Only AO holding charge over an assessee for assessment purposes could issue reassessment notice u/s 148 – ITAT
ABCAUS Case Law Citation
ABCAUS 3587 (2022) (03) ITAT
Important case law relied referred:
Lt. Col. Paramjeet Singh vs. CIT (1996) 220 ITR 446
Attar Singh & Ors.
In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming reassessment u/s 148 of the Income Tax Act, 1961 (the Act).
The Assessing Officer (AO) receied the information that the assessee along with his brothers and others had entered into a unregistered collaboration agreement with a developer for the acquisition of land for the development / construction of a housing complex.
Finding that no income from the said transaction had been shown by the assessee, proceedings u/s 148 of the Act was initiated.
The AO concluded that the provisions of Section 45(2) were applicable to the sale of lands by the assessee and computed the total income inclusive of the capital gains and business profits thereon.
Before the Tribunal the assessee raised an additional ground concerning jurisdiction of the AO to assume authority over the assessee.
The Tribunal noted that the appellant was employed in the Army and being assessed by the Salary Circle AO holding jurisdiction over Other Ranks of the Army personnel of Medical Corps.
The Tribunal stated that if at all any action had to be taken against the Appellant for any alleged escapement of income then it was for the Army Salary Circle AO holding authority over the Appellant who could have done so.
The Tribunal held that the Income-tax Officer other than said AO could not have interfered in the matter with a section 148 notice unless the case had been duly transferred to him.
It is well settled that it is only the AO holding charge over an assessee for assessment purposes who could issue a notice for reassessment, in other words, no AO, other than the assessee’s own AO, could issue a notice for reassessment said ITAT.
The Tribunal noted that Hon’ble High Court has ruled that if the assessment proceedings of an assessee is to be reopened or if the income for the relevant assessment year is to be reassessed, it is the Income-tax Officer who could assess the same in the first instance who has jurisdiction to proceed in the matter u/s 147 read with Section 148 of the Act, unless of course the case had been transferred by a competent authority to another AO u/s 127 of the Act.
The Tribunal also noted that in a similar situation the Coordinate Bench of the Income-tax Appellate Tribunal has held that the assumption of jurisdiction by a different AO who was other than the AO holding jurisdiction over the assessee for the relevant year was invalid.
The Tribunal opined that in the instant case, the assumption of jurisdiction to reassess the appellant was irregular and fallacious. Respectfully following the orders stated the Tribunal held that the assumption of jurisdiction by the ITO, other than jurisdictional AO was erroneous, illegal and void.
Thus the ground of appeal was allowed in favour of the assessee.
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