Nirmaben Sureshkumar Patel Vs ITO (ITAT Ahmedabad)
Non-Jurisdictional AO Issued 148 Notice- 263 Order Set Aside—PCIT Must First Decide AO’s Jurisdiction Before Revising
Assessee filed ROI declaring ₹4,81,320. Reassessment u/s 147 was completed by NFAC on 28.03.2022 accepting returned income. Subsequently, PCIT invoked revision u/s 263 based on search findings in Navratna Group indicating alleged on-money of ₹61,51,005 for a villa purchased by Assessee. PCIT held AO had done no enquiry regarding seized excel sheet, Settlement Commission disclosures, source of investment, applicability of s.69/69B & 115BBE, & set aside reassessment for fresh verification.
Before Tribunal, Assessee raised foundational jurisdictional objections: all earlier returns were filed in Vapi, she continued to reside in Vapi, but notice u/s 148 was issued by ITO Ward-1 Mehsana who had no territorial jurisdiction. No transfer order u/s 127 existed. Screenshot placed by Department only showed transfer between two Mehsana wards dated 05.01.2021, not from Vapi to Mehsana. Assessee relied on Gujarat HC judgment in Pankajbhai Jaysukhlal Shah holding notice u/s 148 by non-jurisdictional AO is void & reassessment becomes non est.
Tribunal noted that Assessee had specifically raised jurisdictional objections before PCIT, but PCIT ignored them & proceeded directly under Explanation 2(a) to s.263 citing lack of enquiry. Tribunal held that existence of a valid assessment order is a precondition for 263; if reassessment itself is potentially void for want of jurisdiction, PCIT must first adjudicate that issue. Failure to examine this foundational objection renders the 263 order legally unsustainable.
