MAHAVIR PUKHRAJ JAIN,MUMBAI vs. THE DCIT, CIRCLE 42(1)(1), MUMBAI, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL
“D” BENCH MUMBAI

BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER &
SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
Mahavir Pukhraj Jain
Flat
No.
603/B,
Manan
Apartment, New Link Road,
Dahisar East, Mumbai –
400068. Vs.
DCIT, Circle – 42(1)(1)
Kautilya
Bhawan,
Aenue -3, Near Videsh
Bhavan, G-Block, BKC
Bandra (E) – 400051
PAN/GIR No. ADEPJ8540R
(Applicant)
(Respondent)

Assessee by Shri Rajesh Shah, CA
Revenue by Shri Annavaran Kosuri, Sr. DR

Date of Hearing
24.07.2025
Date of Pronouncement
13.10.2025

आदेश / ORDER

PER SANDEEP GOSAIN, JM:

The present appeal has been filed by the assessee challenging the impugned order dt. 10.01.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National
Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2013-14. 2. The Ld. AR appearing on behalf of the assessee pressed Ground No. 2 of appeal, as the same is legal in question, wherein the juri iction for issuance of notice

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Mahavir Pukhraj Jain., Mumbai.

u/s 148 of the Act has been challenged. In our view since this ground is purely legal in question and goes to the roots of the case therefore we have also decided to take up this ground firstly.
3. Ground No. 2 raised by the assessee relates to challenging the order of Ld. CIT(A) wherein the juri iction of ITO in recording the ‘reasons for reopening’ u/s 147 of the Act and ‘issuing notice’ u/s 148 of the Act was challenged.
4. In this regard Ld. AR appearing on behalf of the assessee submitted that the ITO has erred in recording the reasons for reopening of the case u/s 147 of the Act and also erred in issuing the notice u/s 148 of the Act dated
30.03.2016 as the ITO did not have valid juri iction over the assessee’s case as per CBDT circular No. 1/2011. 5. However on the contrary Ld. DR while relying upon the orders passed by the AO relied upon the provisions of Sec. 124(3) of the Act and submitted that at this stage assessee cannot be allowed to challenge the juri iction of the AO while passing the order of assessment.
6. We have heard the counsels for both the parties, perused the material placed on record, judgments cited before us and also the orders passed by the revenue authorities. From the records, we noticed that as per the 3
Mahavir Pukhraj Jain., Mumbai.

facts of the present case, ITO recorded reasons for reopening u/s 147 of the Act and issued notice u/s 148 of the Act on 30.03.2016. However, the juri iction in the assessee’s case, as per CBDT instruction No. 01/2011, lay with the Assistant/Deputy Commissioner of Income Tax since the income declared was above Rs. 20 Lakhs. Since the assessee had filed the return of income for Rs.
29,57,760/- on 28.09.2013. The CBDT Instruction No.
01/2011, which are reproduced as under:

Order-Instruction Income Tax
References have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship to the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under:

Income declared
(Mofussil area)
Income Declared
(Metro cities)

ITOs
ACs/DCs
ITOs
ACs/DCs
Corporate
Return
Upto to 20
lacs
Above Rs. 20
lacs
Upto 30 lacs
Above 30
lacs
Non-corporate return
Upto 15 lacs
Above Rs. 15
lacs
Upto Rs. 20
lacs
Above Rs. 20
lacs

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Mahavir Pukhraj Jain., Mumbai.

Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad,
Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011."
7. Regarding this circular the juri iction of the non corporate assessee whose income exceeds 20 lakhs lies with ACIT / DCIT and not with the ITO. Admittedly in the present case assessee had filed his return of income of Rs.
29,57,760/-, hence the juri iction in accordance with the CBDT was with ACIT / DCIT, Circle 32(2), as even the original assessment order in the present case was also passed u/s 143(3) of the Act by DCIT, Circle 32(2) on 26.02.2016. 8. Thereafter, just after
32
days of the original assessment order passed by the DCIT, Circle 32(2), the ITO
32(2)(3) issued noticed u/s 148 of the Act on 30.03.2016. Further the order against the objections and the assessment order was ultimately passed by ACIT/DCIT without issuing a fresh notice u/s 148 of the Act. Hence in our view the ACIT / DCIT had not acquired juri iction to reassess the income of the assessee. In this regard reliance is being placed upon the decision in the case of Y.
Maharaja Pratap Singh Bahadur 41 ITR 421(SC) & CIT
Vs. Robert 48 ITR 177 (SC).

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Mahavir Pukhraj Jain., Mumbai.

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Mahavir Pukhraj Jain., Mumbai.

present case the assessee has raised the issue of pecuniary juri iction, other than territorial juri iction. Thus, in this regard reliance is being placed by us on the decision of Juri ictional Hon’ble Bombay High Court in the case of Mr. Peter Vax Vs CIT in Tax Appeal No. 19, 21 to 25 of 2017, wherein it was held as under:
44. The ITAT with respect has misconstrued the provisions of Section 124 of the IT Act. Sections 120 to 124 of the IT Act no doubt refer to the juri iction of the Income Tax Authorities.
However, from the scheme of these provisions, it is apparent that reference is to the territorial juri iction of the authorities.
Section 124(1) refers to direction or order issued under Section 120 vesting with juri iction in the Assessing Officer over any area, limits of an area, etc. Section 124(2) provides that where a question arises under this Section as to whether the Assessing Officer has juri iction to assess any person, the question will have to be determined by the authorities specified which will include, in a given case the Board. Section 124(3) then provides that no person shall be entitled to call in question the juri iction of an Assessing Officer, where an action has been taken under Section 132 or 132A after the expiry of one month from the date on which he was served with a notice under Section 153C or after the completion of the assessment, whichever is earlier. Now, this provision refers to mainly the territorial juri iction of the Assessing Officer. This provision cannot be interpreted to mean that an assessee is left without a remedy where the Assessing Officer invokes the provisions of Section 153C of the IT Act without fulfillment of the juri ictional parameters prescribed therein.
12. After having gone through the entire facts and circumstances and legal prepositions as discussed by us above, we are of the view that the issue of validity juri iction is a condition precedent to the validity of any 8
Mahavir Pukhraj Jain., Mumbai.

assessment u/s 147 of the Act. Therefore in our view the ITO, who issued the notice u/s 148 of the Act had no juri iction to issue such notice, thus the same is bad in law. The notice u/s 148 is juri ictional notice and therefore any inherent defect, therein is not curable.
Therefore, the assessment made in pursuant to such notice is bad in law as has been held by the Coordinate Bench of ITAT Delhi in the case of Indus Valley Investment and Finance Pvt Ld., (supra). Therefore taking into consideration the entire facts and circumstances of the present case since the initial notice issued u/s 148 of the Act was by a non juri ictional ITO and the reassessment has been made by ACIT, who has never issued notice u/s 148 of the Act, thus does not acquire juri iction.
13. Therefore considering the entire facts and circumstances as discussed by us above, we have no hesitation to quash the reassessment proceedings. Since there was no valid notice pursuant to which the reassessment proceeding was made in the present case.
Accordingly, this ground raised by the assessee stands allowed.
14. Since we have allowed ground No. 2 and quashed the proceedings therefore there is no need to adjudicate other grounds raised by the assessee and the same are kept open.

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Mahavir Pukhraj Jain., Mumbai.

Order pronounced in the open court on 13.10.2025 (GIRISH AGRAWAL) (SANDEEP GOSAIN)
ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated 13/10/2025

KRK, PS

आदेश की ितिलिप अेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. थ / The Respondent.
3. संबंिधत आयकर आयु / The CIT(A)
4. आयकर आयु(अपील) / Concerned CIT
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण,मुबई/ DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदेशानुसार/BY ORDER,
सािपत ित ////