ITAT Quashes Assessment for Lack of Jurisdiction: "Reason to Believe" Framed by Non-Jurisdictional AO Held Invalid [Read Order]
ITAT noted that the notice issued by the AO u/s 148 had no jurisdiction
![ITAT Quashes Assessment for Lack of Jurisdiction: Reason to Believe Framed by Non-Jurisdictional AO Held Invalid [Read Order]](https://images.taxscan.in/h-upload/2025/07/07/2060462-itat-itat-quashes-assessment-for-lack-of-jurisdiction-lack-of-jurisdiction-jurisdiction-taxscan.webp "ITAT Quashes Assessment for Lack of Jurisdiction: Reason to Believe Framed by Non-Jurisdictional AO Held Invalid [Read Order]")
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has quashed an assessment order for the financial year 2011-12, holding that the notice under Section 148 of the Income Tax Act, 1961, was invalid as it was issued by a non-jurisdictional Assessing Officer (AO). Coming to the facts of the present case, the assessee, Tasleem Bano, a homemaker from Jaipur, challenged...
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has quashed an assessment order for the financial year 2011-12, holding that the notice under Section 148 of the Income Tax Act, 1961, was invalid as it was issued by a non-jurisdictional Assessing Officer (AO).
Coming to the facts of the present case, the assessee, Tasleem Bano, a homemaker from Jaipur, challenged the reassessment proceedings initiated against her on the grounds of jurisdictional error.
The dispute arose when the AO of Ward 5(1), Jaipur, issued a notice under Section 148 of the Income Tax Act by observing that income of Rs. 3 lakhs had escaped assessment due to unexplained cash deposits in Bano's bank account. However, the jurisdictional AO for Bano’s case was Ward 5(2), Jaipur. Despite this, the case was later transferred to Ward 5(4), Jaipur, where the assessment was completed, adding Rs. 14,17,300 to her income as unexplained cash deposits.
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The assessee contested the assessment by stating that the notice under Section 148 was invalid since it was issued by an AO without jurisdiction. She emphasized that the "reason to believe" for reopening the assessment must be framed by the jurisdictional AO, a principle settled by precedent. The ITAT by relying on its earlier decision in Shri Mukesh Kumar Agarwal vs ITO and the Delhi High Court’s ruling in Dushyant Kumar Jain vs DCIT, held that reassessment notices issued by non-jurisdictional AOs are invalid.
The Tribunal noted that while the Department claimed the transfer of jurisdiction between wards under the same range did not require a formal order under Section 127, the foundational notice itself was flawed. Since the "reason to believe" was recorded by a non-jurisdictional AO, the subsequent assessment order passed by Ward 5(4) was deemed void ab initio.
Additionally, the ITAT condoned a 558-day delay in filing the appeal, accepting Bano’s plea that as a homemaker with limited education, she was unaware of the online notices, which were never physically served. Her husband, an NRI residing in Italy, discovered the proceedings only upon visiting India in January 2025, prompting immediate action.
The ITAT, comprising Dr. S. Seethalakshmi (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member), allowed the assessee’s appeal.
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