SURAJ DUROBUILD (P) LTD,NEW DELHI vs. ACIT CIORCLE-24(2), NEW DELHI
Before: MS. MADHUMITA ROY, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, A.M:-
This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 20.12.2023 for A.Y 2012-13. 2. The assessee ‘s main argument is that the assumption of pecuniary juri iction is illegal and bad in law as the returned income was less than [A.Y. 2012-13]
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Rs. 30 lakhs and notice was issued and assessment framed u/s 148 of the Act by the DCIT/ACIT which is not sustainable in the eyes of law.
At the very outset of the opening of the arguments, the ld. counsel for the assessee submitted that as per CBDT Instructions No. 1 of 2011 dated 31.01.2011, juri iction for assessment vested with the Income tax Officer upto Rs. 20 lakhs and where income declared returned by a non-corporate assessee was above Rs. 20 lakhs, the pecuniary juri iction would be of DC/AC. Since the declared income in this case is above Rs. 30 lakhs, the assumption of juri iction is invalid and hence the whole proceedings are illegal and unsustainable in law. The ld. counsel for the assessee relied upon the following judgements in support of his contentions: 1.Ashok Devichand Jain Vs. UOI 452 ITR 43 (Bom.) [2023] 2.M/s Boutique International Pvt. Ltd., Vs. ITO In ITA No. 831/DEL/2017 3.YKM Holding vs ACIT ITA No. ITA No. 1020/Del/2019 Dtd. 29.04.24 4.M/s Monarch & Qureshi Builders Vs. ACIT ITA No.2026/Mum/2023 Dtd.21.12.23 5.Sharda Export-A.Y.06-07 ITA No. 39/DDN/2022 Dtd. 15.09.23 6.Shyam Sunder Khandelwal Vs ACIT 161 Taxmann.com 255 (Raj)
Per contra, the ld. DR relied upon the orders of the authorities below. The ld DR relied on the decision of the following:
Abhishek Jain V ITO (2018) 94 taxmann.com 355(Del) 2.Advantage Strategic Consultancy P Ltd (2021)124taxmann.com 511(Mad) 3.Ravneet Takhar V CIT (2017) 84 taxmann.com 299(SC) [A.Y. 2012-13] M/s Suraj Durobuild Pvt Ltd
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We have heard the rival submissions and have perused the relevant material on record. We find that Income tax return for AY 2012-13 was filed on 30.09.2012 u/s 139 of the Act at Rs. 10,71,331/- which is less than Rs. 30 lakhs. As per the Instruction no 1/2011, the correct pecuniary juri iction of cases of Return below 20 lakh in Mofussail areas and Rs 30 lakh in Metro cities, lies with the ITO. We find that the notices u/s 148 dated 10.10.2014 was issued by DCIT Cir.9(1), New Delhi and the notice u/s 148 dated 13.05.2015 were issued by the DCIT Cir. 24(2), New Delhi. The reasons recorded for reopening is recorded by the DCIT Cir.9(1), New Delhi and the assessment u/s 143(3) r.w.147 is made by DCI Cir 24(2), New Delhi. The ld AR had stated that on a query raised under RTI Act to PIO, ITO Ward 24(1), Delhi with regard to any order being issued for transferring the juri iction from the ITO or DCIT Cir 9(1) to DCIT Cir. 24(2), New Delhi, it was found that no order u/s 127 was available on the file. 6. On a query from the Bench, the ld DR produced an explanation from the AO that a subsequent circular dated 08.04.2011, the CIT was empowered to adjust the monetary limit depending on the work load. The AO further explained that the juri iction as per the alphabetical name of the assessee vests with the Cir 24(2). The ld DR however, could controvert that there does not exist any order u/s 127 for transferring [A.Y. 2012-13] M/s Suraj Durobuild Pvt Ltd
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the file from an ITO, with whom the pecuniary juri iction lies, to the DCIT Cir 9(1) or DCIT Cir 24(2).
7. We have been told about the subsequent Instruction no 6/2011
dated 8.4.2011 empowering the CIT to adjust the monetary limit for the ITO/DCITs. The ld AR, however submitted that the said Instruction does allow monetary adjustment but the same is limited to adjust the limits by an amount of 5 lakh and since the assessee’s return was only of Rs 10
lakh, even after the said Instruction is applied, the pecuniary juri iction would not change from ITO to DCIT. We also find that the neither the AO nor the Ld DR could controvert the fact that no order u/s 127 was passed for transferring the juri iction from ITO to the DCIT. In the above factual matrix, we are of the considered opinion that the notice u/s 148 of the Act as well as the assessment, which has been issued/completed by the DCIT, has been done without assuming proper juri iction by way of any order u/s 127 of the Act. Accordingly, there is no valid juri ictional notice u/s 148 which makes the whole proceedings illegal, unsustainable in law and void ab initio. We are fortified in our view by the Hon’ble Bombay High Court in the case of Ashok Devichand Jain Vs. UOI (supra) which dealt with an identical facts. Ground no 2 raised on this count is allowed.
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Since we have held the assessment proceedings to be void ab initio, we do not dwell into the merits of the case. 7. In the result, the appeal of the assessee in ITA No. 777/DEL/2024 is allowed. The order is pronounced in the open court on 22.08.2025. [MADHUMITA ROY]
[NAVEEN CHANDRA]
JUDICIAL MEMBER
ACCOUNTANT MEMBER
Dated: 22nd AUGUST, 2025. VL/