The Mumbai bench of Income Tax Appellate Tribunal (ITAT) while set-aside the assessment order passed by the assessing officer (AO) held that, notice issued under section 148 of the Income Tax Act 1961 lacks jurisdiction.
Assessee Ganesh Umanath Nayak,filed the appeal challenging the validity of assessment order on the ground of jurisdiction as well as on merits of the addition.
Ashwin Chhag counsel appearing on behalf of the assessee submits that the assessment for Assessment Year 2008-09 in the case of assessee was reopened beyond the period of four years.
Before issuing notice under Section 148 of the Income Tax Act, the Assessing Officer was required to take approval from the Competent Authority under Section.151 of the Income Tax Act. But in the present case the AO did take any approval from the competent authority.
Due to that notice issued under Section 148 of the Income Tax Act lacks jurisdiction, hence, the reassessment is liable to be quashed on this ground alone.
Further the council points out that the notice under section 148 of the Income Tax Act has been issued by one Assessing Officer and the assessment has been made by another. The requirement of the law is that the assessment order should be passed by the same Assessing Officer who has issued the notice.
Therefore the Assessing Officer who has passed the assessment order had no jurisdiction over the assessee.
R.A.Dhyani representing the Department contented that assessee for the first time has raised the issue challenging validity of assessment notice also assessee is now raising this trivial issues pointing defects in the notice at second appellate stage as the assessee is not having a strong case on merit.
Rebutting the argument made on behalf of the revenue the assessee submits that the “jurisdictional issue can be raised at any stage. Moreover it is a legal ground hence, can be raised at any stage. No fresh documents are required to be furnished for adjudicating the legal issue”,
The Tribunal of Vikas Awasthy, (Judicial Member) after analyzing the contentions of the both parties observed that Approval/satisfaction from the Competent Authority as specified under the Income Tax Act was mandatory before issuing notice under Section 148 of the Income Tax Act. In the absence of satisfaction, notice issued under Section 148 of the Income Tax Act suffers from inherent incurable defect; hence, proceedings arising from defective notice are vitiated. Therefore the bench set aside the assessment order.
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