Notice u/s 148A(b) issued by non-jurisdictional AO bad in law – ITAT

Notice u/s 148A(b) issued by non-jurisdictional AO bad in law – ITAT quashed order u/s 148A(d)

In a recent judgment, the ITAT Jodhpur has quashed order u/s 148A(d) as notice u/s 148A(b) was issued by the non-jurisdictional ITO was bad in law.

ABCAUS Case Law Citation:
ABCAUS 4095 (2024) (06) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) National Faceless Appeal Centre (NFAC) upholding the additions and validity of notice u/s 148 of the Income Tax Act, 1961 (the Act).

The assessee sold agriculture land and deposited the sale consideration in the bank account. The assessee had handed over the possession of the land to the purchasers who in turn had sold the land in pieces to different persons.

As per the agreement, the assessee was bound to get the registry of the land in the name of the persons as per the choice of the purchasers of the land. Accordingly, the assessee got the registries done in the name of different persons.

The AO rejected the agreement which was the base of the cash deposited in the bank account of the assessee and made the addition of the same. Similarly, the AO had added the total receipt on account of sale of so called plots and calculated the long term capital gains and added it in the declared income. Further the AO rejected the deduction u/s 54F which was claimed by the assessee.

Before the Tribunal the assessee contended that since his case was transferred from Ward -3 to Ward -4 notice issued by ITO ward-3 lacked jurisdiction and ITO Ward -4 had not issued any notices after the case received by him and therefore, notice issued u/s. 148 by the non-jurisdictional ITO was bad in law and consequential order of assessment was bad in law.

The Tribunal noted that as per the letter written by the ITO, Ward-3 to Ward-4 it had been categorically confirmed that “Territorial jurisdiction over the assessee lies with Ward-4”. It was further stated that the assessment u/s 148 was pending and the same had been time barred.

Therefore, the Tribunal opined that while issuing the notice u/s 148 of the Act it was not under dispute that the notice issued u/s 148 by the ITO, Ward – 3 who had no jurisdiction over and the same was not sustainable.

The Tribunal observed that the Hon’ble Delhi High Court in a similar case quashed a notice u/s 148A(b) as well as an impugned order u/s 148A(d) of the Act as it had been issued by a non-jurisdictional Assessing Officer wherein the High Court noted that that the said Income Tax Officer had no jurisdiction to issue to propose initiation of reassessment proceedings, as the petitioner’s jurisdictional Assessing Officer was based different Circle.

Consequently, the Tribunal opined that as the impugned notice u/s 148A(b) as well as the impugned order u/s 148A(d) had been issued by a non-jurisdictional Assessing Officer, the same were to be quashed.

In the result, the appeal of the assessee was allowed.

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