Sunil Chablani v. CIT (International Taxation)

Case snapshot

Sections / provisions: 147; 148; Jurisdiction

Questions before the Court / Tribunal

• See the source-driven case record below.

Material facts and background

Union of India vs. Ashish Agarwal (2022) 326 CTR (SC) 473 : (2022) 213 DTR (SC) 217 Counsel appeared : Mahendra Gargieya & Devang Gargieya, for the Assessee : Anil Dhaka, for the Revenue ORDER Rathod Kamlesh Jayantbhai, A.M. : The assessee is aggrieved from the order of the assessment passed under s. 147 r/w s. 144 (hereinafter referred as learned AO) for the asst. yr. 2018-19, dt. 29th Dec., 2023 which in turn passed after the directions given by the DRP passed under s. 144C(5) of the IT Act, 1961 (in short 'the Act'), dt. 28th Nov., 2023. 2. In this appeal, the assessee has raised following grounds : "1. The very action taken under s. 147 r/w s. 148 of the Act, dt. 30th March, 2022 is bad-in-law without jurisdiction and being void ab initio, the same kindly be quashed. Consequently, the impugned assessment framed under s. 147 r/w s. 144, dt. 29th Dec., 2023 also kindly be quashed. 2. The impugned assessment order passed under s. 144/147 r/w s. 144C is completely without jurisdiction inasmuch as the learned AO, Circle (International Taxation), Jaipur not holding any valid jurisdiction and therefore, the impugned notice issued under s. 148, dt. 30th March, 2022 and the consequent,...

2.1 In addition, the assessee also filed a prayer for raising additional grounds of appeal dt. 29th April, 2024 and 27th May, 2024. The additional grounds so raised read as under : "8. The impugned assessment order dt. 29th Dec., 2023 is completely devoid on jurisdiction and is a nullity inasmuch as the directions issued by the DRP vide its order dt. 28th Dec., 2023 under s. 144C(5) of the Act was without bearing Document Identification Number (DIN) which is violation of the binding instructions of CBDT and thus, the impugned assessment order having been passed without there being any valid directions of the DRP-1, New Delhi, may kindly be held as non est and may kindly be quashed." "9. The impugned notice under s. 148 and impugned order under s. 148A(d) of the Act, dt. 30th March, 2022 are nullity having been passed in complete violation of the binding notification dt. 29th March, 2023 issued under s. 151A r/w s. 144B of the Act, mandating for the learned AO to complete the proceeding in faceless manner only as against done manually and hence, the same deserves to be quashed." "10. The learned AO further erred in law as well as on the facts of the case in imposing tax, surcharge,...

Appellant / assessee submissions

assessee, after receiving the impugned notice under s. 148 sent on dt. 13th April, 2022, raised his objections vide letter dt. 23rd July, 2023 (PB 70-72) no reply came from the ITO, Ward 2(2), Ajmer but strangely the same was replied by Officer, Circle (International Taxation), Jaipur admitting, the very fact and the contention of the assessee that she might be holding the correct jurisdiction over this assessee but not the ITO, Ward 2(2), Ajmer who issued the impugned notice under s. 148. 1.3 Supporting Case Laws : Reliance is place on the following cases : (A) CIT vs. Smt. Anjali Dua (2008) 219 CTR (Del) 183 : (2008) 11 DTR (Del) 93 (DC 1-2) where in it is held that : "4. It is in this background that the Tribunal noted that the request of the assessee to transfer the jurisdiction was noted in the letter dt. 25th March, 1998, whereby the no objection of CIT, New Delhi, was conveyed to the CIT, Ludhiana. It is also noted that thereafter the assessee submitted returns for the asst. yrs. 1997-98 onwards at New Delhi. It is in these facts and circumstances that the Tribunal came to the conclusion that insofar as, the assessee was concerned, after the said transfer, it is only...

1 : (2022) 136 taxmann.com 246 (All) (DC 23-35) : "Whether mere digitally signing a notice is not issuance of notice and point of time when a digitally signed notice in form of electronic record is entered in computer resources outside control of originator, i.e., AO, that shall be date and time of issuance of notice under s. 148 r/w s. 149—Held, yes—Assessee filed its return and assessment was completed accordingly—Subsequently, a notice under s. 148 digitally signed by AO was sent to assessee through email and e-mail was received by assessee on his registered e-mail Id on 6th April, 2021—Assessee submitted that reassessment notice was issued on 6th April, 2021 whereas limitation for issuing notice under s. 148 r/w s. 149 expired on 31st March, 2021 and, thus, notice was time-barred—Said objection was rejected on ground that since notice was digitally signed by AO on 31st March, 2021, it would be deemed to have been issued within time, i.e., on 31st March, 2021—Whether since impugned notice under s. 148 was issued to assessee on 6th April, 2021 through e-mail, impugned notice under s. 148 was time-barred and consequently, it was to be quashed—Held, yes (Paras 22 to 30) (In favour...

Revenue / respondent submissions

means the AO only but not the "Jurisdictional AO" ("JAO"). If the interpretation as contended, is accepted then the "AO" may means any AO situated anywhere in the country i.e., right from Jammu & Kashmir till Kanyakumari, may be the AO to assess the income of an assessee stationed at Ajmer, which can never be the legislative intention. In support the learned Authorised Representative of the assessee relied upon the definition of the AO given in s. 2(7A) of the Act. The case of the assessee pertains to the AO, Circle (International Taxation), Jaipur was vested with the jurisdiction to Act as an AO, is fully supported by the PAN profile and the jurisdictional details (PB-II 105) of the assessee which clearly shows the AO holding the charge was the International Taxation Charge. In this background only, when the assessee, after receiving the impugned notice under s. 148 sent on dt. 13th April, 2022, raised his objections vide letter dt. 23rd July, 2023 (PB 70-72) no reply came from the ITO, Ward 2(2), Ajmer but strangely the same was replied by Officer, Circle (International Taxation), Jaipur admitting, the very fact and the contention of the assessee that she might be holding the...

assessee has raised objections. He totally failed to explain and justify the said transaction. Accordingly, sales consideration of Rs. 69,90,000 received by the assessee from sell of immovable property was treated as unexplained money under s. 69A in the hands of the assessee. This fact has been duly incorporated in the draft assessment order. The Hon'ble DRP vide its order dt. 28th Nov., 2023 has issued necessary directions to the AO to pass a reasoned order on the basis of submission of the assessee which was enclosed as an Annex. "A" to this order. The said Annex. "A" is a computation of income filed by the assessee before Hon'ble DRP. This computation consists only details of sale value, indexed cost of improvement and capital gain and no such supporting documents were furnished therewith. This is the only document which was filed by the assessee in support to his claim. As per the directions issued by Hon'ble DRP as well as considering the evidences furnished by the assessee, final assessment order was passed on 29th Dec., 2023 making addition of Rs. 69,90,000 on account of long-term capital gain. Your good self will find that the AO while passing final assessment order has...

Court / Tribunal analysis and reasoning

stock, the amount of Rs. 70,04,814 also found credited in the P&L a/c as income from undisclosed sources. The net effect of this double entry accounting treatment is that firstly the unrecorded stock of rice has been brought on the books and now forms part of the recorded stock which can be subsequently sold out and the profit/loss therefrom would be subject to tax as any other normal business transaction. Secondly, the unrecorded investment which has gone in purchase of such unrecorded stock of rice has been recorded in the books of accounts and offered to tax by crediting the said amount in the P&L a/c. Had this investment been made out of known source, there was no necessity for assessee to credit the profit/loss account and offer the same to tax. Accordingly, we do not see any infirmity in assessee's bringing such transaction in its books of accounts and the accounting treatment thereof so as to regularize its books of accounts. In fact, the same provides a credible base for Revenue to bring to tax subsequent profit/loss on sale of such stock of rice in future. 2.11 Having said that, the next issue that arises for consideration is whether the amount surrendered by way of...

and gross violation of the Notification No. 18 of 2022, dt. 29th March, 2022 (PB-II 104) titled as E-Assessment of Income Escaping Assessment Scheme, 2022 issued by the Central Government in exercise of the power conferred by ss. 151A(1) and (2) of the Act which has made the reassessment in any case mandatory through the EAssessment Scheme only but not otherwise cl. 3 of the Scheme provides the scope which includes the assessments/reassessment under s. 147 as also the issuance of notice under s. 148 of the Act, shall be through automated allocation only in accordance with Risk Management Strategy (herein after referred to as "RMS") formulated by the CBDT (herein after referred to as "CBDT") under s. 148 and in a faceless manner as provided under s. 144B of the Act. 2. For a ready reference cl. 3 is being reproduced hereunder : "For the purpose of the Scheme,— (a) assessment, reassessment or recomputation under s. 147 of the Act, (b) issuance of notice under s. 148 of the Act. shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in s. 148 of the Act for issuance of notice, and in a faceless manner, to the extent...

quashed, the consequential orders passed by the Department pursuant to the notices issued under ss. 147 and 148 would also get quashed." 3.3 Hexaware Technologies Ltd. vs. Asstt. CIT & Ors. (Writ Petn. No. 1778 of 2023) [reported at (2024) 338 CTR (Bom) 536 : (2024) 237 DTR (Bom) 408—Ed.] (Para 39). "39. With reference to the decision of the Hon'ble Calcutta High Court in Triton Overseas (P) Ltd. (supra), the Hon'ble Calcutta High Court has passed the order without considering the scheme dt. 29th March, 2022 as the said scheme is not referred to in the order. Therefore, the said judgment cannot be treated as a precedent or relied upon to decide the jurisdiction of the AO to issue notice under s. 148 of the Act. The Hon'ble Calcutta High Court has referred to an Office Memorandum dt. 20th Feb., 2023 being F No. 370153/7/2023 TPL which has been dealt with above. Therefore, no reliance can be placed on the said Office Memorandum to justify that the JAO has jurisdiction to issue notice under s. 148 of the Act. Further the Hon'ble Telangana High Court in the case of Kankanala Ravindra Reddy vs. ITO 14 has held that in view of the provisions of s. 151A of the Act r/w the Scheme dt. 29th...

followed the decision in the case of Intrado EC India (P) Ltd. vs. Dy. CIT [IT(TP)A No. 239/Bang/2021]. 2.2 Recently Hon'ble Bombay High Court in the case of Hexaware Technologies Ltd. vs. Asstt. CIT & Ors. (Writ Petn. No. 1778 of 2023) [reported at (2024) 338 CTR (Bom) 536 : (2024) 237 DTR (Bom) 408—Ed.], was dealing with a notice issued under s. 148, without DIN and held as under : "31 As regards issue No. 3, in the notice dt. 27th Aug., 2022 impugned in the petition, admittedly there is no DIN mentioned. It is petitioner's case that the notice is invalid and bad in law in view of the Circular No. 19 of 2019, dt. 14th Aug., 2019 issued by CBDT. A separate intimation letter also dt. 27th Aug., 2022 was issued and the said letter reads as under : . We agree with petitioner that this letter cannot validate the notice issued under s. 148 of the Act on 27th Aug., 2022. The reason is firstly the intimation letter refers to a DIN with respect to some notice under s. 148 of the Act, dt. 26th Aug., 2022. The impugned notice issued to petitioner is dt. 27th Aug., 2022 and not 26th Aug., 2022 for which the DIN is generated. Secondly, the procedure prescribed in Circular No. 19 of 2019, dt....

Operative decision and relief

the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an AO has jurisdiction to assess any person, the question shall be determined by the Principal Director General or Director General or the Principal Chief CIT or Chief CIT or the Principal CIT or CIT; or where the question is one relating to areas within the jurisdiction of different Principal Directors General or Directors General or Principal Chief CITs or Chief CITs or Principal CIT's or CIT's, by the Principal Directors General or Directors General or Principal Chief CIT's or Chief CIT's or Principal CIT's or CIT's concerned or, if they are not in agreement, by the Board or by such Principal Director General or Director General or Principal Chief CIT or Chief CIT or Principal CIT or CIT as the Board may, by notification in the Official Gazette, specify (3) No person shall be entitled to call in question the jurisdiction of an AO— (a) where he has made a return under sub-s. (1) of s. 115WD or under sub-s. (1) of s. 139, after the expiry of one month from the date on which he...

Authorities and precedents appearing in the judgment

• SUNIL CHABLANI vs. COMMISSIONER OF INCOME TAX
• Abdul Azeez Haroon vs. Dy. CIT (International Taxation) (2020) 317 CTR (Mad) 610
• CIT vs. Smt Anjali Dua (2008) 219 CTR (Del) 183
• Daujee Abhushan Bhandar (P) Ltd. vs. Union of India (2022) 325 CTR (All) 659
• Mir Zardari Qureshi vs. Asstt. CIT (2023) 151 taxmann.com 408 (Raipur)
• Saroj Sangwan vs. ITO (2024) 162 taxmann.com 704 (Del)
• Siemen Financial vs. Dy. CIT (2024) 154 taxmann.com 159 (Bom)
• Union of India vs. Ashish Agarwal (2022) 326 CTR (SC) 473
• A) CIT vs. Smt. Anjali Dua (2008) 219 CTR (Del) 183
• B) Mir Zardari Qureshi vs. Asstt. CIT (2023) 151 taxmann.com 408 (Raipur)(Trib) (DC 3-13) held that
• C) Abdul Azeez Haroon vs. Dy. CIT (International Taxation) (2020) 317 CTR (Mad) 610
• D) Saroj Sangwan vs. ITO (2024) 162 taxmann.com 704 (Del) (DC 18-22)

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on the statutory and factual issues recorded above. The operative result is classified as Operative order controls. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with International Tax. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Reconstruct the reassessment timeline: original assessment, section 148A notice/reply, approval authority, notice date and the applicable section 149 limitation window.
• Preserve the complete response to section 148A(b), objections and proof of disposal; jurisdictional defects are often decided from the documentary chronology.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

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