Jamiya Arabiya Nafe Vs ITO (ITAT Delhi)
The assessee, a registered society running a madarsa, filed an appeal before the Income Tax Appellate Tribunal (ITAT) Delhi against the order of the National Faceless Appeal Centre (NFAC), Delhi, dated 12 October 2023, for the assessment year 2011–12. The assessee raised multiple grounds, challenging the legality and jurisdiction of the reassessment proceedings initiated under Sections 147 and 148 of the Income Tax Act, 1961. The main contention was that the reassessment order passed under Section 144 read with Section 147 was illegal, void, and without jurisdiction because it was issued by a non-jurisdictional officer.
The assessee argued that the Income Tax Officer (ITO), Ward 3(2), Bulandshahar, initiated reassessment proceedings and issued a notice under Section 148 after having already transferred the case to the ITO, Ward-Exemption, Ghaziabad. The assessee further contended that no proper notice was served under Section 148 and that the jurisdiction was transferred without following the procedure prescribed under Section 127 of the Income Tax Act. Therefore, both the issuance of the notice and the reassessment order were claimed to be invalid in law.
The factual background showed that the assessee had not filed a return of income for the relevant year. Based on Non-PAN Annual Information Return (AIR) data, it was found that the assessee had deposited ₹38,34,097 in cash in an account maintained with Allahabad Bank, Kolkata Main Branch. Acting on this information, the ITO, Ward 3(2), Bulandshahar, recorded reasons for reopening the assessment, obtained approval from the Principal Commissioner of Income Tax (PCIT), Ghaziabad, and issued a notice under Section 148 dated 26 March 2018. However, there was no response from the assessee. Subsequently, the ITO, Ward-Exemption, Ghaziabad, completed the reassessment under Section 144 read with Section 147 on 25 October 2018, making an addition of ₹38,34,097 as unexplained cash deposits.
