Raghuraj Laminates Pvt Ltd Vs ITO (ITAT Delhi)
Introduction: The ITAT Delhi has ruled in favor of Raghuraj Laminates Pvt Ltd in their appeal against the order of the CIT(A), NFAC. The appeal was filed for the assessment year 2011-12, and the ITAT has condoned the delay of 22 days in filing the appeal. The main issue in the case was the validity of the notice issued under Section 148 of the Income Tax Act.
Analysis: The appellant argued that the notice issued by the DCIT, Circle 3(1), Haridwar, was illegal and without jurisdiction. They claimed that the jurisdiction of the assessee lies with the ITO, Ward-2(2), Muzaffarnagar, and provided various supporting documents to establish their claim. The respondent, on the other hand, contended that the reassessment order passed by the ITO, Ward 2(2), Muzaffarnagar, cannot be considered invalid as the assessee had informed the Assessing Officer of the change in jurisdiction.
The ITAT examined the facts and found that the notice under Section 148 was indeed issued by the ACIT, Circle 3(1), Haridwar, and not by the jurisdictional ITO, Ward 2(2), Muzaffarnagar. The assessee had raised objections regarding jurisdiction, which were not disposed of by the department. Citing relevant case law, including the judgment of the Allahabad High Court, the ITAT held that the proceedings of reassessment based on a notice issued by an Assessing Officer without jurisdiction are void ab initio. Therefore, the reassessment order passed by the ITO, Ward 2(2), Muzaffarnagar, was deemed invalid and without jurisdiction.
Conclusion: Based on the lack of a valid notice issued by the jurisdictional Assessing Officer, the ITAT Delhi quashed the reassessment order in the case of Raghuraj Laminates Pvt Ltd vs. ITO. The ITAT held that the entire proceedings were void and invalid. Other grounds of the assessee were left open for adjudication since the reassessment order was already quashed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal has been filed against the order of CIT(A),NFAC dated 03.06.2022 for AY 2011-12.
Condonation of delay of 22 days
2. The assessee has filed an application in both the appeals seeking condonation of delay of 22 days. The learned counsel submitted that the assessee company has filed the appeal on 30.07.2022 through online ITAT portal and send the physical appeal set through speed post to the Registrar ITAT and the appeal filed on 25.08.2022. Therefore, the delay of 22 days has been accrued due to the delay in sending the physical set through speed post as the director of the assessee company is travelling out of the town due to some personal reason and return back on 19.08.2022. Thereafter the set was signed by the authorized Director and send the speed post on 20.08.2022. The learned Senior DR strongly opposed to the condonation of delay. However, he could not controvert the fact that the assessee filed appeal on the portal of ITAT online on 30.07.2022.
3. On careful consideration of above we find that the assessee filed online appeal on 30.07.2022 and physical copy reached on 25.08.2022 and thus, said cause shown by the assessee is a reasonable cause beyond control of the assessee. Therefore delay of 22 days in filing the appeal is condoned and appeal is admitted for adjudication.
4. Ground no. 3 of assessee read as follows:-
That, the NFAC has erred in not appreciating that fact, that the notice issued u/s. 148 has wrongly issued by DCIT, Circle 3(1), Haridwar, whereas, the jurisdiction of the assessee lies with ITO, Ward-2(2), Muzaffarnagar, therefore, the notice issued u/s. 148 is illegal, bad in law and without jurisdiction.
5. The assessee has submitted following written submissions on ground no. 3
A) That, the notice issued Us 148 of the ACT by the DCIT, Circle-3(1), Haridwar is illegal, bad in law and without jurisdiction.
a) That, the DCIT, Circle-3(1), Hardwar has issued, the notice Us 148 on 30.03.2008 Page No. 12 of the P/B;
b) The assessee challenged the jurisdiction of DCIT, Circle-3(1), Hardwar has no jurisdiction over the assessee, because, the assessee is having under the jurisdiction of ACIT, Circle-2, Muzaffarnagar vide letter dated 11.05.2018 and 16.08.2018, Page No.14 and 18 to 19 of the P/B;
c) That, the assessee is filing its return of income on the address of M/s Raghuraj Laminates Private Limited, Kamal Theatre Building, Railway Road, Muzaffarnagar Page 56 of the P/B;
d) That, the assessment was completed, for assessment year 2008-09 by the ACIT, Circle-2, Muzaffarnagar and for AY. 2012-13 has been completed by the ITO, Ward 2(2), Muzaffarnagar Page No.20 to 22 and 25 to 28 of the P/B;
e) That, the assessee company has also moved an application for the request of migration of PAN. Number to DCIT/ ACIT, Circle -2, Muzaffarnagar vide application dated 24.08.2013 and also informed the DCIT, Circle Hardwar, during the assessment proceeding for Assessment Year 2012-13, that the jurisdiction of the assessee company. is with DCIT ACIT, Circle -2, Muzaffarnagar vide letter dated 24.11.2014 Page No.23 and 24 of the P/B;
f) Thereafter, the DCIT, Circle-3(1), Hardwar has transferred the case to ITO, Ward-2(2), Muzaffarnagar without any order passed U/s 127 of the Act, which itself proves, that, the assessee is always under the jurisdiction of the ACIT, Circle-2, Muzaffarnagar and regularly assessed under the ACIT, Circle-2, Muzaffarnagar, therefore, the notice issued Us 148 by the DCIT, Circle-3(1), Haridwar is beyond the his jurisdiction, hence, the notice issued Us 148 and initiation of proceedings Us 147 is illegal, bad in law and without jurisdiction.
g) Moreover, the said objection raised by the assessee has been never disposed off and the action of the department, itself proves, that, the notice issued Us 148 and assumption ofjurisdiction by the DCIT, arcle-3(1), Haridwar is illegal, bad in law and withoutjurisdiction.
In view of the above, the basic requirement of section 147 is that the assessing officer must have a reason to believe that any income chargeable to tax has escaped assessment and such belief must be belief ofjurisdictional assessing officer and not any other assessing officer or authority or department. Therefore, the jurisdiction of A to reopen an assessment under section 147 depends upon issuance of a valid notice and in absence of the same entire proceedings taken by him would become void for want of jurisdiction.
That, the assessee company wants top/ace, its reliance on
