Tax officers can't touch you, if you can trace this in their notices.
Tax officers can't touch you, if you can trace this in their notices.
Almost every expert confirms this first! And then reads or listens to his or her client's agony... He (she) checks notice's validity - whether the notice is time barred? Issued by right jurisdictional officer? If he (she) succeeds in his this single second notice check up ie expert finds out an invalidity in the notice then you dear client should rest assured... taxes, penalties, interests, can't even touch your hairs...No matter how fat the demands are? How grave is your fault? YOU ARE SAFE...You have saved yourself from those numerous painful sleepless nights.
Now you're reading the case law which corroborates my statement.
This is the case of Ballu Singh Vs ITO (Income Tax Officer).
This case was brought before the Income Tax Appellate Tribunal (ITAT) Delhi.
The tribunal held that an assessment order based on a notice issued under section 148 (of Income Tax Act, 1961), not by the jurisdictional Assessing Officer (AO), is unsustainable and liable to be quashed. The case began when the AO received information regarding cash deposits made by the assessee, Ballu Singh, in his bank account. This led to the reopening of the case for assessment under section 147 (of Income Tax Act, 1961).
The AO subsequently framed the assessment order dated 29.03.2016, and he assessed the income at Rs. 16,89,866/- under section 147 (of Income Tax Act, 1961) read with section 143(3) (of Income Tax Act, 1961). He treated the cash deposited in the bank account as unexplained income of the assessee, even without considering the set off of cash withdrawal by the assessee. Aggrieved by the AO's action, the assessee appealed before the Commissioner of Income Tax (Appeals) [CIT(A)]. After considering the submissions, the CIT(A) dismissed the appeal of the assessee and confirmed the addition made by the AO. The assessee then appealed against the order of the CIT(A) before the ITAT Delhi.
The tribunal noted that the notice under section 148 (of Income Tax Act, 1961) was not issued by the jurisdictional AO.
However, the assessment was framed by the jurisdictional AO, i.e., ITO, Ward-65(5), New Delhi.
The tribunal observed that the Revenue had failed to answer the question of jurisdiction as the CIT(A) in the impugned order himself stated that the notice under section 148 (of Income Tax Act, 1961) was not issued by the jurisdictional AO. Therefore, it was inferred that the notice under section 148 (of Income Tax Act, 1961) was issued by an Authority which did not have jurisdiction over the assessee.
The Revenue did not present any order by the Competent Authority whereby the jurisdiction was conferred on the Authority who issued the notice under section 148 (of Income Tax Act, 1961).
In the absence of such an order, the tribunal held that the assessment order passed by the AO was based on an invalid notice, and hence, it also vitiated the assessment order in the light of binding precedents as cited by the assessee.
The assessment order was thereby quashed. This case serves as a significant precedent in the interpretation of the Income Tax Act, particularly regarding the issuance of notices under section 148 (of Income Tax Act, 1961) and the jurisdiction of the Assessing Officer.
It underscores the importance of following due process and the correct procedures in the assessment of income tax. The ruling also highlights the role of the ITAT in ensuring that the provisions of the Income Tax Act are correctly applied and that the rights of the assessee are protected.
HOLDING - An assessment order based on a notice issued u/s 148 (of Income Tax Act, 1961), not by the jurisdictional AO, is unsustainable and liable to be quashed.
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