The Tax Publishers2020 TaxPub(DT) 4343 (Del-Trib)

INCOME TAX ACT, 1961

Section 147

At the time of recording reasons for reopening of assessment, ITO, Ward 2(2), Jaipur was not having jurisdiction over the case of assessee and since jurisdictional AO merely proceeded with notice under section 148 issued by ITO, Ward 2(2), Jaipur and completed assessment under section 147 without issuing fresh notice under section 148 and without recording his own reasons to believe, which was sine qua non for assumption of jurisdiction under section 147, therefore, AO committed irregularity in the process which was not curable under section 292BB and re-assessment made under section 147 was not sustainable in law.

Reassessment - Validity - Jurisdictional AO framed order under section 147 on the basis of section 148 notice issued by AO not having jurisdiction over assessee at the time of recording reasons -

Assessee company challenged validity of reassessment order passed under section 147 on the ground that notice under section 148 was issued by ITO, Ward 2(2), Jaipur on 10-4-2014 after recording reasons. However, on the date of issuance of notice, ITO, Ward-2(2), Jaipur was not having jurisdiction over case of assessee as Director of assessee had informed ITO, Ward 2(2) assessee company had shifted its office to New Delhi and was regularly filing its return of income at Delhi. Also, assessee had got its address changed in PAN databse and same was communicated to assessee by income-tax PAN Services Unit. Held: Clearly the time of recording reasons for reopening of assessment, ITO, Ward 2(2), Jaipur was not having jurisdiction over the case of assessee. Since jurisdictional AO merely proceeded with notice under section 148 issued by ITO, Ward 2(2), Jaipur, which was invalid and completed assessment under section 147 without issuing fresh notice under section 148 and without recording his own reasons to believe, which was sine qua non for assumption of jurisdiction under section 147, therefore, AO committed irregularity in the process which was not curable under section 292BB. In view of this re-assessment made under section 147 was not sustainable in law.

Applied:ITO v. Indus Valley Investment & Finance (P.) Ltd. [July, 2012] [Assessment Year 2002-03] ITA No. 4239/Del/2011 [ITAT-Delhi], Dr. Mrs. K.B. Kumar v. ITO (2011) 12 Taxmann.com 318 (Del-Trib) : 2010 TaxPub(DT) 1360 (Del-Trib).

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