Bar Council of Delhi Vs DCIT (E) (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT), Delhi Bench, has restored the income tax assessment proceedings against the Bar Council of Delhi back to the file of the first appellate authority, the National Faceless Appeal Centre (NFAC). The Tribunal’s decision emphasizes the fundamental requirement for tax authorities to prove proper service of the mandatory notice for initiating reassessment proceedings under Section 148 of the Income Tax Act, 1961, before proceeding with the assessment itself.
The case, titled Bar Council of Delhi Vs DCIT (E), involved appeals filed by the assessee (Bar Council of Delhi) challenging orders passed by the NFAC. These NFAC orders were themselves appeals arising from assessment orders completed by the Income Tax Officer (Exemption) or Deputy Commissioner of Income Tax (Exemption) under Section 144 read with Section 147 of the Act. Section 147 deals with income escaping assessment (reassessment), while Section 144 pertains to best judgment assessment, often invoked when an assessee fails to comply with notices in reassessment proceedings.
Before the ITAT, the Bar Council of Delhi raised several grounds, including challenges on the merits of the additions made. However, the primary focus of the appeal, specifically grounds No. 1 to 3, centered on a fundamental jurisdictional issue: the validity of the reopening of the assessment itself under Section 147/148 of the Act. The assessee contended that the mandatory notice required under Section 148 for initiating reassessment proceedings was not served upon the Bar Council in accordance with the provisions of the Act. The assessee also argued that the initiation of proceedings was time-barred, submitting that notices could not have been issued after the expiry of six years from the end of the relevant assessment year as per the law applicable.
