Notice u/s 148 quashed as it was not issued by ITO but ACIT against the CBDT Instruction

Reopening notice u/s 148 quashed as notice was not issued by ITO but issued by ACIT in violation of CBDT Instruction

In a recent judgment ITAT Delhi quashed reopening notice u/s 148 because as the notice was issued by ACIT but as per CBDT Instruction, the notice u/s 148 of ought to have been issued by the ITO.

ABCAUS Case Law Citation:
5119 (2026) (04) abacus.in ITAT

In the instant case, the appellant assesse had challenged the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre upholding the reassessment made.

The ssessee was an HUF. During the period relevant to the assessment year under appeal, the assessee had made a donation to a political party and had claimed deduction u/s 80GGC of the Income Tax Act, 1961 (the Act).

The case of the assessee was reopened and notice u/s 148A(b) of the Act was issued to the assessee. The solitary reason for reopening the assessment was that the donation made by the assessee to the political party, Rashtriya Samajwadi Party (Secular) was allegedly bogus.

The objections filed by the assessee were rejected by the Assessing Officer (AO). On the same date notice u/s 148 of the Act was issued to the assessee by the Assistant Commissioner of Income Tax (ACIT).

Before the ITAT, the assesse contended that as per CBDT Instruction No. 1/2011 dated 31.01.2011, the notice u/s 148 of the Act and resultant assessment thereafter should have been made by the Income Tax Officer. The ACIT had no jurisdiction to issue notice where the income declared by a non-corporate assessee is up to Rs.20,00,000/- (in metro cities). The notice u/s.148 of the Act issued by the ACIT and the assessment thereof is without jurisdiction, hence, invalid.

The ITAT noted that CBDT vide aforesaid instruction had specified monetary limits for assigning cases to ITOs and ACs/DCs distinguishing corporate and non corporate assesses and extent of income declared in Metro Cities and otherwise.

The ITAT observed that undisputedly, the assessee had filed return of income u/s 139(1) of the Act declaring total income which was less than the monetary limit of Rs. 20,00,000/- specified under CBDT Instruction No.1/2011 dated 31.01.2011. Even in the return of income filed by the assessee in response to notice u/s 148 of the Act, the assessee had declared total income.

The ITAT observed that in the light of aforesaid CBDT Instruction, the notice u/s 148 of the Act ought to have been issued by the ITO. Since, in the present case the notice has been issued by the ACIT, the same was without jurisdiction, hence, void ab initio.

The ITAT further observed that the Division Bench of the Tribunal, in similar facts, had held notice issued u/s 148 of the Act to be defective and void ab initio.

Accordingly, the ITAT held that the notice issued u/s 148 of the Act by the ACIT was without jurisdiction making the proceedings arising from such defective notice vitiated and hence, quashed.

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