Towards the taxpayer’s case the assessing officer who posses valid jurisdiction will record reasons u/s 148(2) for reassessment proceedings unless the issue of notice u/s 148 is not valid. Beneath section 148 of the act reopening notice invalid if the officer who has given the notice varied from the officer who had recorded the causes and the assessment deserved to be cancelled on an alone basis.
Complete Text of Income Tax Appellate Tribunal
1. With respect to the order of Ld. CIT(Appeals)-Faridabad dated 21.01.2019 for AY 2010-11 the same petition through the taxpayer has been informed.
2. The fact inside the case is that the Income Tax Return (ITR) was furnished through the taxpayers dated 29/07/2010 where the income of Rs. 2,87,800. This is gone AIR that taxpayer sold immovable property of Rs 78,81,000 in the AY beneath appeal. ITO, Ward 2(3), Noida has provided the letter which is needed to validate the financial transaction. But no plausible elaboration was filed through the taxpayers. According to the details given through the sub-registrar, the taxpayer has sold Plot no. 230, Block-B, Sector- Date of Hearing 21.08.2019 Date of Pronouncement 02.09.2019 ITA No. 1556/Del/2019 71, Noida for Rs. 75,21,000/-, value for stamp purposes Rs. 78,51,000/- on 06.03.2010.
With respect to this AO executed reassessment proceedings u/s 147 of the Act to assess taxpayers’ income with respect to this which left the assessment. In the letter furnished by the assessee, it is mentioned that the return furnished will be entitled as return filed in response to notice u/s 148 of the Act. The amendment of the obligatory proceedings is carried on from the stage under section 129 of the act, AO noticed. The assessment is finished by AO and the Long term capital gains are calculated and stand on Rs. 35,47,079/- and do the addition of this amount. The reassessment order u/s 143(3)/147 of the Act was passed on 22.12.2017 by ITO, Ward 2(1), Faridabad. The taxpayer summons the reassessment proceedings and the above addition under Ld. CIT(A). The Ld. CIT(A), but refused the taxpayer’s petition.
3. Ld. Counsel towards taxpayers referred to PB 4, and are directions for reopening of the assessment which states as:
“An AIR Information regarding the sale of immovable property amounting to Rs. 78,51,000/- has been received from CIB for examining non-pan financial transactions. Therefore, to ascertain the assessment particulars of the assessee and to verify the transaction, query letters were issued to the assessee to furnish the assessment particulars of the assessee and to furnish the copy of ITR for AY 2010-11 along with computation of capital gain on this transaction. Simultaneously the information was called for from Sub-Registrar. As per the information given by Sub Registrar, the assessee had sold Plot no. 230, Block-B, Sector-71, Noida for Rs. 75,21,000/- (Value for stamp purpose Rs. 78,51,000/-) on 06.03.2010.”
“However, in ITA No. 1556/Del/2019 response to the query letters, no plausible explanation has been furnished by the assessee. Thus, the capital gain arises on this transaction entered into by the assessee during the FY 2009-10 i.e. relevant to AY 2010-11 has escaped assessment. In view of the above facts, on the basis of information in my possession, I have reason to believe that the income under head capital gain arises on of Rs. 78,51,000/- chargeable to tax has escaped assessment within the meaning of section 147 of the I.T. Act, 1961.”
On: 10.03.2017 Sd/- (R.K. SHARMA) IT Officer, ITO, Ward 2(3), Noida
4. ITO, Ward 2(3), Noida has furnished the reason which was recorded, and thus he writes the letter on 7 Sept 2017 PB 10 to the Assessing Officer (ITO, Ward 2(1), Faridabad) revealing the notice u/s 148 of the Act was issued on 30.03.2017. Towards the return for the AY furnished through the taxpayer on 7/9/2017 taxpayer comes before the jurisdiction of ITO, Ward 2(1), Faridabad. The ITO, Ward 2(3), Noida thus it is shifted to ITO, Ward 2(1), Faridabad. Ld. Counsel for taxpayer furnished the ITO, Ward 2(3), Noida who had recorded causes for reopening the assessment was not posing jurisdiction for the taxpayer’s case that the ITO, Ward 2(1), Faridabad besides issued notice u/s 148 and 142(1) of the Act and ends the reassessment order who was posing the jurisdiction for the taxpayer’s case did not record the causes for the reopening of the assessment.
Thus initiations of ITA No. 1556/Del/2019 reassessment proceedings are unlawful, against the law and revokable. In support of which claim he has relied upon the order of ITAT Agra Bench in the case of S.N. Bhargawa vs. ITO 147 ITD 306 in which it was taken under:
“IT: Where Assessing Officer, Agra initiated reassessment proceedings against the assessee and subsequently he transferred the case to Assessing Officer, Mathura, who was having jurisdiction over assessee, and thereupon Assessing Officer, Mathura without recording fresh reasons and on the basis of reasons recorded by Assessing Officer, Agra issued on the assessee a fresh notice u/s 148. Assessing Officer, Mathura had not validity assumed jurisdiction to initiate reassessment proceedings against the assessee.”
5. Ld. DR depends on the orders of the jurisdictions below. Vide order sheet dated 26.08.2019 Ld. DR was straight to imply, if any, other reasons u/s 148 have been recorded by ITO, Ward 2(1), Faridabad. Ld. DR gives the assessment record and furnished that no other reason u/s 148 have been recorded by ITO, Ward 2(1), Faridabad. Ld. DR, but furnished that AO was posing the jurisdiction to proceed through the case on shifting the case from ITO, Noida.
6. I have recognized the competitive submissions. It excludes disputes which cause the reopening of the assessment has been recorded for case by ITO, Ward 2(3), Noida, and the same has no jurisdiction for the taxpayers. When taxpayers furnished letter prior to ITO Ward 2(3), Noida on 07.09.2017 saying that the return furnished is entitled as return having filed in ITA No. 1556/Del/2019 towards notice u/s 148 of the Act and is indeed given through the copy of the acknowledgement of return furnished on the real basis the ITO Ward 2(3) Noida transferred this case to ITO, Ward 2(1), Faridabad, vide letter on 07.09.2017 (PB 10).
AO while finishing the assessment for the case has adopted the procurement security under section 129 of the act. But the given provision is not liable as it is the concern of the opinion of valid jurisdiction in the concern or to validly execute the reassessment proceedings with respect to the taxpayers. This is not the case of succession to practice jurisdiction through 1 to another ITO. As the causes have been recorded for reopening of the assessment through ITO, Noida who was not permitted to execute it, thus there is no outcome and is no value before the law. AO who has jurisdiction for the taxpayer’s case i.e ITO, Faridabad has shown that they did not record any cause for reopening the assessment. This cause comes before in favor of taxpayers through the order of Income Tax Appellate Tribunal (ITAT) Agra Bench in the case of S N Bhargava (supra).
Thus AO’s assumption of jurisdiction is prohibited. AO in Faridabad has wrongly assumed jurisdiction to do reassessment proceedings with respect to the taxpayers. This is supported through the judgment of Hon’ble Gujarat High Court in the case of Hynoup Food & Oil Industries Ltd. vs. ACIT (2008) 307 ITR 115 which directed that AO
recorded reasons towards reassessment and AO provides the notice u/s 148 should be the same individual. Successor AO cannot provide ITA No. 1556/Del/2019 notice u/s 148 upon the grounds of causes recorded through predecessor AO. The Hon’ble Gujarat High Court judged under:
“Held, (i) that so far as the assessment years 1990-91 and 1991-92 were concerned, the officer who had issued the notice under section 148 of the Act, was different from the officer who had recorded the reasons and hence, the notices for both these years were invalid and deserved to be quashed on this ground alone.”
7. From the above discussion I reached the assumption of jurisdiction u/s 147/148 of the Act is not under the law and is entitled to be revoked. Apart from the orders of the council below and cancelled the reopening of the assessment u/s 147/148 of the Act. Finally, the whole addition gets deleted.
8. The petition of the taxpayer is permitted in the result.
The order declared in the open Court.
