Pecuniary jurisdiction defect in reassessment notice invalidated the reopening and led to quashing of the assessment.

Jurisdiction of income-tax authorities under section 120 and the CBDT's monetary allocation directions was central: because the assessee's returned loss placed the case outside the ITO's pecuniary jurisdiction under Instruction No. 1/2011, the reopening notice under section 148 and the completed assessment had to be issued by the ACIT/DCIT. A notice from an officer lacking competence was treated as a root defect, and section 292BB could not cure the absence of a valid notice from the jurisdictional officer. The reassessment was therefore held invalid for want of jurisdiction, and the assessment order was quashed.

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Issues: Whether the reassessment and the assessment order were liable to be quashed on the ground that the notice under section 148 and the consequential notices/orders were issued and passed by an officer lacking pecuniary jurisdiction over the assessee.

Analysis: Jurisdiction of income-tax authorities is controlled by section 120 of the Income-tax Act, 1961 and the Board's directions fixing monetary limits for allocation of cases. On the facts, the assessee's returned loss placed the case outside the monetary jurisdiction of the ITO under the applicable CBDT Instruction No.1/2011, so the authority competent to initiate and complete the proceedings was the ACIT/DCIT, not the ITO who issued the reopening notice and framed the assessment. The absence of a valid notice from the jurisdictional officer was treated as a root defect. The objection could not be cured by section 292BB because that provision does not validate a notice that was never issued by a competent officer. The reassessment procedure therefore lacked lawful foundation.

Conclusion: The reassessment was invalid for want of jurisdiction, and the assessment order was quashed in favour of the assessee.

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