Section 148 notice issued by non-jurisdictional Assessing Officer was without jurisdiction

Pavan Morarka Vs ACIT (Bombay High Court)

Respondent’s stand that the Assessing Officer at New Delhi had issued a notice under Section 148 of the said Act on petitioner on 22^nd March 2013 before the limitation period expired and, therefore, the impugned notice issued by the Assessing Officer at Mumbai in continuation of the said proceedings must also be treated as valid and within time is misconceived. This is because we notice that the notice issued by the Assessing Officer at New Delhi itself was invalid and of no effect since it was issued by an officer who did not have jurisdiction over petitioner. We gather support from the case of Commissioner of Income Tax V/s. M.I. Builders (P.) Ltd. (Supra), the assessee had raised the objection with regard to continuation of the proceedings by Income Tax Officer – 1(I), Lucknow on the ground that the said proceedings are illegal as the notice under Section 148 of the said Act issued itself was devoid of proper jurisdiction and ab initio void. The Income Tax Officer – 1(I), Lucknow, however, without considering the objection continued to proceed in the matter and passed the assessment order and also directed to initiate penalty proceedings. The CIT(A) dismissed the appeal of the assessee but the ITAT in the appeal filed by the assessee allowed the appeal of the assessee on the ground that notice issued under Section 148(1) of the said Act was without jurisdiction and, therefore, the subsequent proceedings are invalid. Feeling aggrieved, the Revenue preferred an appeal before the High Court. While dismissing the appeal of the Revenue, the Court held that when the notice under Section 148 (1) of the said Act was issued, ACIT, Range-IV, Lucknow had no jurisdiction over the assessee as the jurisdiction over the assessee was transferred to the Additional CIT, Range-I, Lucknow. It was held that there cannot be situation where two Assessing Officer would have simultaneous jurisdiction over the assessee. Accordingly, it was held that the Tribunal had rightly held that the issuance of notice under Section 148 (1) of the said Act by the non-jurisdictional Assessing Officer was without jurisdiction.

Reopening of Income tax assessment cannot be allowed on grounds of future contingencies

The Division Bench of this Court in DHFL Venture Capital Fund V/s. Income Tax Officer held that where the Assessing Officer sought to make protective assessment by reopening an assessment on the ground that a contingency may arise in future resulting in escapement of income that would be wholly impermissible and would amount to rewriting of the statutory provision.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

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