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TMI Blog2024 (3) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... so, the Id.CIT(A) relied on some judgments referred to in the order under appeal without establishing how ratio decidendi of the said decisions are applicable to the facts of the appellant. 2. The Id.CIT(A) erred in dismissing the ground of appeal of the appellant challenging the legality of the assessment order as the same was passed without issue of valid notice u/s 143(2) of the Act. 2.1. In doing so, the Id. CIT(A) did not appreciate that the appellant has not challenged the validity of notice issued u/s 143(2) of the Act on the ground that it was not issued within the time limit but has challenged the same on the ground that the said notice authorised the AO to scrutinize the return originally filed on 29.09.2012 & not the return filed in response to notice u/s 148 of the Act on 10.04.2017. 3. The Id.CIT(A) erred in confirming the addition made u/s 68 of the Act of Rs. 25374801/- in respect of gain on sale of shares of Nouveau Global Ventures Ltd. (NGVL) as non-genuine long-term capital gain which was claimed by the appellant as exempt u/s 10(38) of the Act. 3.1. In doing so, the Id.CIT(A) did not appreciate that the initial onus which lay on the appellant to prove ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o show cause that why accommodation entries of long term capital gain in penny stock amounting to Rs.6,59,02,083/- should not be added to the total income under Section 68 of the Act. The assessee submitted its reply which was considered and thereafter, the learned Assessing Officer found that assessee has purchased shares of Nouveau Global Ventures Ltd. of 3,95,000 shares which were acquired in 1996-99 at a total cost of Rs.92,36,115/- which were sold on 17 and 18th January, 2012, for Rs.3,46,10,951/-, resulting into long term capital gain of Rs.2,53,74,801/-. The learned Assessing Officer verified the data of assessee and found that it has sold 62,64,191 shares of Nouveau Global Ventures Ltd. to Mr. Krishan Raghunath Prasad Khadaria on 18th January, 2012 and 30,85,809/- shares to Ms. Asha Krishan Khadaria on 17th January, 2012. The learned Assessing Officer held that Mr. Krishan Raghunath Prasad Khadaria was identified as entry operator by DIT Investigation Kolkata and Ms. Asha Krishan Khadaria and family member of Mr. Krishan Raghunath Prasad Khadaria. Therefore, purchases were made by the entry operator and his family. He further noted both these parties are also the directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce under Section 143(2) of the Act was issued to the assessee on 7th November, 2017, selecting the return of income filed originally on 20th September, 2012, for scrutiny and such notices is barred by limitation. It was further stated that the learned Assessing Officer did not issue any notice under Section 143(2) of the Act in response to the return of income filed on 10th April, 2017 and in absence of such notice the assessment is invalid. The learned CIT (A) held that the notice under Section 148 of the Act was issued on 26th September, 2016, which was responded by the assessee by filing letter dated 10th April, 2017, reiterating the original return filed on 29th September, 2012, under Section 139 of the Act. Therefore, assessee filed its return of income on 10th April, 2017 and notice under Section 143(2) of the Act was issued on 7th November, 2017, which is then prescribed time limit of 6 months from the end of the financial year in which the return was furnished. Therefore, this ground of appeal was also dismissed. With respect to the addition of Rs.2,53,74,801/-, the learned CIT (A) examine the reasons given by the learned Assessing Officer and following the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rival contentions and perused the orders of the lower authorities. We find that assessee has raised a jurisdictional issue of issue of notice by a non-jurisdictional officer. Such ground goes to the root of the matter and therefore, same deserves to be admitted. 013. On the merits of the additional ground, the learned Authorized Representative submitted that assessee filed return of income disclosing a loss of Rs.2,73,37,520/-, for which the jurisdiction lies with the Dy. Commissioner of Income Tax, whereas the notice is issued under Section 148 of the Act by the Income Tax Officer, ward 11(1)(1), Mumbai, placed at page no.23 of the paper book. It was further stated that the reasons for reopening of the assessment on 22nd August, 2017, have been recorded by Dy. Commissioner of Income Tax, 11(1)(1), Mumbai, on 26th September, 2016, the notice was issued by the ITO. He referred to the notice issued under Section 142(1) of the Act by the Dy. Commissioner of Income Tax, 11(1)(1), Mumbai. Therefore, the notice under Section 147 of the Act which was issued by the ITO should have also been issued by the Dy. Commissioner of Income Tax. He submitted that instruction no.1 of 2011, dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Bombay High Court in case of Ashok Devi Chand Jain [2023] 151 taxmann.com 70 (Bombay) , vide order dated 8th March, 2022, considering the above instruction has categorically held that the notice issued in that case by the ITO, where the income of the assessee was Rs.64.34 lacs is correctly without jurisdiction. The Hon'ble High Court also held that notice under Section 148 of the Act is jurisdictional notice and any defect therein is not curable. The Hon'ble High Court quashed the order passed in that case holding as under :- "1. Petitioner is impugning a notice dated 30th March, 2019 issued under section 148 of the Income-tax Act, 1961 (the Act) for A.Y. 2012-13 and order passed on 18th November, 2019 rejecting Petitioner's objection to reopening on various grounds. 2. The primary ground that has been raised is that the Income-tax Officer who issued the notice under section 148 of the Act, had no jurisdiction to issue such notice. According to Petitioner as per instruction No. 1/2011 dated 31st January, 2011 issued by the Central Board of Direct Taxes, where income declared/returned by any Non-Corporate assessee is up to Rs. 20 lakhs, then the jurisdiction wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Income Declared (Mofussil areas) Income Declared (Metro cities) ITOs ACs/DCs ITOs DCs/Acs Corporate returns Upto Rs. 20 lacs Above Rs. 20 lacs Upto Rs. 30 lacs Above Rs. 30 lacs Non-corporate returns Upto Rs. 15 lacs Above Rs. 15 lacs Upto Rs. 20 lacs Above Rs. 20 lacs Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011." 018. As the facts of that case squarely applies to the case before us, respectfully following the decision of the Hon'ble Bombay High Court in case of Ashok Devi Chand Jain (supra), we also quash the order passed by the learned Assessing Officer. Accordingly, the additional ground raised by the assessee is allowed. 019. In the result, the appeal filed by the assesse ..... 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