SMT. INDUBALA JAYANT JAIN ,MUMBAI vs. I.T.O WARD, 17(2)(1), MUMBAI

The brief facts of the case are that the assessee had filed the return of income on 28.07.2010 declaring its total income of Rs. 14,15,680/- and the return was proceed u/s 143(1) by the Juri ictional Ld.AO, ITO ward 15(2)(4), Mumbai. The copy of the return and the intimation u/s 143(1) is annexed in ABP page 12 and 13. After receiving the information from AST system of the Income Tax Department. The assessee’s case was reopened u/s 148 by a notice dated 30.03.2017. The assessee primarily filed the letter and requested to accept the 139 return as return u/s 148 of the Act and also the assessee challenged the juri iction of the Ld.AO related to issuance of notice u/s 148 of the Act. The copy of the notices u/s 148 dated 30.03.2017 is reproduced as below:

The letter submitted by the assessee on dated 11.04.2017 by challenging the juri iction of Ld.AO was duly filed before the department on 03.05.2017 is reproduced as under:-

But Ld.AO completed the assessment after addition in different heads total amounting to Rs. 1,01,50,838/-. Aggrieved assessee, filed an appeal before the Ld. CIT(A). But Ld. CIT(A) upheld the impugned order and rejected the appeal of the assessee. Being aggrieved the assessee filed an appeal before us.

The Ld.AR filed a paper book containing page 1 – 44 which is kept in record. The Ld.AR further submitted that the assessee u/s 255(5) in Income Tax Appellate Rule and Regulation, 1963 filed the additional ground related to challenging the juri ictional of the Ld.AO for assessment and for issuance of notice u/s 148 of the Act. The relevant additional grounds are reproduce as below: “01. The notice issued u/s 148 of the I. T. Act, 1961 is ab-initio void, inasmuch as, said notice was not issued by the Officer having territorial juri iction over appellant's case. Consequently, assessment order passed in furtherance of said notice is also ab-initio void, inasmuch as, there is an inherent defect in assumption of juri iction.

The learned Assessing Officer has grossly erred in not disposing off appellant's objection to juri iction in contradiction with the statutory provisions.”

The Ld.AR further argued that the assessee filed the return though in recorded reasons the Ld.AO treated the assessee as non-filer. So there is a basic wrong assumption by Ld.AO in recorded reasons. He further invited our attention in APB page 12 and 13 that the assessee’s case was in juri ictional of income tax officer ward 15(2)(4), Mumbai. Whereas the notice was duly issued by the ITO ward 17(2)(1), Mumbai. After the objection was duly filed before the Ld.AO within one month that is on 11.04.2017, without disposing the same assessment was 5 Smt. Indubala Jayant Jain completed. Ld.AO violated the juri iction u/s 124 of the Act. So, accordingly the entire assessment is bad in law.

The Ld. DR argued and relied on the orders of the revenue authorities.

We have heard the rival submissions and perused the documents available on record. We note that the notice under section 148 of the Act was issued by ITO, Ward 17(2)(1), Mumbai on 30.03.2017. The assessee filed objections on 11.04.2017, which were received by the Ld. AO on 03.05.2017. However, without disposing of the assessee’s objections, the Ld. AO proceeded to pass the impugned assessment order. The assessee has raised an additional ground before this Bench, which is purely a legal ground. Reliance has been placed on the judgment of the Hon’ble Supreme Court in National Thermal Power Co. Ltd. v. CIT [1998] 97 Taxman 358 (SC). In light of the said judgment, the assessee is entitled to raise the legal ground at this stage, and therefore, we proceed to adjudicate the same first. Upon careful consideration, we find merit in the contention that the Ld. AO lacked territorial juri iction over the assessee at the time of issuing the notice under section 148. Any assessment order passed in contravention of section 124 of the Act is void ab initio. Our view is fortified by the decision of the Hon’ble Bombay High Court in Ashok Devichand Jain v. Union of India [2023] 151 taxmann.com 70 (Bom.), wherein it was held that a notice issued under section 148 by a non-juri ictional officer has no validity in the eyes of law and is liable to be set aside.

As we have allowed the appeal of the assessee on the basis of the additional legal ground, the remaining grounds are rendered academic in nature and are left open.

In the result, the appeal of the assessee bearing ITA No.4953/MUM/2024, is allowed. Order pronounced in the open court on 24th November 2025 (VIKRAM SINGH YADAV) JUDICIAL MEMBER Mumbai,िदनांक/Dated: 24/11/2025 Disha Raut, Stenographer

अपीलाथ /The Appellant , 2. ितवादी/ The Respondent. 3. आयकरआयु CIT 4. िवभागीय ितिनिध, आय.अपी.अिध.,मुंबई/DR, ITAT, MUMBAI 5. गाडफाइल/Guard file.