Assessment quashed due to jurisdictional error, notice invalid under Section 148.

The Tribunal quashed the assessment framed by ITO-1(1), Raipur, under Section 143(3) read with Section 147, due to the invalid notice issued under Section 148 by ITO-1(3), Raipur, lacking jurisdiction. The Tribunal held that an assessment based on a notice from a non-jurisdictional officer is invalid, citing relevant case law. The appeal of the assessee was allowed solely on jurisdictional grounds, without addressing other issues related to the merits of the additions.

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Issues Involved:
1. Validity of rejecting books of account and applying Section 145(3).
2. Treatment of purchases as bogus and disallowance of 25% of such purchases.
3. Validity of the notice issued under Section 148 by a non-jurisdictional officer.

Issue-wise Detailed Analysis:

1. Validity of Rejecting Books of Account and Applying Section 145(3):
The assessee challenged the rejection of its books of account under Section 145(3) of the Income-tax Act, 1961, arguing that the Assessing Officer (AO) and the Commissioner of Income-Tax (Appeals) erred in rejecting the books in the absence of multiple defects. The Tribunal did not delve into this issue as it quashed the assessment on jurisdictional grounds.

2. Treatment of Purchases as Bogus and Disallowance of 25% of Such Purchases:
The AO treated purchases worth Rs. 7,58,800 from 'Goyal Jute Udyog' as bogus and disallowed 25% of these purchases, amounting to Rs. 1,89,700, based on presumptions and without corroborative evidence. The Tribunal did not address the merits of this issue as the assessment was quashed on jurisdictional grounds.

3. Validity of the Notice Issued Under Section 148 by a Non-Jurisdictional Officer:
The core issue was the validity of the notice issued under Section 148 by ITO-1(3), Raipur, who did not have jurisdiction over the assessee at the relevant time. The Tribunal admitted this additional ground as it involved a pure question of law. The Tribunal found that the ITO-1(3), Raipur, issued the notice on 25.03.2018, while the jurisdiction over the assessee was vested with ITO-1(1), Raipur, as per Notification No.1/2014-15 dated 15.11.2014. The Tribunal relied on various judicial precedents, including the Supreme Court's judgment in National Thermal Power Company Ltd. Vs. CIT and the Bombay High Court's judgment in Pavan Morarka Vs. ACIT, to conclude that an assessment based on a notice issued by a non-jurisdictional officer is invalid.

The Tribunal held that the assessment framed by ITO-1(1), Raipur, based on the invalid notice issued by ITO-1(3), Raipur, was devoid of any force of law and quashed the assessment. The Tribunal also rejected the Department's argument that the assessee should have challenged the jurisdiction within the stipulated time under Section 124(3), as the notice was issued by an officer who did not have inherent jurisdiction.

Conclusion:
The Tribunal quashed the assessment framed by ITO-1(1), Raipur, under Section 143(3) read with Section 147, dated 30.12.2018, due to the invalidity of the notice issued under Section 148 by ITO-1(3), Raipur, who lacked jurisdiction. Consequently, the Tribunal did not address other grounds related to the merits of the additions. The appeal of the assessee was allowed based on the jurisdictional issue.

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