TMI Blog2024 (3) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITO, where the income of the assessee was ₹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. - Decided in favour of assessee. - Shri Prashant Maharishi, AM And Shri Rahul Chaudhary, JM For the Assessee : Shri Ashok Bansal, AR For the Revenue : Smt. Mahita Nair, DR ORDER PER PRASHANT MAHARISHI, AM: 01. This appeal is filed by Rajat Commercial Private Limited in ITA No. 30/Mum/2023, for A.Y. 2012-13, against the appellate order passed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)] dated 25th November, 2022, wherein the appeal filed by the assessee against the assessment order passed under Section 143(3) read with section 147 of the Income-tax Act, 1961 (the Act) dated 26th December, 2017, passed by the Dy. Commissioner of Income Tax, Central Circle 1(1), Mumbai, (the learned Assessing Officer) was dismissed. 02. Therefore, the assessee is in appeal. Assessee has raised following grounds of appeal:- GROUNDS OF APPEAL 1. The Id.CIT(A) erred in confirming validity of the jurisdiction assumed by the AO u/s 147 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Interim Resolution Professional. Additional ground filed , which we dela with later on , is also verified by the Insolvency Resolution Professional. 04. Brief facts of the case shows that assessee is engaged in the business of investment in shares and securities filed his return of income for A.Y. 2011-12 on 29th September, 2012, at a loss of ₹2,73,37,520/-. This return was processed on 14th February, 2013, under Section 143(1) of the Act. 05. Subsequently, the reasons were recorded for the reopening of the assessment on the basis of the information that assessee is one of the beneficiaries in case of bogus accommodation entries. It was found that the trading value of shares in two of the companies engaged into by the assessee is ₹6.59 crores. The learned Assessing Officer examined the transaction and found that there is tangible information. Notice under Section 148 of the Income-tax Act, 1961 (the Act) was issued on 26th September, 2016. Assessee reiterated original return of income. The copies of the reasons were provided to the assessee, which was objected to and such objections were disposed off. Notice under Section 143(2) and 142(1) of the Act was issued to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the balance sheet of the assessee company, wherein the above shares were partly acquired in the year ended on 31st March, 2006 and further, copy of allotment letters for allotment of shares on 22nd September, 2009. The assessee submitted the bank statement evidencing the payment for allotment of the above share. The assessee also stated that after acquisition of the above 9,35,000 equity shares of ₹10 each, same were sub divided on 11th May, 2011. The Demat account of assessee with progressive share broker private limited was also submitted. As assessee also submitted the copy of contract notes on sale of the above share, transfer of the above shares from the Demat Account of the assessee supported with the brokers ledger account and bank statement for payment receive. Therefore, it was submitted that there is nothing unusual in the transaction by which it can be said to be unexplained. The assessee also challenged the reopening of the assessment. The ground of reopening was dismissed by the learned CIT (A) holding that the reasons recorded by the learned Assessing Officer are on application of mind and the reopening in absence of any assessment is valid. The assessee also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the notice is issued by the learned Assessing Officer for the reason that assessee has disclosed nil income in the return of income. The learned Departmental Representative referred to return of income originally filed where the total income is ₹ nil. It was further stated that the speculation loss has been earned by the assessee is carried forward. Therefore, the return deserves to be treated at ₹ nil only. Thus, it was stated that there is no infirmity and hence, additional ground cannot be admitted. The learned Departmental Representative also submitted that according to the Provisions of Section 124 of the Act, the jurisdiction of the learned Assessing Officer cannot be questioned now. If the assessee wanted to challenge the jurisdiction it should have been done within 1 month of the issue of notice. Therefore, the additional ground should not be admitted. 011. The learned Authorized Representative referred to the decision of the Hon'ble Bombay High Court in Writ Petition No. 3489 of 2019, in case of Ashok Devi Chand Jain dated 8th March, 2022. He referred to paragraph no. 5 that the notice under Section 148 of the Act is a jurisdictional notice. 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative has placed reliance on the decision of the Hon'ble Bombay High Court in case of Ashok Devi Chand Jain, the learned Departmental Representative submitted that in that case in the Writ Petition itself the assessee has challenged the jurisdiction of the learned Assessing Officer. 016. We have carefully considered the rival contentions in the present case, the assessee has filed return of income on 29th September, 2012, wherein the current year loss of ₹2,73,37,520/-, was returned. It is also an admitted fact that notice under Section 148 of the Act on 26th September, 2016 was issued by Income Tax Officer, 11(1)(1), Mumbai. This notice is now challenged on the ground that as the return of income filed by the assessee is more than ₹ 30 lacs and as assessee is resident of Mumbai, the jurisdiction of the assessee lies with Astt. Commissioner of Income Tax or Dy. Commissioner of Income Tax and not with the Income Tax Officer. The instruction no.1 of 2011, dated 31st January, 2011, also clearly provided that assessee being a corporate resident of metro city, having filed return of income at a loss of ₹2.73 crores, will have a jurisdiction of the Dy. Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the higher authorities by 31st March, 2019. 5. The notice under section 148 of the Act is jurisdictional notice and any inherent defect therein is not curable. In the facts of the case, notice having been issued by an officer who had no jurisdiction over the Petitioner, such notice in our view, has not been issued validly and is issued without authority in law. 6. In the circumstances, we have no hesitation in setting aside the notice dated 30th March, 2019. 7. Consequently the order dated 18th November, 2019 rejecting Petitioner's objection is also quashed and set aside. 017. INSTRUCTION NO. 1/2011 [F. NO. 187/12/2010-IT(A-I)], DATED 31-1-2011 provides as under :- INSTRUCTION NO. 1/2011 [F. NO. 187/12/2010-IT(A-I)], DATED 31-1-2011 References have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship to the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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