Chinmoy Mondal Vs ACIT (ITAT Kolkata)
ACIT Playing in ITO’s Playground? Reassessment Sent Back for Being ‘Overqualified’- ITAT Kolkata Quashes Reassessment for Wrong Officer Issuing Notice – Jurisdictional Defect is Fatal
Assessee had originally filed return declaring income of ₹14,09,760/- for AY 2014-15, & the original assessment u/s 143(3) accepted the returned income. Later, the case was reopened u/s 147 by issuing notice u/s 148 on 27.07.2022. The crucial fact was that this notice was issued by the ACIT, Circle-1, Burdwan, & the reassessment order u/s 147/144 was also passed by the ACIT, despite the returned income being only ₹14.09 lakh.
Assessee argued that as per CBDT Instruction No. 1/2011 dated 31.01.2011, in non-corporate cases, if income is up to ₹15 lakh (mofussil areas) or up to ₹20 lakh (metro cities), jurisdiction lies with the ITO, & only where income exceeds such limit can the AC/DC assume jurisdiction. Therefore, ACIT was not the correct authority to issue notice u/s 148 or to complete the assessment. This made the entire proceeding void ab initio. To support this, reliance was placed on the Bombay High Court judgment in Ashok Devichand Jain v. UOI (2023) 452 ITR 43, where the Court held that a notice u/s 148 issued by an officer lacking jurisdiction is invalid & incurable, & such reassessment must be quashed. The High Court clarified that jurisdictional defect is not a mere irregularity, & even administrative inconvenience cannot justify bypassing CBDT instructions.
Department argued that the issue was not raised before lower authorities & suggested remand. However, the Tribunal observed that jurisdiction goes to the root & can be raised at any stage, & since CBDT instructions are binding under section 119, any violation thereof renders the assessment illegal.
Tribunal noted that Assessee’s returned income being only ₹14.09 lakh, only the ITO had jurisdiction, & ACIT had no authority to issue notice u/s 148 or frame reassessment. Therefore, the notice & the reassessment order were held invalid & without authority of law. Accordingly, ITAT quashed the reassessment in entirety for lack of inherent jurisdiction, following the binding Bombay High Court decision. The appeal of Assessee was allowed in full.
