Case Law Details
ITO Vs Christi Jain (ITAT Raipur)
When AO Has No Jurisdiction, Assessment Dies at Birth – ITAT Raipur- Jurisdictional Defect Cannot Be Waived: ITAT Follows Supreme Court in Quashing Reassessment
Background
- AO’s Action: Reassessment order passed u/s 144 r.w.s. 147 on 30.12.2018 by ITO-3(1), Raipur.
- AO himself noted that jurisdiction lay with ITO-68(1), New Delhi & proposal u/s 127 for transfer was initiated, but he still completed assessment.
CIT(A) Findings
- Held that AO lacked territorial jurisdiction.
- Assessee had objected to jurisdiction through multiple letters.
- Hence, order passed by AO was invalid.
Revenue’s Appeal
- Claimed assessee did not raise objection within one month as per sec. 124(3).
- Argued CIT(A) erred in annulling assessment.
ITAT’s Observations
- AO himself admitted jurisdiction belonged to ITO-68(1), New Delhi.
- Assessee had objected from the beginning.
- Relied on SC rulings:
DCIT (E) Vs. Kalinga Institute of Industrial Technology (2023) – jurisdictional defect not curable.
Union of India Vs. Rajeev Bansal (2024, SC) – order without jurisdiction is nullity.
Kelvinator of India Ltd. – reassessment powers limited to statutory preconditions.
Principle: Jurisdictional defect cannot be waived; any order without jurisdiction is void ab initio.
Decision
- ITAT upheld CIT(A)’s order.
- Reassessment u/s 147/144 by ITO-3(1), Raipur quashed as without jurisdiction.
- Revenue’s appeal dismissed.
- Assessee’s relief sustained.
When AO lacks territorial jurisdiction, reassessment order is void ab initio. Jurisdictional defect goes to the root & cannot be waived, even if objections are delayed.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
The present appeal preferred by the revenue emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 05.05.2025 for the assessment year 2011-12 as per the grounds of appeal on record.
2. In this case, the assessee has assailed the validity of assessment order passed u/s. 144 r.w.s. 147 of the Income Tax Act, 1961 ( for short ‘the Act’) for A.Y.2011-12, dated 30.12.2018 challenging the territorial jurisdiction of the A.O having passed the said order. In fact, the A.O in his order at Para 2 mentioned that proposal dated 18.06.2018 u/s. 127 of the Act was initiated for transferring of the case to ITO-68(1), New Delhi as territorial jurisdiction lies with his charge and the PAN of the assessee was also entered into the ITBA portal to transfer PAN to ITO-68(1), New Delhi. Therefore, the A.O had also acknowledged the fact while framing assessment that he lacks inherent jurisdiction to pass such order in the case of the assessee. However, he still went on to complete assessment u/s. 144 r.w.s. 147 of the Act. Thereafter, as correctly examined by the Ld. CIT(Appeals)/NFAC, wherein he writes that there is no denying the fact that the A.O issuing notice u/s. 148 of the Act in the case of the assessee did not have the territorial jurisdiction over the assessee.
3. Another pertinent point which emanates from the observation of the Ld. CIT(Appeals)/NFAC that the A.O was incorrect in observing in the remand report that the assessee did not raise objection over jurisdiction issue before the A.O within one month from the date of service of notice u/s. 148 of the Act, hence, the assessee was prevented by Section 124(3) of the Act to agitate on the issue, following the principles as laid down by the Hon’ble Supreme Court in the case of DCIT (Exemption) & Ors. Vs. Kalinga Institute of Industrial Technology (2023) 151 taxmann.com 434 (SC). As a matter of fact, the assessee had written various letters to the A.O which are placed on record by way of annexures and had been made part of the order of the Ld. CIT(Appeals)/NFAC which is therefore, not again extracted herein for the sake of brevity and the same clearly signifies that the assessee had objected to the territorial jurisdiction of the A.O i.e. ITO-3(2), Raipur in framing assessment right from the very beginning when the assessment proceedings were initiated. It has been held by the Hon’ble Supreme Court in its recent order passed in the case of Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) that the order passed without jurisdiction is nullity. It was further observed that if a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. Elaborating further, the Hon’ble Apex Court had observed that any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid. Apart from that, it was observed that as there cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment, therefore, any consequential order passed or action taken will be invalid and without jurisdiction. For the sake of clarity, the observations of the Hon’ble Apex Court are culled out as under:
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30. If a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. (Dr. Ramachandran Keezhoth Vs. Chancellor, Kannur University). Further, when a statute vests certain power in an authority to be exercised in a particular manner, then that authority has to exercise its power following the prescribed manner (CIT Vs. Anjum M.H. Ghaswala; State of Uttar Pradesh Vs. Singhara Singh). Any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid………….
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32. A statutory authority may lack jurisdiction if it does not fulfil the preliminary conditions laid down under the statute, which are necessary to the exercise of its jurisdiction. (Chhotobhai Jethabhai Patel and Co. V. Industrial Court, Maharashtra Nagpur Bench). There cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment. (Superintendent of Taxes Vs. Onkarmal Nathmal Trust). An order passed without jurisdiction is a nullity. Any consequential order passed or action taken will also be invalid and without jurisdiction. (Dwarka Prasad Agrawal V. B.D. Agrawal). Thus, the power of assessing officers to reassess is limited and based on the fulfilment of certain preconditions. (CIT Vs. Kelvinator of India Ltd.)”
4. That on examination of the aforesaid facts and circumstances and the judicial pronouncement, we do not find any infirmity with the findings of the Ld. CIT(Appeals)/NFAC which is hereby upheld.
5. As per the above terms grounds of appeal raised by the revenue are dismissed.
6. In the result, appeal of the revenue is dismissed.
Order pronounced in the open court on 10th day of September, 2025.
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