ITAT Quashes Income Tax Assessment Against Vipul Mittal Over Pecuniary Jurisdiction [Read Order]
The Tribunal relied on CBDT Instruction No. 01/2011, which clearly demarcates jurisdiction based on monetary limits for returns in metro cities.

Income - tax - assessment - Taxscan
Income - tax - assessment - Taxscan
The bench of the Income Tax Appellate Tribunal, Delhi, quashed the assessment framed against the assessee after holding that the scrutiny notice under Section 143(2) of the Income Tax Act, 1961, had been issued without jurisdiction. The Tribunal held that the defect was incurable, thereby setting aside the assessment proceedings in a dispute involving long-term capital gain taxation.
The appeal was filed by Vipul Mittal against the Deputy Commissioner of Income Tax, New Delhi, (DCIT) concerning the Assessment Year 2014-15. Mittal had declared income of ₹5 59,68,220, including a claim of exemption of ₹1,29,82,516 as long-term capital gain under Section 10(38) from the sale of shares of Turbotech Engineering Ltd.
The Assessing Officer (AO) treated the transactions as accommodation entries in a penny stock, added the gains as unexplained cash credit under Section 68 read with Section 115BBE, and further added alleged commission expenditure under Section 69C.
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The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the additions, leading to the present appeal.
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Represented by Amit Goel and Mohit Jain, the Appellant argued that all transactions were genuine, supported by demat statements, contract notes, and bank records, and conducted through recognised stock exchanges with payment of securities transaction tax. They was contended that the AO relied solely on third-party investigation reports and statements without providing cross-examination.
It further challenged the validity of the scrutiny notice under Section 143(2), as it was issued by an Income Tax Officer (ITO) despite jurisdiction lying only with the Deputy Commissioner/Assistant Commissioner under CBDT Instruction No. 01/2011, given that the returned income exceeded Rs. 20 lakh.
Reliance was placed on precedents including Ashok Devichand Jain v. Union of India (2022) and ITAT rulings in YKM Holdings Pvt. Ltd. and Sapna Rastogi (2025).
Represented by Harpreet Kaur Hansra, the Revenue argued that the assessee failed to raise jurisdictional objections before the AO or the Commissioner of Income Tax(Appeals) [CIT(A)], and was barred under Section 124(3) from raising them at the appellate stage.
It was submitted that the PAN-based jurisdiction initially vested with the ITO, Ward 11(3), New Delhi, and was subsequently transferred to Circle 11(2), which completed the assessment.
Reliance was placed on precedents including DCIT (Exemption) v. Kalinga Institute of Industrial Technology (SC).
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The bench comprising of Judicial Member, Sudhir Kumar and Accountant Member, S. Rifaur Rahman admitted the additional grounds on jurisdiction and ruled in favour of the assessee. The Tribunal observed that under CBDT Instruction No. 01/2011, the jurisdiction in this case lay with the Deputy Commissioner since the declared income exceeded Rs. 20 lakh. However, the notice under Section 143(2) was issued by the ITO, who lacked jurisdiction.
Following stare decisis, the Tribunal held that the defect was jurisdictional and not curable, thereby rendering the entire assessment void ab initio.
Consequently, the assessment order was quashed.
Thus, the appeal of the assessee is partly allowed.
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