Sperry International Pvt Ltd Vs DCIT (ITAT Delhi)
The assessee, a corporate entity, filed its return of income for Assessment Year 2013-14 declaring income of Rs. 9,94,049. Based on information alleging receipt of accommodation entries amounting to Rs. 1.55 crore, reassessment proceedings were initiated through a notice under Section 148 dated 27.03.2019 by the Assistant Commissioner of Income Tax (ACIT). The reassessment order dated 05.12.2019 resulted in an addition of Rs. 1.55 crore under Section 69B. The Commissioner of Income Tax (Appeals), NFAC, upheld the reassessment order.
Before the ITAT, the assessee contended that under CBDT Instruction No. 1/2011, jurisdiction for corporate assessees in metro cities is determined based on returned income. Cases where returned income does not exceed Rs. 30 lakh fall within the jurisdiction of the Income Tax Officer (ITO), while cases exceeding that threshold fall under the jurisdiction of the DCIT/ACIT. Since the assessee’s returned income was Rs. 9,94,049, jurisdiction vested with the ITO and not the ACIT. Therefore, the reassessment proceedings initiated by the ACIT were without jurisdiction.
The Revenue argued that the assessment was framed by a competent officer and that the assessee’s objection was merely technical in nature.
The Tribunal observed that the assessee’s returned income was below the Rs. 30 lakh threshold prescribed under the CBDT instruction. Accordingly, the ITO alone had jurisdiction to initiate reassessment proceedings under Section 148. Since the notice dated 27.03.2019 was issued by the ACIT, who lacked inherent jurisdiction over the assessee, the initiation of reassessment proceedings was invalid.
