Case Law Details
Tirlok Singh Vs DCIT (International Taxation) (ITAT Delhi)
In the case of Tirlok Singh vs. DCIT (International Taxation), the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal of the assessee, setting aside the reassessment framed under Section 147 read with Section 143(3) of the Income Tax Act. The central issue was the jurisdictional validity of a notice issued under Section 148 by the Income Tax Officer (ITO), Ward-3, Kurukshetra. Tirlok Singh, an NRI during the relevant assessment year (AY 2009-10), was issued the notice based on cash deposits of ₹70.03 lakh in his bank account. Despite multiple correspondences where he informed the tax authorities of his NRI status, the ITO continued proceedings. Only after representations to the Joint Commissioner of Income Tax (JCIT) was the case transferred to the DCIT (International Taxation), Gurgaon, who later completed the assessment without issuing a fresh Section 148 notice or recording independent reasons.
The ITAT held that since the original reopening was initiated by an officer lacking jurisdiction, the notice and subsequent reassessment were void ab initio. The tribunal emphasized that jurisdiction lies with the appropriate officer—in this case, the DCIT (International Taxation). The absence of a valid notice from the jurisdictional officer rendered the reassessment legally unsustainable. Relying on precedents including Manjit Singh vs. DCIT (International Taxation) and others, the tribunal ruled that procedural lapses concerning jurisdiction cannot be cured by mere transfer of the case. As a result, the reassessment order was quashed, and the appeal was allowed in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal has been preferred by the assessee against the order dated 14.03.2018 of the Commissioner of Income Tax (Appeals)-43, New Delhi [hereinafter referred to as ‘CIT(A)’]
The assessee in this appeal has taken following grounds of appeal:-
1. That the Ld. CIT(A) 43, New Delhi, has erred in confirming the action of the Assessing Officer of framing the assessment at Rs. 71,49,150/-against the returned income of Rs. 1,46,150/- in case of the assessee.
2. (a). That the Ld. CIT(A) 43, New Delhi, has erred in confirming the action of the Assessing Officer with regard to framing of assessment by the DCIT, International Taxation, Gurgaon on the basis of notice issued u/s 148 by the Income Tax Officer, Ward-2, Kurukshetra, who did not have the jurisdiction to issue such notice.
2(b). That, in the absence of the satisfaction of conditions prescribed u/s 147 for reopening the case u/s 148, the whole of the assessment proceedings u/s 147 are ‘void ab-initio’ and liable to be quashed.
3. (a) That Ld. CIT(A) has erred in ignoring the true facts of the case where the appellant had duly intimated to the Income Tax Officer Ward-3, Kurukshetra about his NRI status prior to the issue of notice u/s 148 of the Act.
3.(b) That the Ld. CIT(A) has erred in holding as per para 4.4 that some of the letters submitted by the assessee for which there are valid receipts that they are not available in the record of the ITO, Ward-2, Kurukshetra.
4. Further the Ld. CIT(A) 43, New Delhi has grossly erred in confirming that the notice u/s 148 has been issued by the jurisdictional AO, since the department itself has confirmed that the jurisdiction in case of the Appellant lay with the DCIT, International Taxation, New Delhi, when the case of the appellant was transferred during the impugned assessment proceedings and assessment completed by the DCIT (International Taxation), on the strength of notice u/s 148 as issued by the Assessing Officer, Ward-2, Kurukshetra.
5.(a) That even otherwise, the Ld. CIT(A) 43, New Delhi has grossly erred in confirming the action of the Assessing Officer framing the assessment u/s 143(3) r.w.s 147 without service of notices u/s 148, 142(1) and 143(2).
5(b) That even otherwise, the Ld. CIT(A) 43, New Delhi has grossly erred innot considering that the notices u/s 148, 143(2) & 142(1) as issued by the ITO, Ward 3, Kurukshetra are bad in law, as he was not the jurisdictional Assessing Officer.
6. That without prejudice to the grounds above on merits, the Ld. CIT(A) 43, New Delhi has grossly erred in confirming the addition as made by the DCIT (International-taxation), Gurgaon treating the amount of Rs.70,03,000/- as income of the appellant by making addition u/s 68/69A of the Act.
7. That the Ld. CIT(A) has failed to take into consideration the detailed submissions made and various judgments relied upon by the appellant during the course of assessment & appellate proceedings.
8. That the Ld. CIT(A) has confirmed the additions / disallowances without any cogent reason or legal sustainable basis.
9. That the Appellant craves leave to add or amend the grounds of appeal is finally heard or disposed off.
3. A perusal of the above grounds of appeal reveal that the assessee inter alia has contested the validity of notice issued u/s 148 of the Income Tax Act, 1961 (in short ‘the Act’) for reopening of the assessment by the ITO, Ward-3, Kurukshetra and thereby the very validity of the re-assessment framed u/s 147 of the Act.
4. The brief facts of the case are that an AIR / CIB information was received with the office of the Income Tax Officer (ITO), Ward-3, Kurukshetra that the assessee had deposited a sum of Rs. 70,03,000/- in his bank account during the F.Y. 2008-09 relevant to the assessment year 2009-10. He, on the basis of the said information issued letters to the assessee to provide the source of the aforesaid deposit alongwith other details of related information. The assessee replied to the various letters issued by the ITO, Ward-3, Kurukshetra and inter alia submitted that the assessee was out of India as he had gone to Spain on ‘Work Permit’ fromJune 2004 to 15.10.2008 and that whatever he earned there, the entire amount was transferred to India through banking channels. It was also submitted that the assessee was otherwise an agriculturist and that whatever deposits in the bank were made, that were out of the amount earned and brought from Spain and out of the agriculture income earned by the assessee. After exchange of many letters, the Assessing officer i.e. ITO Ward-3, Kurukshetra issued notice for reopening of the assessment u/s 148 of the Act, which was contested by the assessee inter alia on the ground of jurisdiction of the ITO, Ward -3, Kurukshetra to issue notice u/s 148 of the Income Tax Act on the ground of Territorial jurisdiction pleading that since the assessee had been to Spain for the period from June 2004 to 15.10.2008, hence, the status of assessee was that of a NRI for the assessment year under consideration and as such ITO, Ward-3, Kurukshetra had no jurisdiction to reopen the assessment or to frame the assessment u/s 147 read with section 148 of the Act. However, ITO Ward-3, Kurukshetra reopened the assessment and asked the assessee to file the return of income, in response of which, the assessee filed the return of income. The assessee, however, made representation to the higher officers to the effect that the ITO, Ward-3,Kurukshetra did not have any jurisdiction to reopen and frame the assessment, upon which the Joint Commissioner of Income Tax (JCIT), Kurukshetra vide letter dated 9.12.2016 accepted the representation of the assessee and directed the ITO, Kurukshetra to accede to the assessee’s request immediately and transfer the case to DCIT (International Taxation),Gurgaon, whereby, the ITO, Kurukshetra transferred the case to DCIT (International Taxation), Gurgaon. Thereafter, DCIT(International Taxation), Gurgaon passed the impugned assessment order u/s 147 read with section 143(3) of the Act.
5. Being aggrieved by the above assessment order, the assessee preferred appeal before the Ld. CIT(A). The assessee inter alia contested the jurisdictional error issue of the ITO, Ward, Kurukshetra to reopen the assessment, however, the same did not find favour with the Ld. CIT(A).
6. Before us, the Ld. counsel for the assessee has submitted that the assessment framed u/s 147 read with section 148 of the I.T. Act was bad in law as the very assuming of jurisdiction by the ITO, Kurukshetra to reopen the assessment was without jurisdiction and since the very reopening of the assessment was void-ab-initio, therefore, the assessment framed u/s 147 was bad in law. The Ld. Counsel for the assessee in this respect has brought our attention to the copy of the letter dated 18.1.2016 issued by the ITO, Ward-3, Kurukshetra asking for the details relating to the deposit of Rs. 70,03,000/- in the bank account of the assessee during the F.Y. 2088-09. In response, the assessee filed reply dated 9.3.2016 received in the office of the ITO, Ward-3 on 10.3.2016, wherein, the assessee apart from pleading that the assessee owned agricultural land has mentioned that he went to Spain in F.Y. 2003-04 and came back in F.Y. 2008-09.
A similar query was raised by ITO, Ward -3, Kuruksehtra vide letter dated 25.3.2015, whereupon, the assessee vide reply dated 26.6.2015 had categorically again mentioned that he was to Spain on ‘Work Permit’ fromJune 2004 to 15.10.2008. Another reply dated 23.6.2015 to this effect was given by the assessee which was received in the office of the Income Tax Officer on 26.6.2016. During the assessment proceedings also, the assessee informed about the NRI status to the ITO, Kurukshetra vide letter dated 21.11.2016.Vide letter dated 28.11.2016, the ITO, Kurukeshetra had also required the assessee to submit his copy of Passport to prove that he was to Spain from June 2004 to October 2008, which was duly supplied by the assessee alongwith relevant documents of working and earning income there, vide letter dated 9.12.2016. The Ld. counsel for the assessee has invited our attention to the Notice dated 18.3.2021 issued u/s 148 of the Act and submitted that even before issuance of notice on 18.3.2016, the assessee vide various letters, as mentioned above, had duly informed the ITO, Kurukshetra that the status of the assessee during the relevant period was that of a NRI. However, the ITO, Ward-3, Kurukshetra proceeded to reopen the assessment by issuing notice u/s 148 of the Act for which he had got no jurisdiction. The Ld. counsel for the assessee has further invited our attention to the letter dated 8.12.2016, whereby, the assessee had requested the JCIT to intervene stating that the status of assessee was that of a NRI during the relevant period and that ITO, Ward-3,Kurukshetra did not have jurisdiction to frame the assessment, rather, the jurisdiction to frame the assessee was DCIT (International Taxation), Gurgaon, whereupon, the JCIT, as stated above, vide letter dated l9.12.2016 directed the ITO, Kurukshetra to accede to the request of the assessee and transfer the case to DCIT (International Taxation),Gurgaon.
7. From the facts and evidences mentioned above, it is evident on the file that the ITO, ward-3,Kurukshetra was duly informed by the assessee that he was in Spain from the period June 2004 to October 2008 and it was bought to the knowledge of the ITO, Kurukshetra that the status of the assessee during the assessment year under consideration was that of a NRI and, therefore, jurisdiction to reopen the assessment and frame the assessment u/s 147 of the Act lied with DCIT (International Taxation), Gurgaon. However, the ITO, Ward-3, Kurukshetra having no jurisdiction to reopen the assessment proceeded to issue notice u/s 148 of the Act and, thereby, reopened the assessment and continued with the assessment proceedings till the case was transferred by him to DCIT (International Taxation)Gurgaon on the directions of the JCIT, Kurukshetra.
8. Another relevant fact on the record is that the DCIT (Intentional Taxation) Gurgaon continued with the proceedings from the stage it were discontinued / transferred by ITO Ward-3, Kurukshetra. The DCIT (Intentional Taxation) neither recorded reason of form the belief of escapement of the income for the assessment year under consideration, nor did he issued any notice u/s 148 of the Act. In this case, the notice u/s 148 of the Act issued by ITO, Ward-3,Kurukshetra was without jurisdiction, hence, no reliance can be placed on such a notice issued by an officer having no jurisdiction to do so.The concerned Assessing officer, who was having jurisdiction to frame the assessment, apparently, did not record reasons of having belief of escapement of income and also did not issue any notice u/s 148 of the Income Tax Act and, therefore, the assessment framed by him without assuming a valid jurisdiction to reopen the assessee, was bad in law.
9. The Ld. counsel for the assessee in this respect has placed reliance on the following case laws to stress upon the point that the notice issued for reopening of the assessment by the Assessing officer having no jurisdiction and subsequently assessment framed by the another officer without issuing of notice u/s 148 of the Act being bad in law, is liable to be quashed:-
1. Dushyant Kumar Jain V/s Deputy Commissioner of Income Tax 288 CTR 124 DEL-High Court
2. Hynoup Food & Oil Industries Ltd Vs. ACIT 307 ITR 0115 GUJ-High Court
3. SmritiKedia Vs. Union of India & Ors 339 ITR 0037 CAL-High Court
4. Income Tax Officer V/s Sunil Kumar 153 TAXMANN 38 CHD-TRIB (MAG)
5. Income Tax Officer Vs. Rajender Prasad Gupta 48 DTR489 JODHPUR-TRIB
6. ACIT Vs. Resham Petrotech Ltd 136 ITD185 AHD-TRIB
7. Gaurav Joshi V/s Income Tax Officer 174 DTR 353 JAL-CAMP ASR TRIB
8. Sahi! Mahajan V/s Income Tax Officer ITA NO.353/ASR/2016
9. Amrik Singh V/s Income Tax Officer
142 DTR 6 ASR-TRIB
10. BirBahadur Singh Sijwali V/s Income Tax Officer
53 com 366 DEL-TRIB
11. Income Tax Officer V/s LakhmaniMewalDass
103 ITR347 (SC)
12. Commissioner of Income Tax V/s ParamjitKaur
311 ITR38 P&H-High Court
13. Income Tax Officer V/s JRB Strips Pvt. Ltd
ITA NO.442/CHD/2017 CHD-TRIB
14. Income Tax Officer V/s Balwant Singh Jutla
ITA NO.720/CHD/2018 CHD-TRIB
15. Monika Rani V/s Income Tax Officer
ITA NO.582/CHD/2019 CHD-TRIB
16. Manjit Singh V/s DCIT (INTERNATIONAL TAXATION)
ITA NO.867/CHD/2018 CHD-TRIB
17. Prabha GoyalV/s Income Tax Officer
ITA NO.1139/CHD/2017 CHD-TRIB
10. We find that the issue is squarely covered by the decision of the Coordinate Bench of the Tribunal in the case of ‘Shri Manjit Singh, Vs. DCIT(International Taxation), Chandigarh’ vide order dated 17.12.2019, wherein, the Coordinate Chandigarh Bench of the Tribunal under almost similar circumstances has observed as under:-
“7. Admittedly, no notice u/s 148 of the Act by the DCIT (International Taxation), Chandigarh to the assessee was issued. Since the ITO, Dasuyahad no jurisdiction to reopen the assessment, hence, any notice issued by him has no legal validity. So far as the DCIT (International Taxation), Chandigarh is concerned, he admittedly did not issue any notice u/s 148 of the Act to the assessee, therefore, the very reopening of the assessment without issuance of notice u/s 148 of the Act by the Assessing officer of the competent jurisdiction, is bad in law and the consequential assessment framed u/s 147 of the Act is not sustainable in the eyes of the law and the same is accordingly liable to be quashed.
12. So far as the argument of the Ld. DR that the ITO, Dasuya had transferred the case to DCIT (International Taxation ), Chandigarh and, hence, there was no requirement of issuing of fresh notice u/s 148 of the Act as per the provisions of section 127 (4) of the Act is concerned, we do not find any force in the above contention of the Ld. DR. Firstly, the re-assessment proceedings initiated by the ITO, Dasuyawere without jurisdiction and the same were void abinitio, hence, any transfer of such void proceedings to the Assessing officer of competent jurisdiction did not validate his action and the proceedings……..”
11. Identical view has been taken by the Coordinate Chandigarh Bench of the Tribunal in ITA No. 720/Chd/2018 dated 16.05.2019 in the case of ‘The JCIT (OSD), Chandigarh Vs. Shri Balwant Singh Julta, U.K.’
12. The Ld. DR could not show any case law laying down any contrary proposition of law. Therefore, the issue is squarely covered by the aforesaid decision of the Coordinate Bench of the Tribunal. Respectfully following the same, we hold that the notice issued u/s 148 of the Act for reopening of the assessment by the ITO, Kurukshetra was without jurisdiction, therefore, the reopening of the assessment was bad in law and the consequent assessment framed by the DCIT (International Taxation) is not sustainable in the eyes of law and the same is hereby quashed.
In the result, the appeal of the assessee stands allowed.
Order pronounced on 08.12.2021
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