Reassessment Declared Invalid Because Notice Was Issued Without Proper Authority: ITAT

The present appeal has been filed by ACIT, and Sh. Mukesh Kumar Mohta has filed a cross-objection in the ITAT Delhi, challenging a common order dated July 29, 2024, passed by the CIT(A)/NFAC, Delhi, relating to AY 2015-16. Although there were delays of 24 days in the Revenue’s appeal and 73 days in the assessee’s cross-objection, the Tribunal condoned both delays in the interest of justice and in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

The assessee first raised a legal objection that the reassessment, itself was invalid because the notice under section 143(2) was issued by the ITO, Ward-63, whereas the final assessment was completed by the ACIT, Circle-63(1), without any proof of lawful transfer of jurisdiction between them.

The revenue could not justify how the ITO had authority to issue the notice, especially when the returned income was Rs 58,73,920, nor could it produce any order showing transfer of jurisdiction to the ACIT. Tribunal added that, because of these two serious procedural lapses, the assessment itself is treated as invalid from the very beginning (non-est in law), and therefore the entire assessment is quashed.

As a result, the tribunal dismissed the revenue’s appeal and allowed the assessee’s cross-objection.