Appeal allowed due to lack of jurisdiction by Assessing Officer. Importance of proper jurisdiction emphasized.

The ITAT allowed the appeal, setting aside the assessment order due to lack of jurisdiction of the Assessing Officer over the deceased assessee's case. The ITAT emphasized the importance of proper jurisdiction in assessment proceedings, highlighting that the AO admitted the lack of jurisdiction and failed to transfer the case to the appropriate ward. As the assessment order was deemed invalid on jurisdictional grounds, other case merits were not addressed. Consequently, the appellant's appeal was successful, and the assessment order was overturned.

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Issues:
1. Jurisdictional challenge to the assessment order passed under sections 143(3) and 147.

Detailed Analysis:

Jurisdictional Challenge:
The appeal was against the order of the ld. CIT(A)-1, Jaipur, where the assessee challenged the assessment order under sections 143(3) and 147. The key contention was the lack of jurisdiction of the Assessing Officer (AO) over the deceased assessee's case. The notice u/s 148 was issued to the legal heir after seeking approval from a different jurisdictional Commissioner. The legal heir raised objections regarding jurisdiction before the AO, citing ignorance of law due to not being a regular income tax assessee. The AO proceeded with the assessment despite the objections. The appellant argued that the AO cannot benefit from the assessee's ignorance of the law. The ld. CIT(A) rejected these contentions, leading to the appeal before the ITAT.

The ld. DR argued that as per section 124(3) of the Act, jurisdictional challenges must be raised within one month of receiving notices u/s 148/142(1). The assessee raised jurisdictional issues much later, near the time-barring date of assessment. However, the ITAT found that the AO did not have jurisdiction over the deceased assessee's case. The reasons recorded by the AO indicated that the income had escaped assessment, but the jurisdictional issue was crucial. The AO himself admitted the lack of jurisdiction and acknowledged that it lay with a different ward. Despite this, the AO proceeded with the assessment. The ITAT emphasized that the last known residence address of the deceased assessee determined jurisdiction, as per section 124(1)(b) of the Act.

The ITAT noted that the AO's acknowledgment of lacking jurisdiction and the absence of action by the higher authorities to transfer the case indicated a clear lack of jurisdiction. The assessment order passed by the AO without proper jurisdiction was set aside. The ITAT held that the appellant's late objection was justified given the circumstances. As the assessment order was set aside on jurisdictional grounds, other grounds on the merits of the case were rendered moot and not addressed. Consequently, the appeal of the assessee was allowed, and the assessment order was set aside.

In conclusion, the ITAT's decision focused on the crucial issue of jurisdiction, emphasizing the importance of proper jurisdiction in assessment proceedings and ruling in favor of the appellant due to the lack of jurisdiction of the Assessing Officer over the deceased assessee's case.

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