INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Notice and assessment by two different AOs -

AO found that assessee deposited cash during the year under consideration. A letter was issued to assessee to explain the sources of cash deposited, but there was no compliance. Therefore, AO alleged that assessee did not have any explanation to offer regarding the deposit of cash and the same was deposited out of undisclosed sources of income. Accordingly, notice under section 148 was issued alleging that income of assessee had escaped assessment. Assessee submitted that the proceedings under section 147 were initiated by ITO (Ludhiana), while the assessment was framed by ITO, (Jalandhar), who had not issued any notice under section 148. Therefore, the assessment framed without issuing the notice under section 148 was bad in law. Further, assessee also submitted that the amount of cash deposit as mentioned in notice was different from the amount of cash deposit, which was mentioned in the assessment order. Therefore, the reasons recorded by AO were not emerging from the record available with him. Held: Since assessee's case was transferred to jurisdiction of ITO (Jalandhar), who never issued notice under section 148 but framed the assessment under section 143(3), such assessment framed without issuing notice under section 148 read with section 147 would be liable to be quashed. Further, reasons recorded by AO for reopening the assessment, were not found to be exist on record, therefore, the reassessment framed was liable to be quashed.

Followed:Jawahar Lal Agarwal v. ITO (2017) 190 TTJ (Agra) 870: 2018 TaxPub(DT) 0050 (Agra-Trib), CIT v. Atlas Cycle Industries (1989) 180 ITR 319 (P&H): 1989 TaxPub(DT) 1149 (P&H-HC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : A.Y. 2010-11

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