SURAJ DUROBUILD (P) LTD,NEW DELHI vs. ACIT CIORCLE-24(2), NEW DELHI

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ITA 777/DEL/2024Status: DisposedITAT Delhi22 August 2025AY 2012-13Bench: MS. MADHUMITA ROY, JUDICIAL MEMBER, SHRI NAVEEN CHANDRA (Accountant Member)6 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notices u/s 148 and the subsequent assessment were issued without proper jurisdiction, as no order u/s 127 was passed for transferring the case from the ITO to the DCIT. Therefore, the proceedings were deemed void ab initio.

What were the facts?

The assessee's appeal challenges an order related to AY 2012-13. The primary contention is that the assumption of pecuniary jurisdiction by the DCIT/ACIT was illegal because the assessee's returned income was below the threshold specified in CBDT Instructions for such officers.

What were the issues?

Whether the assessment proceedings were vitiated due to improper assumption of pecuniary jurisdiction by the Assessing Officer without a valid transfer order u/s 127.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(3),Section 139,Section 127

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DELHI ‘G’ BENCH,

Before: MS. MADHUMITA ROY, & SHRI NAVEEN CHANDRA

For Appellant: Shri Raj Kumar, CA, Shri Suraj Gupta, Adv
For Respondent: Shri Manish Gupta, Sr. DR
Hearing: 13.08.2025Pronounced: 22.08.2025

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 jurisdiction is illegal and bad in law as the returned income was less than

Page 1 of 6 Act by the DCIT/ACIT which is not sustainable in the eyes of law.

3.

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, jurisdiction 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 jurisdiction would be of DC/AC. Since the declared income in this case is above Rs. 30 lakhs, the assumption of jurisdiction 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 3.YKM Holding vs ACIT 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) 4. Per contra, the ld. DR relied upon the orders of the authorities below. The ld DR relied on the decision of the following:

1.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)

Page 2 of 6 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 jurisdiction 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 jurisdiction 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 jurisdiction 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 Page 3 of 6 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 jurisdiction 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 jurisdiction 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 jurisdiction by way of any order u/s 127 of the Act. Accordingly, there is no valid jurisdictional 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.

Page 4 of 6 initio, we do not dwell into the merits of the case. is allowed.

The order is pronounced in the open court on 22.08.2025.

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