Territorial jurisdiction under income tax law turns on the principal place of business, not PAN records; assessment quashed.

Territorial jurisdiction under the Income-tax Act, 1961 depends on the assessee's statutory nexus with the area, especially the principal place of business, and not on PAN records alone. The record showed that the assessee's business operations, bank accounts, registrations and managerial control were at Faridabad, with assessments for surrounding years also framed there. In the absence of any order under section 127 and after an earlier transfer of the case from Delhi to Faridabad, the Delhi assessment was found to have been made by an officer lacking jurisdiction. The assessment was therefore quashed as without jurisdiction, bad in law, non est and void ab initio.

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Issues: Whether the assessment framed by the Additional Commissioner at Delhi for the assessment year 2011-12 was valid jurisdiction, having regard to the assessee's asserted place of business and the earlier transfer of jurisdiction to Faridabad.

Analysis: The jurisdictional controversy was decided with reference to the scheme of section 124 of the Income-tax Act, 1961, which makes the place where the business is carried on, and where there are multiple places, the principal place of business, the decisive factor for territorial jurisdiction. The record showed that the assessee's business operations, bank accounts, registrations, and managerial control were located at Faridabad, and that assessments for the surrounding years had been framed by the Faridabad jurisdiction. The prior transfer of the case from Delhi to Faridabad and the absence of any order under section 127 of the Income-tax Act, 1961 supported the assessee's objection. The reliance on PAN-based jurisdiction was rejected, and the assessment was held not to have been made by a duly vested assessing authority. As the assessment was quashed on this jurisdictional ground, the other grounds were not adjudicated.

Conclusion: The assessment was held to be without jurisdiction, bad in law, non-est and void ab initio, and the assessee's challenge succeeded.

Ratio Decidendi: Territorial jurisdiction under the Income-tax Act, 1961 is determined by the assessee's statutory nexus with the area, particularly the principal place of business, and not by PAN records alone; an assessment made by an officer lacking such jurisdiction is void.

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