Case Law Details
Ashok Devichand Jain Vs Union of India and Others (Bombay High Court)
The Bombay High Court allowed a petition challenging a notice dated 30 March 2019 issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2012-13, as well as the order dated 18 November 2019 rejecting the petitioner’s objections to the reopening of assessment.
The principal issue raised by the petitioner was that the Income Tax Officer (ITO) who issued the notice under Section 148 lacked jurisdiction. The petitioner relied on CBDT Instruction No. 1/2011 dated 31 January 2011, which provides that where a non-corporate assessee has returned income exceeding ₹20 lakh, jurisdiction lies with the Deputy Commissioner or Assistant Commissioner and not with the Income Tax Officer.
The petitioner had declared income of approximately ₹64.34 lakh and therefore contended that the jurisdiction vested with the DC/AC. Consequently, the notice issued by the ITO was alleged to be without authority in law.
The Court considered the affidavit filed by the concerned ITO, who admitted that the notice had been issued despite the jurisdictional defect. The officer explained that the petitioner’s PAN remained with the ITO’s ward and that insufficient time was available before 31 March 2019 to migrate the PAN to the jurisdictional DCIT after obtaining the necessary administrative approvals.
The High Court held that a notice issued under Section 148 is a jurisdictional notice and any inherent defect in such notice is not curable. Since the notice had been issued by an officer who did not have jurisdiction over the petitioner, the notice was not validly issued and lacked legal authority.
Accordingly, the Court set aside the notice dated 30 March 2019. As a consequence, the order dated 18 November 2019 rejecting the petitioner’s objections was also quashed and set aside. The petition was disposed of without any order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Petitioner is impugning a notice dated 30th March, 2019 issued under section 148 of the Income Tax Act, 1961 (the Act) for A.Y. 2012-13 and order passed on 18th November, 2019 rejecting Petitioner’s objection to reopening on various grounds.
2. The primary ground that has been raised is that the Income Tax Officer who issued the notice under section 148 of the Act, had no jurisdiction to issue such notice. According to Petitioner as per instruction No. 1/2011 dated 31st January, 2011 issued by the Central Board of Direct Taxes, where income declared/returned by any Non-Corporate assessee is up to Rs. 20 lakhs, then the jurisdiction will be of ITO and where the income declared returned by a Non Corporate assessee is above Rs. 20 lakhs, the jurisdiction will be of DC/AC.
3. Petitioner has filed return of income of about Rs. 64,34,663/-and therefore, the jurisdiction will be that of DC/AC and not ITO. Mr. Jain submitted that since notice under section 148 of the Act has been issued by ITO, and not by DC/AC that is by a person who did not have any jurisdiction over Petitioner, such notice was bad on the count of having been issued by an officer who had no authority in law to issue such notice.
4. We have considered the affidavit in reply of one Mr. Suresh G. Kamble, ITO who had issued the notice under section 148 of the Act. Said Mr. Kamble, ITO, Ward 12(3)(1), Mumbai admits that such a defective notice has been issued but according to him, PAN of Petitioner was lying with ITO Ward (12)(3)(1), Mumbai and it was not feasible to migrate the PAN having returned of income exceeding Rs. 30 lakhs to the charge of DCIT, Circle 12(3)(1), Mumbai, as the time available with the ITO 12(3)(1) was too short to migrate the PAN after obtaining administrative approval from the higher authorities by 31st March, 2019.
5. The notice under section 148 of the Act is jurisdictional notice and any inherent defect therein is not curable. In the facts of the case, notice having been issued by an officer who had no jurisdiction over the Petitioner, such notice in our view, has not been issued validly and is issued without authority in law.
6. In the circumstances, we have no hesitation in setting aside the notice dated 30th March, 2019.
7. Consequently the order dated 18th November, 2019 rejecting Petitioner’s objection is also quashed and set aside.
8. Petition disposed.
9. No order as to costs.
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