INCOME TAX ACT, 1961

Section 147 & 148

Reassessment - Jurisdictional Officer - Recording of reasons by non-jurisdictional AO -

Proceedings under section 147/148 have been initiated and completed on the basis of 'reasons recorded' by the Non-Jurisdictional AO and that the assessee has been filing its return of income with ITO, Ward-10(4) wherein as per the PAN and also otherwise the correct jurisdiction lies before the ITO Ward- 10(4) only. The assessee has filed its return of income on 27-9-2010 before the ITO, Ward-10(4) which was duly processed also under section 143(1). Thereafter, notice under section 148 has been issued on 31-3-2016 which has been assigned by ITO, Ward-10(1), New Delhi who apparently did not have jurisdiction upon the assessee. Held: It was an admitted fact that the correct jurisdiction of the assessee lies with ITO, Ward-10(4) and prior to the issuance of notice under section 148, the income tax returns, for assessment years 2015-16 and 2016-17 were filed before ITO, Ward-10(4). This information was already there on the record and even the PAN jurisdiction mentioned that the jurisdiction of the assessee is before ITO, Ward-10(4). The reasons have to be recorded by the jurisdictional AO for reopening of the assessment as contemplated under section 148(2) and the same officer, i.e., jurisdictional AO had to issue a notice under section 148(1). Being the matter of jurisdiction, it cannot be envisaged that a non-jurisdictional AO records the reasons and seeks approval from the higher authorities and then jurisdictional AO takes over the proceedings and passes the assessment order. Such an action has been held to be illegal, in this case, though situation is reversed that reasons have been recorded by non jurisdictional AO but notice was issued by jurisdictional AO. Here, in this case, jurisdictional AO had not recorded the reasons as mandated in section 148(2). Thus, it can be clearly inferred that the notice under section 148(1) has been issued without recording the reasons, because reason recorded by non- jurisdictional AO cannot give jurisdiction to the present AO. The same principle as enunciated in the judgment of Gujarat High Court in Jayshuklal Shah v. CIT (2020) 425 ITR 70 (Guj-HC) : 2019 TaxPub(DT) 4432 (Guj-HC) will apply in the present case also. Hence, on this ground alone, that the proceeding under section 147/148 was void ab initio and without jurisdiction and same was quashed.

Relied:Jayshuklal Shah v. CIT (2020) 425 ITR 70 (Guj-HC) : 2019 TaxPub(DT) 4432 (Guj-HC).