ITO Vs Raj Trimurti Infraprojects Private Limited (ITAT Kolkata)
Returned Income Above ₹30 Lakh? ITO Has No Power – Assessment Must Go to AC/DC-ITAT Kolkata Declares Assessment Void for Lack of Jurisdiction
Assessee filed a revised return declaring a total income of ₹2.15 crore for AY 2017-18. The case was selected for scrutiny, & notice u/s 143(2) was issued by the ITO, Ward 2(3), Kolkata. The assessment was also framed by the same ITO. Assessee, in its Cross Objection, raised a legal ground that the ITO did not possess inherent jurisdiction to issue notice or to complete the assessment because of the monetary limits prescribed by CBDT Instruction No. 1/2011 dated 31.01.2011. As per this binding instruction, in metro cities like Kolkata, where the returned income exceeds ₹30 lakh, the assessment must be framed by the AC/DC (Assistant Commissioner or Deputy Commissioner) & not by an Income Tax Officer. Therefore, once Assessee declared income of more than ₹30 lakh, the ITO automatically lacked jurisdiction.
Tribunal observed that jurisdiction is not a procedural irregularity but goes to the root of the validity of the entire assessment. CBDT instructions issued u/s 119 are binding on the Department, & any assessment made in violation of such instructions suffers from lack of inherent jurisdiction & becomes null & void. Tribunal also noted that this issue is no longer res integra because in the case of Raghvendra Mohta v. ACIT (ITA 2416/KOL/2017), a similar assessment was quashed on identical grounds. More importantly, the Calcutta High Court in PCIT v. Raghvendra Mohta (ITAT/51/2025) has affirmed the Tribunal’s view & categorically held that when the returned income exceeds the monetary threshold, the ITO has no authority to act, & the entire proceedings stand vitiated. The High Court also referred to the Tribunal’s earlier decision in Bhagyalaxmi Conclave Pvt. Ltd., which was upheld by the Court in 2022 (12) TMI 1514. Applying the above legal position, Tribunal held that the ITO in the present case had no jurisdiction since the income declared exceeded ₹30 lakh. Consequently, the notice u/s 143(2) & the assessment order u/s 143(3) were void ab initio. Therefore, Tribunal allowed Ground No.1 of Assessee’s Cross Objection & quashed the entire assessment on the ground of lack of inherent jurisdiction. Since the assessment itself was declared invalid, the Tribunal did not examine the other grounds raised byAssessee & kept them open.
