ITO, Faridabad v. Smt. Asha Pahwa, Faridabad

ITA 3668/DEL/2008 | 2000-2001
Pronouncement Date: 26-02-2010 | Result: Allowed

Appeal Details

RSA Number 366820114 RSA 2008
Assessee PAN CHEME1997O
Bench Delhi
Appeal Number ITA 3668/DEL/2008
Duration Of Justice 1 year(s) 2 month(s) 14 day(s)
Appellant ITO, Faridabad
Respondent Smt. Asha Pahwa, Faridabad
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted G
Tribunal Order Date 26-02-2010
Date Of Final Hearing 10-12-2009
Next Hearing Date 10-12-2009
Assessment Year 2000-2001
Appeal Filed On 12-12-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `G : NEW DELHI BEFORE SHRI DEEPAK R. SHAH ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER I.T.A. NO.3667/DEL/2008 ASSESSMENT YEAR : 2000-01 INCOME-TAX OFFICER M/S. SUBHASH CHANDER PAHWA & WARD-1(3) FARIDABAD. VS. SONS (HUF) H.N O.149 SEC. 7A FARIDABAD. I.T.A. NO.3668/DEL/2008 ASSESSMENT YEAR : 2000-01 INCOME-TAX OFFICER SMT. ASHA PAHWA WARD-1(3) FARIDABAD. VS. H.NO.149 SEC. 7A FARIDABAD. (APPELLANT) (RESPONDENTS) APPELLANT BY : SHRI VIVEK KUMAR SR. DR. RESPONDENTS BY : SHRI ALOK KUMAR GUPTA CA. O R D E R PER DEEPAK R. SHAH ACCOUNTANT MEMBER BOTH THESE APPEALS BY THE REVENUE ARE DIRECTED AGAI NST COMMON ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) FARIDA BAD DATED 14 TH OCTOBER 2008 FOR THE ASSESSMENT YEAR 2000-01 IN AN APPEAL AGAINST RE- ASSESSMENT ORDER FRAMED UNDER SECTION 143(3)/147 OF THE INCOME-TAX ACT 1961 (THE ACT). 2 2. THE REVENUE HAS RAISED THE FOLLOWING COMMON GROU ND BEFORE US:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN QUASHING TH E ASSESSMENT ORDER ON THE GROUND OF LEGAL INFIRMITIES AS TO THE TERRITORIAL JURISDICTION AS WELL AS THE PROCEEDINGS U/S 147/148 AS PER THE PROVISIONS OF THE INCOME TAX ACT 1961 IN C OMPLETE DISREGARD OF FACTS THAT THERE WAS NO CHALLENGE TO T HE ASSESSING OFFICERS JURISDICTION THROUGHOUT THE PROCEEDINGS. 3. THE LEARNED CIT(A) WHILE HOLDING THAT THE ASSESS ING OFFICER DID NOT HAVE JURISDICTION FOR FRAMING ASSESSMENT AND HENCE THE ASSESSMENT IS BAD IN LAW OBSERVED AS UNDER:- 9. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE LD. A.R. ON THE ISSUE OF JURISDICTION AND ALSO PERUSED BOTH THE ORDERS OF ASSESSMENT. FROM THE PLAIN READING OF TH ESE ASSESSMENT ORDERS IT BECOMES CRYSTAL CLEAR THAT TH E A.O. WAS BLINDLY SURE IN HIS MIND THAT THE RETURNS FILED BY THESE APPELLANTS IN RESPONSE TO THE NOTICES U/S 148 FOR THE ASSESSME NT YEAR 2000- 2001 WERE VALID RETURNS FOR ASSESSMENT BEFORE HIM I .E. BEFORE THE ASSESSING OFFICER OF JURISDICTION IN THE EYE OF LAW AS PER SECTION 124(1)(B) OF THE INCOME TAX ACT 1961. WHI LE BOTH THE APPELLANTS COMPLIED WITH THE NOTICES U/S 148 ISSUED BY THE A.O. AND PROVIDED THE INFORMATION ALONGWITH THE ENCLOSUR ES HAVING PHOTOCOPIES OF DOCUMENTS REQUISITIONED BOTH THE AP PELLANTS THROUGH THEIR COUNSEL SH. S.K. GUPTA C.A. HAD OBJ ECTED TO THE TERRITORIAL JURISDICTION FROM TIME TO TIME BUT THE A.O. CONSIDERED ONLY THE PROVISIONS OF SECTION 124(1)(B) OF THE INCOME TAX ACT 1961 AND EXCEEDED BEYOND HIS LEGITI MATE POWERS GRANTED TO HIM UNDER THE ACT IN DECLARING NO T ONLY THE RETURNS FOR THE ASSESSMENT YEAR 2000-01 BUT ALSO R ETURNS FOR THE ASSESSMENT YEAR 1998-99 1999-2000 AND ALSO THE ASS ESSMENT ORDERS U/S 143(3) IN THE STATUS OF HUF BY THE A.O. DELHI FOR ASSESSMENT YEAR 2001-02 AS NON-EST BUT ALSO DISRE GARDED THE CERTIFICATE U/S 68(2)IV/A OF THE VOLUNTARY DISCLOSU RE OF INCOME SCHEME 1997 OBTAINED FROM CIT(IV) NEW DELHI THUS CHALLENGING HIS JURISDICTION ALSO. HE DID NOT APPL Y HIS MIND TO 3 THE ISSUES OF JURISDICTION WHICH THE LD. A.R. OF TH E APPELLANT SH. S.K. GUPTA C.A. WAS REPEATEDLY QUESTIONING IT. HE RESTRICTED HIMSELF ONLY TO SECTION 124(1)(B) AND DI D NOT GO BEYOND IT TO SECTION 124(2) OF THE I.T. ACT 1961 W HICH PERTAINED TO THE DISPUTED JURISDICTION IN WHICH IT IS CLEARLY MENTIONED THAT THE QUESTION SHALL BE DETERMINED BY THE DG OR THE CC OR THE CIT ETC. AS THE CASE MAY BE. THE A. O. HAS TOTALLY IGNORED THIS SECTION 124(2) AND OBSTINATELY HAS DWELT UPON SECTION 124(1)(B) OF THE INCOME TAX ACT 1961 AND THUS IMPOSED UPON HIMSELF THE POWERS OF HIGHER AUTHORITI ES IN DECLARING THE RETURNS FILED WITH THE A.O. DELHI AS NON-EST AND HIMSELF DECLARING TO BE A RIGHTFUL AND LEGAL ASSESS ING OFFICER AS PER THE PROVISIONS OF SECTION 124(1)(B) OF THE INCO ME TAX ACT 1961 AND THUS DECLARING THEM AS NON-EST. THUS BOT H THE ASSESSMENT ORDERS LACK PROPER JURISDICTION FOR THE PRESENT A.O. TO ASSESS THEM AND HENCE NOT ONLY BECOME ULTRAVIRES BUT ALSO VOID AB-INITIO. THE LEARNED CIT(A) ALSO HELD THAT ISSUANCE OF NOTIC E UNDER SEC. 148 IS ALSO BAD IN LAW. IN THIS REGARD HE OBSERVED AS UNDER:- 11. I HAVE CAREFULLY CONSIDERED THE CONTENTION S OF THE LD. A.R. ON THIS ISSUE AND PERUSED THE ORDERS OF AS SESSMENT. REGARDING THIS ISSUE A PLAIN READING OF THE ASSESS MENT ORDER REVEALS THAT NO PROPER SATISFACTION HAS BEEN RECORD ED BY THE A.O. IN BOTH THE CASES ON HIS OWN TO PROCEED AGAIN ST THEM U/S 147/148 IN APPLYING HIS OWN MIND ON THE ISSUE. THE PROCEEDINGS HAVE BEEN CONDUCTED MECHANICALLY AT THE BEHEST OF THE HIGHER AUTHORITIES WHICH HAS BEEN CLEARLY EVID ENT FROM THE CONTENTS OF BOTH THE ASSESSMENT ORDERS. THE STUDY OF THE REASONS RECORDED ALSO LEAD TO SUCH APPREHENSIONS THEMSELVES. IT HAS NOW CLEARLY BEEN LAID DOWN BY NOT ONLY THE A PEX COURT BUT ALSO BY SEVERAL HIGH COURTS AND THE LD. TRIBUNA LS THAT SECTION 147/148 INVOLVES THE PROPER APPLICATION OF MIND BY THE A.O. IN DETERMINING THE INCOME HAVING BEEN ESCAPED AFTER SATISFYING HIMSELF IN ANALYZING/INVESTIGATING THE I NFORMATION IN HIS POSSESSION. THEREFORE FROM THIS POINT OF VIEW THE PROCEEDINGS U/S 147/148 HAVE NO LEGAL SANCTION. 4 4. WE HAVE HEARD THE COUNSELS AT LENGTH. WHEN THE ASSESSEE OBJECTED TO THE JURISDICTION OF THE ASSESSING OFFICER AS PER S ECTION 124(2) THE ASSESSING OFFICER SHOULD HAVE REFERRED THE MATTER EITHER TO T HE DIRECTOR GENERAL OR THE CHIEF COMMISSIONER OR THE COMMISSIONER AS THE CASE MAY BE. IT IS ALSO A FACT THAT SUCH REFERENCE WAS NOT MADE AND THE QUEST ION WAS NOT DETERMINED BY SUCH DIRECTOR GENERAL OR THE CHIEF COMMISSIONER OR THE COMMISSIONER. HOWEVER IT IS IRREGULARITY AND NOT AN ILLEGALITY. ON THIS GROUND ALONE THE ASSESSMENT COULD NOT HAVE BEEN ANNULLED. WE THERE FORE RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE AS TO WHETHER HE HAS JURISDICTION TO ASSESS THE ASSESSEE HEREIN OR N OT AND FOR THIS PURPOSE IF NEED BE TAKE RECOURSE TO SECTION 124(2) OF THE ACT . THE ASSESSEE MAY ALSO DEMONSTRATE AS TO WHETHER HE IS ASSESSABLE BY THE P RESENT ASSESSING OFFICER OR NOT. AS REGARDS PROCEEDINGS UNDER SECTION 147 THOUGH THE REOPENING MAY BE ON THE BASIS OF INFORMATION FURNISHED BY SUPERIO R OFFICER YET SO LONG AS THE REASONS ARE RECORDED BY THE ASSESSING OFFICER H IMSELF AND THE SATISFACTION IS ARRIVED AT BY THE ASSESSING OFFICER HIMSELF AND SINCE THE ASSESSING OFFICER DID NOT HAVE IN HIS POSSESSION TH E RETURN ORIGINALLY FILED IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAD APPLI ED THE MIND WHILE FRAMING ORIGINAL ASSESSMENT. THEREFORE PRIMA FACI E THE ASSESSING OFFICER WAS JUSTIFIED IN RECORDING REASONS THAT INCOME HAS ESCAPED ASSESSMENT. 5 HOWEVER THIS ISSUE IS ALSO REQUIRED TO BE DECIDED AFRESH BY THE ASSESSING OFFICER HIMSELF IN THE LIGHT OF THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO 259 I TR 19. WE THEREFORE RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSIN G OFFICER. THE ASSESSING OFFICER SHOULD NOTE AS TO WHETHER HE HAS VALID JURI SDICTION OVER THE ASSESSEE OR NOT AND THEREAFTER DECIDE AS TO WHETHER HE HAS A NY INFORMATION IN HIS POSSESSION TO ARRIVE AT A FINDING WHETHER THERE IS ANY INCOME CHARGEABLE TO INCOME-TAX. 5. IN THE RESULT BOTH THE APPEALS ARE TREATED AS A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY 2010. SD/- SD/- (GEORGE MATHAN) (DEEPAK R. SHAH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 TH FEBRUARY 2010. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.