as mandatorily requiring the AO to comply with the procedure laid down therein and to dispose of the objections to the reopening order with a speaking order, the CIT(A) committed an error in not quashing the reopening order and the consequent assessment. 7. The CIT(A) in the order dated 28th January 2011 proceeded to examine on merits the challenge by the Assessee (in Ground No. 4) to the order of the AO disallowing the management service fee. The CIT(A) agreed with the submissions of the Assessee and held that in view of the 'Nil' withholding certificate issued by the DDIT Circle 1 (2) of the International Tax Division in favour of the Assessee in terms of the Double Taxation Avoidance Agreement ('DTAA') between the India and the USA, there was no need for the Assessee to charge tax or withhold tax under Section 195 of the Act. Therefore, on merits the CIT(A) deleted the disallowance of the above deduction. The CIT(A) also noted that the said expenses were not disallowed in AY 2004-05 even when the assessment for the said order so completed with the disallowance of this order. 8. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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