Issue of notice u/s 148 by Non jurisdictional AO not valid. Section 292BB not applicable where assessee had already objected the issue before AO
ABCAUS Case Law Citation:
ABCAUS 3096 (2019) (08) ITAT
The instant appeal filed by the assessee was directed against the order of CIT(A). The assessee filed her return of income. The return was processed u/s 143(1) of the Income-tax Act, 1961 (the Act).
Based on the information found during the course of survey u/s 133A in the case of another party, notice u/s 148 was issued and served on the assessee by affixture. Later, another notice u/s 142(1) was issued and again served by affixture.
In response, the assessee requested to transfer the case to another AO with whom the assessee had filed her return of income for the current AY.
Accordingly, the case was transferred to said ITO and the case was taken up for scrutiny.
Further notices u/s 142(1) and 143(2) were issued and served on the assessee. After verification of the various information submitted by the assessee, assessment was completed by making addition u/s 69 of the Act.
The said addition u/s 69 was made by the AO in reference to the information found during the said survey as per which, assessee had purchased four plots against which assessee had allegedly paid cash apart from the cheque.
Aggrieved with the above order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), assessee raised jurisdictional issue of reopening of the assessment u/s 147 and service of notices u/s 148.
Apart from contesting on merits, it was submitted that assessee had already declared the above payment in her original return of income filed for relevant AY.
After considering the submissions of the assessee, CIT(A) called for a remand report on jurisdictional issue of reopening u/s 147 vis-à-vis 148. After considering the remand report and objections of the assessee, the CIT(A) dismissed the appeal of the assessee.
Before the Tribunal, the assessee submitted that AO had no jurisdiction to initiate proceedings u/s 147 since the jurisdictional ITO had not issued any notice u/s 148.
The Tribunal noticed that as per remand report the AO had clearly brought on record that notice u/s 148 was issued by ITO who did not have jurisdiction over the assessee. Further, the notice was not served on the assessee, but, it was affixed at the address, which was not permanent address of the assessee, where the assessee habitually lived.
It was submitted that upon assessee’s request the case was transferred to jurisdictional ITO who had failed to issue notice u/s 148. Therefore the present ITO had no jurisdiction to complete the proceedings u/s 147.
On the other hand, the Department contended that notices were brought to the notice of the assessee and the assessee had information about the notice and based on the assessee’s request only, the case was transferred to jurisdiction AO. Further, it was submitted that the conduct of the assessee was important and information was very much available with the assessee for reopening of the assessment and it was not necessary to issue another notice to the assessee.
The Tribunal opined that to initiate proceedings u/s 147, AO should have issued notice u/s 148 to get jurisdiction as held in various cases by the Hon’ble High Courts and Supreme Court.
The Tribunal stated that to initiate proceedings, the AO should have a jurisdiction to complete the assessment. In the instant case, present AO, who had completed the assessment u/s 147 without issuing notice u/s 148. However, notice u/s 148 was issued by AO, who did not have jurisdiction over the assessee.
The Tribunal observed that in the remand report, AO had confirmed that he had not issued notice u/s 148, but, brought to the notice of CIT(A) that notice u/s 148 could not be issued twice and he submitted that he had issued notice u/s 143(2), which was within time limit for him to issue notice u/s 148, in order to initiate proceedings u/s 147 rws 149(1)(b).
The Tribunal observed that CIT(A) considered the remand report and rejected plea of the assessee for the reason that assessee had cooperated and participated in the proceedings and assessee could not object considering the provisions of section 292BB. Therefore, according to him, notice u/s 148 was deemed to had been served and it was deemed to be valid notice.
The Tribunal opined that CIT(A) applied the provisions of section 292BB whereas the assessee had already objected the issue of non-serving of notice before the AO, but the AO had not considered the above objection and passed assessment order. Therefore, section 292BB had no application to the case of the assessee and the assessment was completed without proper jurisdiction by the present AO.
The Tribunal stated that the proceedings made by the other non-jurisdictional AO had no relevance for the present assessment. The jurisdictional AO had time to issue notice u/s 148 even before completing the assessment, which was within 6 years to reopen the assessment before completion of the relevant AY.
Issue of notice u/s 148 by Non jurisdictional AO invalid
The Tribunal held that the AO had no jurisdiction to complete the assessment u/s 147 of the Act and accordingly, quashed the assessment made u/s 147.
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addition u/s 68 ca misconduct cash deposit in bank cbdt circular CBDT Instruction cbdt notification cbdt order cbdt press release cgst circular cgst notification cit revision 263 concealment penalty covid-19 custom circular demonetisation due date extension e-way bill faq GST circular GST Council Meeting gst faq gstn advisory gstr-1 GSTR-3B GST rates IBBI ibc icai announcement itat mca circular MCA notification order u/s 119 penalty 271(1)(c) penalty u/s 271(1)(c) Press Release reasons recorded reopening 148 Reopening us 147 Search & Seizure sebi circular sebi regulations transfer and postings unexplained cash credits validity of notice u/s 148 Withdrawal of 2000 500 Bank Notes
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