The Delhi Bench of Income Tax Appellate Tribunal (ITAT) ruled that Section 147 is not an option to Section 263 and suppresses assessment order u/s 147 with no jurisdiction.
The petitioner, M/s. Plaza Cable Industries Ltd. furnished its ITR showing a loss of Rs.7,06,97,714 and the assessment was chosen for the investigation. Beneath section 143(3) of the act, next to the finish of the investigation, a notice under Section 148 of the IT Act was being given to reponed and contain some income that has allegedly escaped the former investigation.
Before the first appellate council refused the petition and then the taxpayer furnished another petition to Tribunal. The taxpayer challenged the jurisdiction beneath section 147 read with Section 148 of the Act and then challenges the denial concerning before period expenses to the tune of Rs.19,37,322 in the investigation articulated in pursuance of proceedings beneath Section 147 of the Act.
Mr. Pradip Kumar Kedia, Accountant Member, and Mr. Narender Kumar Choudhry, Judicial Member revealed that the AO has resorted to section 147 of the act as an option to section 263 or Section 154 owing to the admitted concern that the execution beneath section 263 shall not be opted because of restriction. AO announced that the rectification beneath section 154 indeed shall not be opted. The Tribunal moreover sees that the invocation of the jurisdiction beneath section 147 is controlled via its own stringent statutory needs and does not being an option to the law of section 263 of the act.
The Tribunal moreover mentioned that it does not know what type of material would not be drawn on the taxpayer’s record for the original assessment. The load on the assessing officer beneath the first law is not released. The jurisdiction beneath section 147 was executed in a major flippant and casual way.
“The Tribunal ruled that the jurisdiction assumed under Section 147 in this backdrop is ex-facie vitiated and thus requires to be struck down at the threshold. The impugned assessment framed under Section 147 r.w. Section 143(3) is clearly bad in law in the absence of any valid jurisdiction. Consequently, the impugned assessment order dated 04.11.2011 framed in pursuance of nonest jurisdiction stands quashed.”
Mr. Ravi Pratap Mall emerged for the appellant and for the respondent Mr. Parikshit Singh appeared.
