When notice u/s 148 is issued by an assessing officer who has no legal authority to assess the income of assessee, the whole action of reassessment is bad in law and any subsequent notice issued by the A.O who is having the current jurisdiction can also not cure such legal defect.
Facts Related to Reassessment Case under Section 147
The assessee was all along filed income-tax returns in Kolkata, including return for the assessment year 1999-2000 . She received a notice u/s 148 challenged for the assessment year 1999-2000 issued by the Income-tax Officer, Ward-29(3), New Delhi. Subsequently, she received notices u/s 143(2) and 142(1) related to the notice u/s 148 issued by ITO , New Delhi .
The assessee filed a writ in Kolkata High court stating that the notice u/s 148 was issued without jurisdiction as no order of transfer of assessment records of the petitioner from Kolkata to New Delhi under section 127 of the Act the said respondent was passed by the Commissioner of Income tax.
The issue before , Kolkata High Court in Smriti Kedia (Smt) vs UOI 339 ITR 37 (CAL.)/ 250 CTR 221 (CAL.)/ was
Whether the notice under section 148 of the Act issued by the Income-tax Officer, Ward-29(3),Delhi was in accordance with law. If not, whether the subsequent notices can be construed to be independent of the proceedings under section 148 of the Act?
Kolkata High Court held on issue of Reassessment Proceeding under Section 147
The Kolkata High Court held vide its order 8-Apr-11 as under :
It is evident that the Department in its affidavit-in-opposition has not denied the fact that all along the petitioner was assessed at Kolkata. That apart, there is nothing on record to show that pursuant to an order under section 127 of the Act, the assessment records of the petitioner were transferred either from Kolkata to New Delhi or from New Delhi to Kolkata. Therefore, unless records were validly transferred from Kolkata to New Delhi, the said respondent had no jurisdiction to issue notice under section 148 for the assessment year in question. Hence, the impugned notice dated March 28, 2006, under section 148 issued by respondent No. 2 is arbitrary, without jurisdiction and illegal. So far as the other impugned notices are concerned, since it is evident from the notice dated November 13, 2006, issued by respondent No. 3, that it was pursuant to the notice under section 148, the same is also without jurisdiction and illegal. The notice under section 142 of the Act dated November 20, 2006, issued by respondent No. 3, is also without jurisdiction and illegal as evidently it was consequent to the notice under section 148, it being obvious from the “Requisitions” appended to the said notice that the petitioner was intimated that “in response to the notice under section 148, you have not yet filed your return of income”. So far as the notice under section 143(2) dated December 7, 2006, issued by respondent No. 3 is concerned, since it was enclosed along with the notice dated December 7, 2006, with regard to the assessment proceedings under section 147 initiated by respondent No. 2 for the said assessment year, that too, is arbitrary and illegal. Therefore, the notices dated November 13, 2006, November 20, 2006, December 7, 2006, and the other notice dated December 7, 2006, all issued by respondent No. 3 are set aside and quashed. Hence, the writ petition is allowed.
Thus , the assessee and taxpayer should always take note of the aforesaid judgment of the Kolkata High Court in a case of reassessment proceeding under section 147