Indubala Jayant Jain Vs ITO (ITAT Mumbai)
Reassessment Quashed as Notice Issued by Non-Jurisdictional AO: ITAT Mumbai Nullifies Entire 148 Proceedings
In this appeal, Smt. Indubala Jayant Jain challenged the reassessment framed u/s 143(3) r.w.s. 147 pursuant to a notice issued u/s 148 dated 30.03.2017 by ITO Ward 17(2)(1), Mumbai, though her assessed jurisdiction was with ITO Ward 15(2)(4), Mumbai. Assessee had filed her original return on 28.07.2010 declaring income of ₹14,15,680 & the same was processed u/s 143(1). The case was reopened on the basis of AST information treating her as a “non-filer”, which itself was factually incorrect. Assessee immediately objected to the jurisdiction by a detailed letter dated 11.04.2017 (received by AO on 03.05.2017), requesting reasons & pointing out wrong jurisdiction. However, AO proceeded with reassessment without disposing of objections & finally made additions totaling ₹1,01,50,838. CIT(A)/NFAC sustained the reassessment.
Before Tribunal, Assessee raised additional legal grounds u/s 255(5) challenging the very assumption of jurisdiction. Tribunal admitted the grounds in view of the Supreme Court decision in NTPC Ltd. v CIT. Tribunal examined the record & found that the notice u/s 148 was undisputedly issued by a non-jurisdictional AO, contrary to section 124. Further, AO also failed to dispose of the jurisdictional objections before passing the order, which is a jurisdictional fatality. Tribunal relied on the Bombay High Court judgment in Ashok Devichand Jain v UOI (2023) 151 taxmann.com 70 (Bom), which categorically held that a notice u/s 148 issued by a non-jurisdictional officer is void ab initio and the assessment pursuant thereto is invalid in law. Since Revenue could not rebut these facts, Tribunal held the entire reassessment as null & void. Consequently, the demand of ₹1,01,50,838 stood quashed & remaining grounds were rendered academic.
The appeal of the Assessee was allowed in full.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
