RANJEET SINGH Vs. ASSTT COMMISSIONER OF INCOME TAX
INCOME TAX APPELLATE TRIBUNAL
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K.D. Ranjan, Accountant Member -
(1.) THESE cross appeal by the assessee and Revenue arise out of order of the ld. CIT (Appeals)-XXX, New Delhi. THESE appeals were heard together and for the sake of convenience are disposed of by this consolidated order.
(2.) The first issue for consideration in assessee's appeal relates to assumption of jurisdiction under Section 147 of the I.T. Act. The facts of the case stated in brief are the notice under Section 148 of the Act was issued for assessment year 1098-99 on 30th March. 2005 by Income-tax Officer, Ward : 2(2). Ghaziabad. In response to the notice it was submitted by the assessee that he had filed return with the Dy. Commissioner of Income Tax Circle 21(2) Delhi and was being regularly assessed by him. However, it was stated that return filed originally may be treated a return filed in response to notice under Section 147 of the Act. Thereafter the file was transferred by Income-tax Officer. Ward : 2 (2), Ghaziabad, to the Dy. Commissioner of Income-tax. Circle 40 (1). New Delhi. The DCIT. Circle: 40(1) New Delhi passed assessment order on 31st March, 2006.
The assessee challenged the assessment on the grounds of jurisdiction before the ld. CIT (Appeals). It was stated that the assessee filed return of income for assessment year 1998-99 declaring total income at Rs. 2,72,089/- and the said income was assessed as such vide intimation dated 29/06/1999 under Section 147(1)(a) of the Act issued by DCIT, Circle : 21(2), New Delhi. It was also stated that in the reasons recorded the reassessment proceedings were initiated on wrong notion and belief which arc contrary to the facts on record. The assessing officer had recorded the following reasons:
The assessee Shri Ranjeet Singh has received a sum of Rs. 25,80,678/- against acquisition of land on 28/01/1998 and has also received interest of Rs. 13,04,939/- on 11/02/1998. Shri Ranjeet Singh has also made FDRs in the names of his family members and interest on such FDRs is assessable in his hand. Since, the assessee has not filed return for the assessment year 998-99 disclosing interest income and capital gain. I have reason to believe that income of Rs. 13,04,939/- on account of interest received and capital gain on the sale of land has escaped assessment within the meaning of Section 147 of the Income-tax Act, 1961.
In view of reasons recorded as above it was submitted that the income byway of capital gains was not chargeable to tax as agricultural land did not fall within the purview of Section 2(14) of the Act defining the term 'capital asset'. It was also submitted that on interest of Rs. 13,04,939/- tax deducted at source amounting to Rs. 1,46,153/- was claimed in the return of income filed before DCIT and credit for the same has been allowed in the intimation dated 29/0671999. The assessee was granted a refund of Rs. 95,686/-. Therefore, there was no concealment of income. Since the assesses had already filed return of income admitting income earned from compensation, reopening of assessment was done contrary to the facts as mentioned in the reasons recorded. This contention of the assessee was, however, rejected by the ld. Commissioner of Income-tax on the ground that the assessing officer was in possession of information on the basis of which he came to the conclusion that income of the assessee had escaped assessment. He accordingly upheld the re-opening of the assessment.
(3.) 1 Before us the ld. AR of the assessee, Shri Salil Kapoor. assailed the reopening of assessment on the grounds of assumption of jurisdiction under Section 147 of the Act. He submitted that the notice under Section 148 was issued by Income-tax Officer. Ward : 2 (2), Ghaziabad, whereas the assessee was regularly assessed in New Delhi. For assessment year 1998-99 the return was filed in Delhi, which was processed under Section 143(1)(a) of the Act on 29/06/1999. Copy of the return and intimation is placed at page Nos. 37 and 38 of the paper-book filed by the assessee. It was also submitted that the assessee is employed in Indian Air Force as Senior Auditor and is residing in Delhi. In 200S when the notice was issued by the ITO. Ward: 2 (2) Ghaziabad, the jurisdiction was that of the assessing officer in Delhi. The assessee owned agricultural lands in Ghaziabad. Merely because the assessee owned lands in Ghaziabad, the assessing officer at Ghaziabad could not exercise jurisdiction. Since the assessee was assessed in Delhi, the ITO, Ward: 2 (2) issued notice under Section 148 of the Act without any jurisdiction and. therefore, the assumption of jurisdiction is had in law. It was also submitted that the notice under Section 148 has been issued by the ITO with the approval of the id. Commissioner of Income-tax. Under Section 151 (2), it is the Jt. Commissioner of Income-tax, whose satisfaction is required before the notice under Section 148 of the Act is issued. The approval given by the ld. Commissioner of Income-tax cannot be treated as given by the Jt. CIT/Addl. Commissioner of Income-tax. On the basis of these submissions, it has been argued that the assumption of jurisdiction was bad in law and consequently the assessment framed is ab initio void.
4.2 On the other hand, the ld. DR submitted that the proposal of the assessing officer was routed through the office of the Addl. Commissioner/Jt. Commissioner. Without routing the file through the Addl. CIT/JCIT and recording of his satisfaction the Id. Commissioner of Income-tax could not have recorded his satisfaction. Therefore, the requirements of Section 151(2) are satisfied. It was also submitted that the jurisdiction of the assessing officer cannot be challenged by the assessee as per Sections 120(2) and 120(3) of the Act. The jurisdictional issue cannot defeat the provisions of Section 4. the charging section. She placed reliance on the following decisions:
(1) Hindustan Transport Company v. Inspecting Assistant Commissioner of Income-tax 189 ITR 326 (All);
(2) Reckit Colman of India Ltd. and Anr. v. ACIT 252 ITR 550 (Cal); &
(3) B.R. Industries Ltd. v. CIT and Ors. 255 ITR 593 (Del).
She further submitted that any defect in the notice issued under Section 148 will not be fatal to assessment proceedings in view of provisions of Section 292B of the Act.;
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