Income Tax Appellate Tribunal - Delhi
Ashok Kumar Arora, New Delhi vs Department Of Income Tax on 2 September, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'A' NEW DELHI)
BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER
AND
SHRI T.S. KAPOOR, ACCOUNTANT MEMBER
I.T.A. No.5156/Del/2011
Assessment year : 2003-04
DCIT, Shri Ashok Kumar Arora,
Circle-19 (1), WP-115, Wazirpur Village,
New Delhi. V. Delhi.
(Appellant) (Respondent)
PAN /GIR/No.AAEPA
/GIR/No.AAEPA-
AAEPA-0545-
0545-L
Appellant by : Shri Ram Bilash Meena, Sr. DR.
Respondent by : Dr. Rakesh Gupta, Advocate &
Shri Somil Agarwal, C.A.
ORDER
PER TS KAPOOR, AM:
This is an appeal filed by the revenue against the order of Ld CIT(A) dated 2.9.2011. The grounds raised by the revenue are as under:-
1. Whether on the facts and in the circumstances of the case, the Ld CIT(A) has erred in quashing the assessment order u/s 148/143(3) dated 10.12.2010 on the basis of Assessing Officer's jurisdiction while issuing notice u/s 148 dated 12.3.2010.
2. The appellant craves leave to amend or later all or any of the aforesaid grounds of appeal and amend, alter or add any other ground of appeal.
2. The brief facts of the case are that the assessee has filed his return of income at Delhi and his case for the year under consideration was reopened u/s 147/148 of the Income Tax Act, 1961 on the basis of 2 ITA No...../Del/ notice issued by the ITO, Ward-II(4), Faridabad. On receipt of notice for reopening, the assessee informed the ITO, Ward-II(4), Faridabad that he is a regular assessee with ITO, Ward-19(2), New Delhi and has also filed photo copy of acknowledgement along with the computation of income. On the basis of this information, ITO, Ward-II(4), Faridabad transferred the assessment record to ITO, Ward-19(2), New Delhi and ITO, New Delhi issued detailed questionnaire along with notice u/.s 143(2) & 143(1) of the Act and assessed the total income of the assessee at `.14,75,250/-.
3. Dissatisfied with the order, the assessee filed appeal before Ld CIT(A) and ground No.2 of the appeal challenged the jurisdiction of Assessing Officer. During appellate proceedings, the Ld AR of the assessee argued before ld CIT(A) that appellant was regularly filing his return of income with ITO, Ward-19(2), new Delhi having PAN No. AAEPA0545-L. The AR of the appellant also contended that for assessment year 2003-04, return was filed with ITO, Ward-19(2), new Delhi. The Ld AR further submitted before Ld CIT(A) that ITO, Ward- II(4), Faridabad was not having any jurisdiction over the appellant and further contended "that income has escaped assessment was not recorded by the Assessing Officer". It was a further contended that mere assumption of jurisdiction to reopen the case by ITO, Ward-II(4), Faridabad was contrary to law and therefore the re-assessment order passed by the Assessing Officer is void ab initio and deserves to be quashed. Reliance was placed on the judgment in the following cases:-
1. MI Builders Pvt. Ltd. v. ITO ITAT, Lucknow Bench, 117 TTJ 5.
2. Ranjit Singh v. ACIT 120 TTJ ITAT, F Bench, Delhi.
3. CIT v. Anjali Dua 219 CTR 183 (Del.).
4. CIT v. Anil KhoslaI.T.A. No.838 of 2008 (Delhi) (HC).
4. After going through the submissions, the Ld CIT(A) after relying on the judgment in the case of ACIT v. Chetna Kukereja Delhi ITAT 3 ITA No...../Del/ held that re-assessment proceedings were bad in law. The relevant para of Ld CIT(A)'s order is reproduced below:-
"I have considered the submission of the appellant and facts of the case. It is seen that no reasons were recorded by the Assessing Officer in the present case even officer who had recorded reasons did not make independent application of mind while recording the reasons in as much as he fail to make necessary enquiries to find out as to whether he holds jurisdiction over the case of the appellant. There is nothing on record which could show that he had independently examined the material before issuing notice u/s 148. Vide ground No.2 of this order I have already held that the order passed by the Assessing Officer was without assuming valid jurisdiction and without issuing of notice u/s 148. Since ground No.3,4 & 5 are complimentary to the ground No.2 wherein I have held that assessment made by the ACIT, Circle-19(1) on the basis of notice issued by ITO, Ward-II(4), Faridabad was ab inito void and illegal. As a result, the assessment has been quashed. Therefore, ground No.3,4 & 5 are also allowed in favour of the appellant as the assessment made in the case of appellant was without assuming proper jurisdiction as per law.".
5. Aggrieved, the revenue filed appeal before this Tribunal.
6. At the outset, the Ld DR submitted that reopening was done as the Department had information that assessee had obtained an accommodation entry and long term capital gain declared by the assessee was bogus as stock exchange through which the shares were alleged to be sold had denied of any such transaction. He further argued that assessee had attended the re-assessment proceedings and after completion of assessment of assessee was not at liberty 4 ITA No...../Del/ to challenge the jurisdiction issue. Reliance was placed on the judgments in following cases.
1. Hindustan Transport co. v. IAC of Income Tax 189 ITYR 326
2. CIT v. British India Corporation Ltd. 337 ITR 64.
7. On the other hand, the Ld AR submitted that the question was a legal one as to whether the Assessing Officer at Faridabad could issue notice u/s 148 on an assessee who has been regularly assessed and filing income tax return in New Delhi. In this respect, reliance was placed in the judgments of following cases:-
1. ITO v. Karan Sawhney in I.T.A. No.2098/D/09 & in CO No.213/Del/09.
2. MI Builders Pvt. Ltd. v. ITO in I.T.A. No. 111/Lucknow/06 dt.7th September, 2007.
3. Chetna Kukreja v. ACIT in I.T.A. 2141/Del/09
4. Ranjit Singh v. ACIT ITAT Delhi Bench in I.T.A. No.97/Del/09.
8. We have heard the rival submissions of both the parties and have gone through the material available on record. We find that the facts and circumstances of the present case are same as those relied upon by Ld AR wherein under similar circumstances various courts has decided this issue in favour of the assessee. The Hon'ble Delhi Bench'C' in the case of ACIT v. Smt. Chetna Kukreja held as under:-
"We have head both the parties and have gone through the material available on record. There is no dispute about the fact that notice u/s 148 was issued by the A.O. Ward 1(5), Faridabad whereas the assessee was assessed to tax at Delhi. Subsequently, when this fact was brought to the notice of the A.O. at Faridabad, the case of the assessee was transferred to the A.O. having jurisdiction over the case of the assessee. The ACIT, Circle 23(1), New Delhi did not issue fresh notice u/s 148 5 ITA No...../Del/ but proceeded to complete the assessment on the basis of notice issued by the A.O. Faridabad. Therefore, the order passed by the ACIT, Circle 23(1), New Delhi is bad in law. We find that this issue is squarely covered by the decision of ITAT Delhi Bench 'F' in the case of Ranjeet Singh Vs ACIT (supra) wherein on identical facts, the assessment framed was held to be bad in law. The assessee's case is also covered by the decision of Hon'ble High Court of Delhi in the case of CIT Vs Anjali Dua (supra). In that case, the jurisdiction over the assessee was transferred from Ludhiana to Delhi and thereafter, the assessee filed the return for the Assessment Year 1997-98 onwards at Delhi. The A.O. at Ludhiana had no jurisdiction to issue notice dated 28.03.2003 to the assessee u/s 148 for the Assessment Year 1996-97. Under these circumstances, the Tribunal came to the conclusion that the A.O. at Ludhiana issued notice u/s148 for the I.T.A. No.2141/Del/2009 C.O. No.212/Del/2009 4/4 Assessment Year 1996-97. The decision of ITAT was upheld by the Hon'ble High Court of Delhi. Since the issue is covered by the decisions referred to above in favour of the assessee, we are of the considered opinion that the order passed by the A.O. on the basis of assessments reopened by issue of notice u/s 148 by the A.O. at Faridabad is bad in law. Accordingly, we do not find any infirmity in the order passed by Ld. CIT(A) canceling the assessment.
9. The Hon'ble Delhi High Court in the case of CIT v. Anil Khosla in I.T.. No.838/Del/2008 has also dismissed the appeal filed by the revenue. In that case, the Hon'ble Tribunal had concluded that jurisdictional ITO did not issue any notice and Tribunal; had also held that there was a jurisdictional defect in the notice u/s 148 on the basis of which the Assessing Officer had assumed jurisdiction. Following the 6 ITA No...../Del/ above judicial pronouncement we also hold that notice u/s 147/148 issued by the ITO, Faridabad was bad in law as he has no jurisdiction on the assessee. The Assessing Officer at Delhi had completed re- assessment proceedings without issuing notice u/s 147/148 and therefore the assessment proceedings are bad and void ab initio. In view of the above, we do not find any reason to interfere in the order of Ld CIT(A).
10. In the result, the appeal filed by the revenue is dismissed.
11. Order pronounced in the open court on 7th day of December, 2012.
Sd/- Sd/- (A.D. JAIN) (T.S. KAPOOR) Judicial Member Accountant Member Dated 7th December,2012 *HMS* Copy forwarded to:- 1. The appellant 2. The respondent 3. The CIT 4. The CIT (A)-, New Delhi.
5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi. True copy.
By Order (ITAT, New Delhi).
Date of hearing 10.10.2012
Date of Dictation 30.11.2012
Date of Typing 3.12.2012
Date of order signed by 7.12.2012
both the Members &
pronouncement.
Date of order uploaded on net 7.12.2012
& sent to the Bench concerned.
7 ITA No...../Del/