TaxTMI 
2026 (11) TMI 521
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....shing the impugned assessment order passed u/s 147 being based on invalid (mechanical) jurisdictional notice u/s 148 purportedly dated 29.03.2024 (issued by ITO Ward 23(3) Delhi), as same is issued without any application of mind; C) That Ld CIT-A vide impugned order passed us 250 of the Act (1961 Act) erred in not quashing the impugned assessment order passed u/s 147 being based on invalid jurisdictional notice u/s 148 purportedly dated 29.03.2024 unlawfully issued by ITO Ward 23(3) Delhi as same is issued in violation of pecuniary jurisdiction specified in CBDI instruction 1/2011 dated 31.01.2011 Jurisdiction to issue notice lies with concerned ACIT/DIT for returned income in corporate assessee of above RS 31,49,323 and not ITO) D) That Ld CIT-A vide impugned order passed us 250 of the Act (1961 Act) erred in not quashing the impugned assessment order passed u/s 147 being based on invalid transfer order passed u/s 127; E) That Ld CIT-A vide impugned order passed us 250 of the Act (1961 Act) erred in not quashing the impugned assessment order passed u/s 147 being based on invalid /mechanical sanction u/s 148(expl 2 clause iv), which is merely on order sh....
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..../69C to the extent of Rs 84,98,985 u/s 68, as same was made without application of mind to the admitted factual position of the case and without any supporting basis for the same. O) That Ld CIT-A vide impugned order passed us 250 of the Act (1961 Act) erred in not quashing the impugned assessment order passed u/s 147 as there is total lack of valid Show cause notice (SCN) thus vitiating the impugned assessment framed u/s 147; 3. At the outset, the ld. Counsel for the assessee submitted that it has raised legal grounds A to G concerning invalidity of issue of notice u/s 148 on account of jurisdictional insufficiency and that the same be adjudicated first in preference to its other grounds of appeal qua merits of addition, etc. It was submitted that the impugned legal grounds strike at the root of the matter. Accordingly, we have decided to adjudicate the said grounds of appeal first. 4. Brief factual matrix of the case as culled out from the order of the lower authorities is that the Return declaring income of Rs. 31,49,323/- was filed on 01.11.2019. The ld. Assessing Officer had received information that the assessee was a beneficiary of accommodation entry from Shr....
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.... 7. On the issue of notice u/s 148, issued by ITO as against AC/DC, reliance has been placed upon the decision of this Tribunal in the case of Kshitiz Sachdeva ITA No.6133/Del/2025 holding that "Now CBDT instructions No. 1 of 2011 dated 31.01.2011 provide that in case of metro cities income declared by individuals is above Rs. 20,00,000/- in those circumstances Deputy Commissioner/Assistant Commissioner has power of assessment. Thus, in case of assessee as the income declared was less that Rs. 20,00,000/- the power vested with Income Tax Officer only. Therefore, issuance of notice u/s 143(2) of the Act for assumption of jurisdiction of assessment to be completed u/s 143(3) by ACIT, Circle 41(1) is vitiated." 8. Further, it was submitted that another bench of this Tribunal in case of Heritage Lamps in its order dated 18.02.2026 has held that "It is further observed that as per CBDT instruction No. 1/2011 dt. 31.1.2011, the territorial jurisdiction over the assessee lies with the ITO as the income of the assessee was below Rs. 20.00 lacs. It is an admitted position that in the present case, the notice u/s 148 was issued by the AO who was not having jurisdiction over the assessee....
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....unal in the case of Optus Developers Pvt. Ltd. vs. ACIT, CC-32 ND reported in (2026) 1TMI 1037 (ITAT Delhi.) has held as under. "2. Hearing both the sides we find that the assessee now questions the notice u/s 148 dated 31.03.2023 alleging same is outcome of non application of mind and for that as a matter of fact we find that in the notice AO mentioned. "I have information that a search was initiated under section 132 of the Act in your case or in the case of the person in respect of which you are the assessable under the Act on the date 17/09/2021. This notice is being issued after obtaining the prior approval of the PCCIT, Delhi accorded on date vide Reference No. 100000038640175. 3. Undisputedly and admittedly present case is of non-searched case (third party case) so when reopening u/s 148 of the Act is made directly on non-searched person same has different nature and has scope is to be strictly. As evident from cursory look to notice u/s 148 it is totally without application of mind as it is stated assessee is searched and non searched person both. As the impugned assessment order passed u/s 147/144 of the Act is considered we find that the assessment is co....
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....ction u/s 148 and consequent approval u/s 151 are based upon vague, irrelevant and non-specific basis lacking a live nexus with the material on records. The ld. Counsel drew our attention to the decision of Hon'ble Gujarat High Court in the case of Sandhya Maulik Patel 181 taxmann.com 123 as under:- "13. Thus, the AO in his satisfaction has positively recorded that he ascertained from the "public domain" that the said land was purchased by the petitioners. The AO presumed that since the seller entered into the MoU for Rs. 39,32,25,000/-, he could not have entered into a sale with the petitioners for Rs. 12,00,00,000/- without receiving on-money. The MoU found from mobile images shared between Dilip Patel, Ashok Atmaram Patel (proposed seller) and Dhiren R. Bharwad (proposed purchaser) disclosed the sale of Survey No.329 for Rs. 39.32 crores. The searched person, i.e. the broker, in his statement before the AO asserted that he did not broker the land deal and only supplied 7/12 Form and Form No.6 showing land entries post search. Thus, these forms were not seized during the search but were handed over by the broker to the AO post search. After these were supplied, the AO ob....
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....er. It is pertinent to note that the date of the seized document referred is of 11.08.2017 and it is the case of the Assessing Officer that the entire plot of land was sought to be sold at the rate of Rs. 17,000/- per square yard in the year 2017 as per the entry made in the register (seized document). Hence in absence of any independent corroborative material linking the present petitioner with the alleged - on money transaction, we are inclined to quash and set aside the impugned notice dated 30.03.2025" 16. The ld. Counsel also drew our attention to the decision of Hon'ble Gujarat High Court in the cases of 1) Trupti Aakash Desai versus Income Tax Officer ward 3(3)(5), Ahmedabad 2) Kantilal Parsotamdas Patel versus income tax Officer, Ward 5, Mehsana (08.04.2026) in Special Civil Application no.985 of 2026 & Special Civil Application no.3676 of 2026 holding that "It is true that the cash transactions are done in a clandestine manner using coded script, however, the revenue, before re-opening the assessment has to establish a live link of the assessee on the basis of seized material only. The expression " relates to" and "pertains to" used in Clause(iv) to Explanation....
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....ted to quash the notice u/s 148 and the consequent assessment order dated 28.03.2025. 18. The ld. DR vehemently argued in favour of the order of lower authorities. The ld. DR however could not distinguish the facts of the present case with the cited judicial precedents which were submitted by the Ld. Counsel for the assessee through his paper book filed during the hearing. 19. We have noted that the facts of the present case, as discerned from records extracted hereinabove, qua issue of notice u/s 148 by an ITO level officer as against an AC/DC level Officer, issue of deemed escapement and lack of live nexus is akin to those in the judicial precedents relied upon by the ld. Counsel for the assessee. Accordingly, we quash the notice u/s 148 dated 29.03.2024 and the consequent assessment order dated 28.03.2025 and allow the legal grounds of appeal raised by the assessee vide grounds of appeal Nos. A to G are allowed. 20. As we have allowed grounds of appeal no. A to G, all other grounds of appeal raised by the assessee from H to O have become academic in nature and hence left open. 21. In the result, the appeal of the assessee is allowed. Order pronounced in the open c....
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....DIA INCOME TAX DEPARTMENT COMMISSIONER OF INCOME TAX COMMISSIONERELHIZ Approval u/s 151 of the IT Act, 1961 Name of the assesse SINNI POLYMERS PRIVATE LIMITESOUTH Address and e-mail of the assessee EAST DELHI / [email protected] PAN 4 Circle/ Ward/ Range/ CIT Charge WARD 23(3), DELHI/ / RANGE 22, DELHI / PCIT. 2 The quantum of income which has escaped 81000000 8. Approval needed for Issue of notice u/s 148 where there is no. 9. Time limit for current proceedings covered u/s 149(1)(b) - for more than 3 years but not more 10. Limitation date for issuance of notice u/s 148 31/03/20Years contains the details of the information, as per 31/03MEN 12. () Enquiry conducted (if any), u/s 148A(a) (ii) Whether the show cause notice u/s 148A conductedofshow (b) contains the details of results of enquiry N/A 13. assessee u/s 148how cause notice to 148A(b) 14. submit reply to show cause notice u/s 148A(b) N/A 15. Whether any reply received from assessee u/s N/A 16. Whether personal hearing requested by assessee N/A 17 Whether the provision of Sec. 150(1) are 18. Reasons for the belief that income has Refer Annexure for reasons 19. Recommendations ....
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....otice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form verified prescribed manner and setting forth such other particulars as may be and Verified in the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Touch suggests that the income chargeable to tax has escaped assessment i the case of the assessee for the relevant assessment year and the Assessing Officer has The approval of the specified authority to issue such notice: 2.1 Further, Explanation 2(iv), to the said proviso, states as under :- Explanation 2-For the purposes of this section, where,- (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books....