CIT Vs M.I. Builders Pvt. Ltd. (Allahabad High Court)
The Revenue filed two income tax appeals arising from orders of the Income Tax Appellate Tribunal (ITAT) relating to Assessment Year 1997-98. The first appeal challenged the Tribunal’s order allowing the assessee’s appeal on the ground that the notice issued under Section 148(1) of the Income-tax Act by the Assistant Commissioner of Income Tax (ACIT), Range-IV, Lucknow, was without jurisdiction and therefore invalid. The second appeal challenged the Tribunal’s order dismissing the Revenue’s appeal against cancellation of the penalty imposed under Section 271(1)(c), which had been based on the reassessment order already set aside by the Tribunal.
The assessee, a private limited company engaged in civil construction, had originally filed its returns before the jurisdictional Assessing Officer based on the location of its registered office. After the registered office shifted to Ashok Marg, Lucknow, the Chief Commissioner of Income Tax revised the territorial jurisdiction under Section 120 of the Act with effect from 1 August 2001. Thereafter, jurisdiction over the assessee vested with the Additional CIT, Range-I, Lucknow, and the assessee filed subsequent returns before that authority.
Despite the change in jurisdiction, ACIT, Range-IV, Lucknow issued a notice under Section 148 on 6 April 2004 for reopening the assessment for AY 1997-98. The assessee objected to the jurisdiction. Although the records were later transferred and proceedings continued before another Assessing Officer, the assessee maintained that the original notice itself was without jurisdiction and all subsequent proceedings were invalid. The Tribunal accepted this contention and quashed the reassessment proceedings.
