Mukesh Kumar 104 BD Chamber DB Gupta Road,Karol Bagh New Delhi Vs. ITO Ward-26(3), New Delhi.
June, 15th 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `E' NEW DELHI
BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER
SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
Mukesh Kumar Vs. ITO
104 BD Chamber DB Gupta Road, Ward-26(3),
Karol Bagh New Delhi.
Assessee by:- None
Revenue by:- Sh. P. Dankanunjna, Sr. DR.
Date of Hearing: 14/05/2015
Date of Pronouncement: 12/06/2015
PER INTURI RAMA RAO, AM :
This is an appeal filed by the appellant directed against the order of ld.
CIT(A)-XVIII, New Delhi in Appeal No.95/11-12 dated 01.03.2012 for the
assessment year 2004-05. These grounds raised in this appeal are as under:
"1. That the learned CIT(A) has erred both in law and on facts
by upholding assessment order framed by assessing officer
u/s 144/147 of the Act, determining the alleged total income
of Rs.4,53,179/- against the income returned of
Rs.1,13,710/- by taking recourse to the provisions of section
147/148 of the IT Act and inter alia making wholly
unwarranted addition of Rs.9,13,710/- on account of
unexplained and bogus gift.
2. That the notice u/s 148 of the IT Act dated 16/03/2009 is
bad in law and without jurisdiction in as much as there was
no material or evidence on record to form a reason to
believe that any income of the assessee, for the concerned
assessment year has escaped assessment. The information
received from DIT (Inv.)-I, New Delhi, was wholly
I.T.A .No.-2358/Del/2012 2
insufficient and could not be cogent material to assme a
valid jurisdiction u/s 147/148 of IT Act. Learned CIT(A)
turned down the submission of the assessee without looking
in to the detail.
3. That the assessment as framed is ab-initio being without
jurisdiction as same has been framed without confronting to
the assessee any material or evidence received from the DIT
(Inv)-I, New Delhi, to show that the assessee has received
bogus accommodation entry amounting to Rs.9,13,710/-.
The assessment has been made on complete non application
of mind. Learned CIT(A) ignored the reply/rebut of remand
report submitted by the assessee. No opportunity for cross
examination was given by the CIT(A).
4. That the learned CIT(A) has erred both on facts and law by
upholding the impugned addition u/s 68 of the Act, failing to
appreciate that provision of section 68 of the Act were
wholly inapplicable as the assessee never maintained any
books of accounts.
5. That in any case, the impugned assessment has been framed
in violation of the principles of natural justice without
granting to the assessee a fair, proper and reasonable
opportunity to the instant case. "
2. Briefly stated the facts of the case are that the appellant is an individual.
He filed return of income for A.Y. 2004-05 subsequently on the basis of
information received from Investigation Wing, New Delhi that the appellant had
received an entry of Rs.4 lac from one Shri Trilok Chand Bansal on 3rd
September 2003 and Rs.4 lac from Shri Subhash Gupta on 4th September 2003,
a notice u/s 148 of the Income Tax Act was issued on 16th March 2009. In
response to said notice, the appellant submitted that the return filed u/s 139 may
be treated as return in response to section 148 of the Act. From the assessment
order, it was clear that the notice u/s 148 was issued by the ITO Ward-26(4),
New Delhi. Based on the reply filed by the ld. Representative the case was
I.T.A .No.-2358/Del/2012 3
transferred to ITO Ward-26(3) New Delhi who had valid jurisdiction over the
appellant. The appellant has not complied with the notices u/s 143(2) and
142(1) of the Act, therefore, the AO was constrained to complete assessment ex
parte by bringing to tax the said amount of Rs.8 lac.
3. Being aggrieved, the appellant filed an appeal before the CIT(A)-XVIII,
New Delhi, who vide order dated 1st March 2012 in Appeal No.95/11-12 had
dismissed the appeal. It was contended before the ld. CIT(A) that the re-
assessment proceedings u/s 147 are invalid in law, inasmuch, as there were no
reasons to believe that the assessment got escaped tax. It was further contended
that the notice issue u/s 148 was invalid, since the ITO who issued notice u/s
148 had no valid jurisdiction over the appellant. On the merit it was contended
that the appellant discharged his onus that lying upon the appellant as the
identity and genuineness and creditworthiness of the lender have been proved
by filing the PAN and ITR of the creditors, however, the ld. CIT(A) has rejected
the contention of the appellant on the legality of the reassessment proceedings
and as well as on merits. Aggrieved the appellant is before us.
4. No one was present on behalf of the appellant. Ld. Sr. Departmental
Representative has placed reliance on the order of the lower authorities.
5. We perused the relevant material on record. In the present case the notice
u/s 148 was issued on 2 nd March 2009 by ITO Ward-26(4) New Delhi. After
receipt of notice the appellant had responded through its authorized
I.T.A .No.-2358/Del/2012 4
Representative and submitted the copy of the return filed under provisions of
section 139. After noticing that the jurisdiction over the appellant is vested with
ITO Ward-26(3), the file was transferred by ITO Ward-26(4) to ITO Ward -
26(3). The ITO Ward-26(3), New Delhi had proceeded with the framing
assessment without issuing fresh notice u/s 148. It means that ITO Ward-26(4),
New Delhi had no valid jurisdiction over the appellant, at the time of issuing
notice u/s 148 of the Act. In such circumstances, it was held by the Hon'ble
Allahabad High Court in the case of CIT Vs. M/s MT Builders Pvt. Ltd., (2012)
349 ITR 271 (All.) that the notice issued by an Officer who had no valid
jurisdiction over the assessee is invalid. The notice under Section 148 of the Act
issued by the Income Tax Officer, Ward-26(4) is non est in the eyes of law
since he had no valid jurisdiction over the appellant either territorial as notified
under Section 124 of the Act or by transferring the case under the provisions of
Section 127 of the Act. Now, the question is whether the action of the Income
Tax Officer, Ward-26(3) New Delhi was valid in law in concluding the
assessment proceedings based on the notice issued under Section 148 of the Act
by the Income Tax Officer, Ward-26(4) who had no valid jurisdiction to issue
the notice. The issue of valid jurisdiction is a condition precedent to the validity
of any assessment under Section 147 of the Act; therefore, the assessment made
pursuant to such notice is bad in law. In support of this proposition we rely upon
the cases of Hon'ble Apex Court in the cases of Y. Narayana Chetty Vs. ITO,
35 ITR 388, 392 (SC); CIT Vs. Maharaja Pratap singh Bahadur, 41 ITR 421
I.T.A .No.-2358/Del/2012 5
(SC); and CIT Vs. Robert, 48 ITR 177 (SC). In the light of the above settled
principle of law, we have no hesitation to quash the reassessment proceedings
since there was no valid notice pursuant to which the reassessment proceeding
was made in the present case. Accordingly, the appeal filed by the appellant is
6. Since we have quashed the reassessment proceedings, we find it not
necessary to adjudicate the grounds relating to the merits of the addition.
7. In the result, the appeal is allowed.
Order pronounced in the open Court on 12/06/2015.
(I.C. SUDHIR) (INTURI RAMA RAO)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 12 /06/2015
Copy forwarded to:
5. DR: ITAT
I.T.A .No.-2358/Del/2012 6
1. Draft dictated on 11/06/2015 PS
2. Draft placed before author 12/06/2015 PS
3. Draft proposed & placed before the JM/AM
4. Draft discussed/approved by JM/AM
5. Approved Draft comes to the PS/PS
6. Kept for pronouncement on PS
7. File sent to the Bench Clerk PS
8. Date on which file goes to the AR
9. Date on which file goes to the
10. Date of dispatch of Order.