SAGAR SHANTARAM BIDWAY,THANE vs. ITO, INT TAX WARD 1(2)(1), MUMBAI

The grounds of appeal raised by the assessee are as under: “1. On the facts and circumstances of the case and in law, the ITO, Ward 2(2), Kalyan was not having the jurisdiction over the assessee as he was a non-resident during the year under consideration and, therefore, he has erred in passing the order u/s. 148A(d) and also issuing the notice u/s. 148.

At the outset, the learned counsel for the assessee (Ld. AR) submitted that the impugned order passed by ITO Ward 1(2)(1), Mumbai, cannot be sustained in the eyes of law, as it was passed on the foundation of a notice u/s 148 issued by non-jurisdictional Assessing Officer. It is submitted that the ITO, Ward 2(2), Kalyan, who had passed the order under Section 148A(d) dated 09.03.2024 and also issued the notice under Section 148 of the Act on the same date, was not having the jurisdiction over the case of the assessee, being a non-resident during the year under consideration. Therefore, he has erred in passing the order under Section 148A(d) of the Act and also issuing the notice under Section 148 of the Act. Copies of the order under Section 148A(d) and the notice under Section 148 have been furnished before us.

It is submitted that, in response to the proceedings under Section 148A of the Act, that the assessee has furnished a response dt 27.01.2024 before the ld.AO that he was an NRI for the last 10 years and now lives in Dubai thathe only had purchased a property, some shares and has interest on an FD. Rather, the assessee does not have any taxable income in India. Ld. AO noted the response of assessee in his order u/s 148A(d) dated 09.03.2024, but rejected such submissions by stating that in absence of documentary proof the contention of the assessee was not acceptable. Finally, the assessment was completed by Income Tax Officer, Ward 1(2)(1), Mumbai, under Section 147(3) r.w.s. 144C(13) of the Act.

Ld. learned counsel relied on the decision of Hon’ble Mumbai High Court in the case of Nimir Kishore Mehta Vs. Assistant CIT (2024) 161 taxmann.com 553 (Bom), wherein the Hon’ble High Court held that, where assessee was a non-resident Indian, jurisdiction would lie with the Income Tax Officer (International Taxation); the Assessing Officer other that ITO (IT) had no jurisdiction to issue notice under Section 148A(b). The Ld. AR further placed reliance on the decision of ITAT Mumbai in the case of Sanand Shankardas Vs. ITO in ITA No. 1102/Mum/2025 dated 27.06.2025, wherein under identical facts and circumstances, it was held that the ld. AO, who had issued the notice under Section 148 of the Act did not have jurisdiction over the case of the assessee. Therefore, the issuance of the show cause notice under Section 148A(b) of the Act, the passing of the order under Section 148A(d) of the Act, and the subsequent issuance of the notice under Section 148 of the Act by the AO are held to be carried out without jurisdiction over the matter. The said proceedings are bad in law and accordingly liable to be quashed.

Per contra, the Ld. DR supported the impugned order of the AO.

In the present case the notice u/s 148 was issued by the ITO, Ward 2(2), Kalyan, not having jurisdiction, but finally the impugned order u/s 147 r.w.s. 144C(13) of the Act dated 26.12.2025 was passed by the Income Tax Officer, Int Tax Ward 1(2)(1), Mumbai, the authorities had jurisdiction over the case of assessee. It is not the case where the AO was not aware that the assessee is a non-resident, this fact further fortifies, as the impugned assessment was completed considering the status of assessee as ‘Non-Resident’, thus the judgment of the Hon’ble Bombay High Court in the case of Nimir Kishore Mehta (supra) squarely applies to the facts of the present case, where Hon’ble Court had categorically noted that “In fact the intimation u/s 143(1) of the act issued to the assessee shows the residential status as ‘non-resident’, therefore, we would not hesitate to observe that the stand taken by the AO is a dishonest stand”. In view of such findings by the Hon’ble Jurisdictional High Court, we find that, once the AO had knowledge of assessee’s status being a ‘Non- resident’, the proceedings ought to have been initiated and conducted by the correct jurisdictional officer. Since the officers who had initiated the proceedings of reopening assessment u/s 148A, was not the jurisdictional officer having jurisdiction over the case of the assessee. Therefore, such proceedings are liable to be set aside, and the assessment order passed under Section 147 read with Section 144C(13),consequent to such invalid initiation of proceedings would be liable to be quashed. We direct to do so.

The preliminary ground of appeal raised by the assessee challenging the validity of the jurisdiction of the Assessing Officer is thus allowed. Any other contention of the assessee, therefore, have been rendered academic,so need not be adjudicated.

Resultantly, the appeal of the assessee stands allowed in the above terms.