Assessment quashed as ITR was above Rs. 10 lacs for which ITO lacked jurisdiction

Assessment quashed as the return of income was filed by the assessee was above Rs.10 lacs, for which, the jurisdiction vested only with the DCIT/ACIT and not with ITO.

In a recent judgment, ITAT Raipur quashed assessment as the return of income was filed by the assessee above Rs.10 lacs, for which, the jurisdiction vested only with the DCIT/ACIT and not with ITO who framed assessment u/s 143(3) which lacked inherent jurisdiction.

ABCAUS Case Law Citation:
4674 (2025) (07) abcaus.in ITAT

Important Case Laws relied upon by Parties:
Ashok Devichand Jain Vs. Union of India

In the instant case, the assessee had challenged the order passed by the CIT(A) inter alia on the legal ground of jurisdiction of the Assessing Officer (AO) in making the impugned assessment under section 143(3) of the Income Tax Act, 1961 (the Act).

It was submitted that the assessment was framed u/s 143(3) of the Act by the Income Tax Officer was invalid, bad-in-law and void ab initio, as the notice u/s 143(2) was not issued by the Assessing Officer having jurisdiction over the assessee (i.e. DCIT/ACIT), as envisaged u/s 143(2) r.w.s. 2(7A) r.w.s. 120 and Notification issued by the JCIT, Range.

The assessee submitted that since the total income filed as per the returned income was more than Rs. 10 lakhs, the competent authority to issue the statutory notice and subsequent completion of assessment order u/sec. 143(3) was vested upon DCIT/ACIT and not with ITO. 

It was contended that since the total income returned was above Rs. 10,00,000/-, therefore, the competent authority to issue notice u/sec. 143(2) and the subsequent assessment completed u/sec. 143(3) could only have been exercised and performed by DCIT/ACIT and since the ITO lacked inherent jurisdiction for issuance of such notice and framing of assessment, therefore such assessment was invalid, bad in law and void ab-initio. 

The Tribunal observed that it is obvious and trite that any action by the revenue authority without jurisdiction is bad in law, void ab-initio and hence, liable to be struck down on the said count itself.

The Tribunal further noted that the issue in hand was no more res-integra as per the judicial precedents that any right and liabilities specifically in a case of imposing liability for that matter whether it is income tax or any other financial burden on the assessee through legal dictate, the said action can only be pronounced as legally valid if it is exercised within parameter of correct jurisdiction.

The Tribunal held that it was clearly evidenced that the return of income was filed by the assessee above Rs.10 lacs, for which, the jurisdiction vested only with the DCIT/ACIT and not with ITO and that since in the present case, the assessment had been framed u/s. 143(3) of the Act by the ITO who lacked inherent jurisdiction.

Accordingly, the Tribunal held that the assessment framed by ITO was invalid, void ab initio, and the order of assessment was quashed.

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