In the case of Charu K. Bagadia Versus Assistant Commissioner of Income Tax-23(2), Mumbai The second respondent, Assistant Commissioner of Income Tax Corporate Circle - 4 (2), Chennai, holds Charu K. Bagadia, the appellant on file as an assessee. The appellant filed the revenue under section 143 as suggested by the Assessing Officer (1). After five years, the first respondent, Assistant Commissioner of Income Tax-23(2), Mumbai, issued a notice to the appellant under Section 148 of the Act that purported to reassess the income return that was submitted for the assessment year 2011–2012.
In her response, the appellant claimed that Section 148 of the Act did not grant the first respondent the authority to send such a notice, and as a result, she asked that the reassessment process to be halted. The second respondent then carried on the reassessment proceedings under section 143(2) r/w 129 of the Act, ordering the appellant to appear and submit the return of income to the notice under section 148 of the Act along with supporting documents. The first respondent had previously transferred the appellant's files to the second respondent. After this, the appellant filed a writ petition.
Section 148 of the act states that an Assessing Officer is empowered under Section 148 to assess or reassess any taxable income that may have slipped under the radar and has not been determined in accordance with the requirements of the Income Tax Act. The single bench's ruling on the Writ case determined that although while the notice the first respondent initially issued against the appellant was unlawful, it was not necessary to throw it out because the related procedures have since been transferred to the Chennai-based Income Tax Authorities. The appellant then, appealed to the division bench comprising of Mr. Justice R. Mahadevan and Mr. Justice J.Sathya Narayana Prasad at the Madras HC. The Judge, in the beginning of the judgement said that according to established legal precedent, a jurisdiction cannot be formed or waived, even with assent, and even though an Assessee submits to jurisdiction, he cannot transfer any jurisdictional authority, which he lacked fundamentally. The aforementioned ratio perfectly fits the situation at hand. It is already clear by this, that because the Assistant commissioner of Mumbai did not already have jurisdiction, there was no way they could pass it on. While granting the Writ Petition, the division bench of the Madras High Court held that the six-year limitation period for reopening the assessment for the year 2011–12 under section 147 of the Act had expired on March 31, 2018, and that it was not necessary to address the other issue, which was whether the appellant had fully and truthfully disclosed all the material information required for assessment for the relevant assessment year based on the factual matrix.
The court held that the single judge bench made an error while directing ACIT Chennai to go ahead with the reassessment procedure. The notice issued by the ACIT Mumbai in accordance with section 148 and the subsequent notice issued by the ACIT Chennai, according to the court, cannot be upheld. The reopening of the income tax assessment was carried out by an officer without jurisdiction, according to the Madras High Court, which leds to the invalidation of the reassessment procedures.
Tags : #Highcourt #Madras #Tax #divisionbench #reassesment #overturned #jurisdiction