Notice u/s 148 issued by non-jurisdictional Assessing Officer will render assessment proceedings invalid

The assessee in this appeal challenged the very jurisdiction of the AO in reopening the assessment u/s 147 of the Income Tax Act, 1961 (The Act).

In this case the assessee resident of B-10, Balram Nagar, Lohni, Ghaziabad, Uttar Pradesh filed return of income in Range-1, Ghaziabad on 17.12.2008 declaring income of Rs.1,11,090/-. Subsequently, notice u/s 148 of the Act dated 30.03.2015 was issued for the assessment year under consideration by the Income Tax Officer, Ward 70(3), New Delhi stating that income chargeable to tax for AY 2008-09 has escaped assessment within the meaning of section 147 of the Act. In response to the said notice the assessee filed letter dated 16.04.2015 stating that the return filed on 17.12.2008 may be treated as return filed in response to the said notice. Assessee also requested for reasons for reopening of assessment by initiating proceedings u/s 148. The ITO, Ward 70(3), New Delhi by letter dated 02.06.2015 communicated the reasons for reopening of assessment. The assessee by letter dated 21.12.2015 objected to reopening of assessment stating it as bad in law. It was contended that the reasons recorded are vague and there is no material evidence for forming the belief that income has escaped assessment. However, the reassessment was completed on 28.12.2015 u/s 147 read with section 143(3) of the Act determining the income of the assessee at Rs.38,11,090/- by the Income Tax Officer, Ward 1(3), Ghaziabad. Assessee contends that the notice u/s 148 was issued by the ITO, Ward 70(3), New Delhi, whereas the jurisdictional AO was ITO, Ghaziabad and, therefore, since the notice for reopening of assessment was issued by non-jurisdictional authority the reassessment proceedings are invalid and, the assessment order passed in pursuance to such notice is a nullity.

ITAT observed that ITO, Ward 70(3), New Delhi has issued notice u/s 148 for reopening the assessment of the assessee who is a resident of Ghaziabad and filing returns in Range-1, Ghaziabad. The assessee filed returns for the assessment years 2006-07 and 2008-09 in Range-1, Ghaziabad. Therefore, it is amply clear that the jurisdictional AO for making assessments of the assessee is ITO, Ghaziabad and not ITO, Ward 70(3), New Delhi. Hence, ITAT held that when the initiation of reassessment proceedings was made by the non-jurisdictional Assessing Officer the assessment made pursuant to such notice is invalid. Accordingly, allowed the appeal of assessee.

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