Adarsh Rice Mill Vs ITO (ITAT Raipur)
Income Tax Appellate Tribunal (ITAT) Raipur ruled in favor of Adarsh Rice Mill in an appeal challenging the legality of a reassessment order for the Assessment Year 2011–12. The assessee contested the order passed under Section 143(3) read with Section 147 of the Income-tax Act, 1961 by the Income Tax Officer (ITO)-1(1), Raipur. The primary contention was that the assessment was initiated on the basis of a notice under Section 148 issued by ITO-1(3), who lacked jurisdiction over the case. The assessee argued that this jurisdictional defect rendered the reassessment void. The ITAT upheld this contention, citing the Supreme Court’s decision in National Thermal Power Company Ltd. vs. CIT, which permits raising legal issues for the first time before the Tribunal when no further factual verification is required.
The Tribunal held that the reassessment order dated 30.12.2018 could not be sustained because it was based on a notice issued by an officer who did not have lawful authority over the assessee at the time. Accordingly, the ITAT quashed the reassessment on jurisdictional grounds without examining the merits of the other issues raised—such as the alleged bogus purchases from Goyal Jute Udyog and the estimated disallowance of 25% amounting to ₹1,89,700. These issues were left open for further examination if required. The appeal was allowed solely on the basis of invalid jurisdiction, effectively nullifying the earlier assessment order without adjudicating the substantive tax-related contentions. The order was pronounced in open court on 29th November 2022.
