ASSISSTANT COMMISSIONER OF INCOME TAX, MUMBAI vs. INDU MAHENDRA SHAH, MUMBAI

ITA 1716/MUM/2025Status: DisposedITAT Mumbai23 September 2026AY 2012-138 pages
AI SummaryRemanded

What were the facts?

The Revenue appealed the NFAC's order dated 18.01.2025 for AY 2012-13. The AO had made additions of Rs. 24,55,812/- and Rs. 17,66,78,529/- under section 69A as unexplained money, representing sale proceeds of shares. The Ld. Commissioner deleted these additions on merits but upheld the validity of reassessment proceedings. The Revenue appealed the deletion on merits. During the appeal, the Assessee filed an application under Rule 27 challenging the jurisdiction of the ACIT who issued the notice under section 148, citing CBDT Instruction No. 1/2011 and the Bombay High Court judgment in Ashok Devichand Jain.

What did the Tribunal hold?

The Tribunal admitted the Assessee's legal ground under Rule 27, following the Supreme Court's decision in National Thermal Power Co. Ltd. Vs. CIT. The Tribunal noted that the notice under section 148 was issued by the ACIT-20(1), Mumbai, and subsequently, the Assessee requested a transfer to ITO-20(1)(5), Mumbai, due to returned income below Rs. 20 lakhs, which was granted, and the assessment order was passed by the ITO. However, the Tribunal observed that neither party had provided complete jurisdictional records, including assignment or transfer orders, to definitively establish whether the ACIT-20(1), Mumbai, was vested with jurisdiction on the date of the notice. Adjudicating this jurisdictional issue required factual verification of relevant orders under sections 120 and 127 of the Act. In the absence of complete primary records, the Tribunal could not make a conclusive finding. Therefore, the impugned order was set aside, and the case was remanded to the Ld. Commissioner for a decision on the jurisdictional ground first. The Ld. Commissioner was directed to examine jurisdictional records, including orders under section 120 and 127, the jurisdictional history, and records of the subsequent transfer. The grounds raised by the Revenue on merits were left open for adjudication by the Ld. Commissioner after deciding the jurisdictional issue.

What were the issues?

1. Whether the notice issued under section 148 of the Income Tax Act, 1961 (the Act) by the ACIT-20(1), Mumbai, was without jurisdiction, considering CBDT Instruction No. 1/2011 and the Assessee's returned income. Assessee's contention: The Assessee argued that the notice under section 148 was issued by an officer without jurisdiction. Relying on CBDT Instruction No. 1/2011, the Assessee contended that for non-corporate assessees with declared income up to Rs. 20 lakhs, the jurisdiction lies with the ITO, and above Rs. 20 lakhs, it lies with the DC/AC. The Assessee's returned income was Rs. 8,55,820/-, thus the jurisdiction should have been with the ITO. The Assessee relied on Ashok Devichand Jain Vs. Income Tax Officer, [2023] 452 ITR 43 (Bom.). Revenue's contention: The Revenue objected to the Assessee's ground, relying on section 124(3) of the Act. The Revenue argued that the Assessee could not question the AO's jurisdiction after the expiry of the prescribed period or after the completion of assessment. The Revenue further submitted that the Assessee had not challenged the AO's jurisdiction before the completion of assessment and had even requested a transfer of the case to ITO-20(1)(5), Mumbai, based on returned income below Rs. 20 lakhs, which was acceded to.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 69A,Section 250,Section 148,Section 124(3),Section 120,Section 127

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLENARENDER KUMAR CHOUDHRY & HON’BLE ARUN KHODPIA

Pronounced: 23.09.2026

PER: NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER :

This appeal has been preferred by the Revenue against the order dated 18.01.2025, impugned herein, passed by the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short, “Ld. Commissioner”) u/s 250 of the Income Tax Act, 1961 (in short, “the Act”), for the A.Y. 2012-13. 1 Indu Mahendra Shah

2.

Brief facts relevant for adjudication of the instant appeal are that the Assessing

The order continues below.

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