Reassessment on the basis of an illegal notice u/s 148 is not sustainable : ITAT Mumbai
Reassessment Notice u/s. 148 notice issued by a non-jurisdictional AO is not valid-M/s. Indorama Software Solution Ltd. Vs ITO- Ward 9(2)-1 (ITAT Mumbai)- IT Appeal No. 5211 & 5290 (MUM.) OF 2011-Date of Judgement/Order : 07/09/2012
Issue involved :
The assessee raised an objection of validation of notice issued u/s 148 inter alia on the ground that the Assessing Officer who has issued the notice u/s 148 was not having jurisdiction over the assessee.
The Assessing Officer who has completed the re-assessment did not accept the contention and objection of the assessee and completed the re-assessment vide order dated 22.11.2010.
Observation by court :
Section 148 mandates issue of notice before assessment, reassessment or computation u/s 147.
As per section 148, it is mandatory that the Assessing Officer shall serve on the assessee a notice required him to furnish a return.
The expression “Assessing Officer” used in the section 148 means ‘the Assessing Officer vested with the jurisdiction over the assessee as stipulated in the definition u/s 2(7A) by virtue of the directions / orders passed u/s 120, sub-section (1) & (2)’.
Thus, the notice u/s 148 is required to be issued by the Assessing Officer who is vested with the jurisdiction over the assessee on the basis of the criteria of territorial area, a person or classes of persons, income or classes of incomes and cases or classes of cases as enumerated in sub-section 3 of section 120 of Income Tax Act.
It is not the case of the Revenue that the Assessing Officer who has issued the notice u/s 148 was vested with the jurisdiction by virtue of any direction or orders issued under sub-section (1) or (2) of section 120 of the Income Tax Act.
Thus, there is no dispute about the jurisdiction vested with the Assessing Officer – ITO, Ward-9(2)-1 over the assessee when the notice u/s 148 was issued by the ITO, Ward-10(3)-4. When it is apparent that the notice u/s 148 was issued by the AO who was not vested with the jurisdiction over the assessee then, the same is patiently illegal and void. Consequently, the reassessment proceedings and order in pursuant to the illegal notice u/s 148 are also void ab initio and liable to be set aside.
Hence, we hold that the reassessment on the basis of an illegal notice u/s 148 is not sustainable and accordingly the same is set aside.
