PUNEET NAYAR,NEW DELHI vs. ITO WARD 70(1), NEW DELHI

The assessee has raised five grounds of appeal. He has also filed an application for admission of additional grounds as follows: (6) On the facts and circumstances of the case the notice issued u/s 143(2) by the Ld.ACIT is bad in law in the absence of pecuniary juri iction as provided in CBDT Instruction No 1/11, dated 31.1.2011 and the assessment completed by ITO ward 70(1) on the basis of un- juri ictional notice is also bad in law. 4. Admittedly, this issue was never raised before the lower authorities. But since the challenge to the juri iction of the Assessing Officer goes to the root of the matter, in light of the ratio laid down by the Hon'ble Supreme Court in the case of NTPC 229 ITR 383, the same deserves to be admitted and adjudicated. Accordingly, the additional plea raised for the first time is admitted, since it requires no verification of facts and the facts are very much in the body of the assessment order in the first page itself. 5. The facts of the instant case is that the assessee is an individual and has filed return of income on 04.08.2017 at total income of Rs.17,05,033/- and the assessment was completed on 06.12.2018 at a total income of Rs.70,81,033/- by ITO ward 70(1), New Delhi. The notice u/s 143(2) of the Income Tax Act, 1961 dated 17.08.2018 was issued by [A.Y. 2017-18] Puneet Nayar

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, juri iction for assessment vested, in metro cities, 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 juri iction would be of DC/ACIT. Since the declared income in this case is Rs. 17.05 lakh, the assumption of juri iction by ACIT Cir 66(1), Delhi for issuance of notice u/s 143(2) is invalid and hence the whole proceedings are illegal and unsustainable in law. The ld. counsel for the assessee relied upon the following judgement in support of his contentions: 1. Capital Boradways [P] Ltd Vs ITO 301 Taxmann.com 506 (DEL) [A.Y. 2017-18] Puneet Nayar

Per contra, the ld. DR referred to a subsequent CBDT’s Instruction no 6/2011 dated 8.4.2011 empowering the CIT to adjust the monetary limit for the ITO/DCITs in his charge. The ld DR, submitted that the said Instruction allows monetary adjustment limited to an amount of 5 lakh according to the work load of the officers. The ld DR stated that since the assessee’s return was only of Rs 17.05 lakh, after the said Instruction is applied, the pecuniary juri iction would change from ITO to DCIT. The ld DR therefore emphasized that the notice u/s 143(2) was therefore correctly issued by the ACIT Cir 66(1). 9. We have heard the rival submissions and have perused the relevant material on record. We find that Income tax return for AY 2017-18 was filed on 04.08.2017 at Rs. 17,05,033/- which is less than Rs. 20 lakhs. As per the Instruction no 1/2011, ordinarily the pecuniary juri iction of cases of Return below 20 lakh in Metro cities, lies with the ITO. We find however, that the CBDT through subsequent Instruction allowed adjustment of monetary limit by Rs 5 lakh in a PCIT charge according to the work load of the officers under him. We therefore find no violation of CBDT Instruction when the notice u/s 143(2) dated 17.08.2018 was issued by ACIT, Circle 66(1), New Delhi and assessment being framed by the ITO,70(1), Delhi. The additional ground is dismissed. [A.Y. 2017-18] Puneet Nayar

We however find that the both the lower authorities have passed the order ex-parte. We find that the AO has passed order u/s 144 without any compliance from the assessee. Even before the CIT(A), there was no participation from the assessee. We are of the considered view that in the above factual matrix, the CIT(A) should have given adequate opportunity of being heard to the assessee. Accordingly, in the interest of justice and fair play, we restore the issues to the file of the ld. CIT(A) for adjudication of issues afresh. The assessee is directed to furnish the necessary documents for verification and the ld. CIT(A) is directed to examine the same and decide the issues as per the provisions of law after affording reasonable and sufficient opportunity of being heard to the assessee. 11. In the result, the appeal of the assessee in ITA No. 3432/DEL/2024 is allowed for statistical purposes. The order is pronounced in the open court on 19.09.2025. [MADHUMITA ROY]