Inamul Haq Vs ITO (ITAT Delhi)
ITAT Delhi delivers a two-fold relief – quashes reassessment as void for lack of jurisdiction & grants full Section 54F exemption even where houses are constructed in son’s name
Assessee was a retired government pensioner who filed his return declaring a small income. Subsequently, Dept received information that he had sold an immovable property for ₹41.57 lakh (with stamp duty valuation of ₹51.73 lakh u/s 50C). Since no capital gain was offered in the original return, the case was reopened u/s 148. Importantly, the notice u/s 148 was issued by ITO, Ward-3, Saharanpur who also conducted the reassessment proceedings. However, without any transfer of jurisdiction or communication, the final reassessment order u/s 147 r.w.s. 143(3) was passed by ITO, Ward-2, Saharanpur. Assessee challenged this before the Tribunal through additional legal grounds, contending that the officer who completed the assessment had no jurisdiction, making the assessment order illegal.
Tribunal examined the records & found that the jurisdiction was never transferred u/s 127 nor any communication was made to Assessee. It relied on the binding judgment of the Allahabad High Court in Pr. CIT v. Mohd. Rizwan, which held that an order passed by an officer having no jurisdiction is void ab initio & must be set aside, irrespective of whether the issue was raised earlier or whether Assessee participated in the proceedings. Jurisdiction cannot be conferred by consent, participation or waiver. Tribunal, following this principle, held that the assessment completed by Ward-2 officer was without lawful authority & therefore the reassessment was quashed as invalid. Since this issue went to the root of the matter, the entire assessment was set aside.
