The Kolkata Income Tax Appellate Tribunal (ITAT) has held that the income tax assessment made by a non-jurisdictional officer is null and void.
The two-member bench of Sonjoy Sarma (Judicial Member) and Rajesh Kumar (Accountant Member) has observed that in the case of a non-corporate assessee in non-metro cities, the ITR filed up to Rs. 15 lacs has to be assessed by ITO. Therefore, the assessment was made in violation of Instruction No. 1 of 2011 by the CBDT.
The return of income was filed, showing a total income of Rs. 10,02,340. The case of the assessee was selected for limited scrutiny, and a notice under section 143(2) was issued by the ITO, Ward 1(1), Jalpaiguri, on May 25, 2018. However, the assessment was framed by the Assistant Commissioner of Income Tax, Circle 1, Jalpaiguri.
According to the assessee, the assessment was void, ultra vires, and null in the eyes of the law because it was issued by the Assistant Commissioner of Income Tax, Circle 1(1), Jalpaiguri. As per CBDT Circular 1/2011 dated January 31, 2011, the Board has issued instructions that in the case of a non-corporate assessee where the income is declared up to Rs. 15 lacs, the assessment would be framed by the ITO.
The assessee submitted that since the order has been passed in violation of the instructions for CBDT by the Assistant Commissioner of Income Tax, Circle 1(l), Jalpaiguri, which is not a metro city, it needs to be quashed.
The department stated that the issue was never raised by the assessee either in the assessment proceedings or in the appellate proceedings, and therefore the assessee should not be allowed to raise this issue at this stage. Alternatively, the issue may be set aside for the file of the AO, and since this is a procedural defect, it may be cured by the authorities below.
The ITAT held that the assessee is a non-corporate assessee. The notice under section 143(2) was issued by ITO, Ward-1(1), Jalpaiguri, to the assessee, whereas the assessment was framed by the Assistant Commissioner of Income Tax, Circle-1(1), Jalpaiguri.
The tribunal quashed the assessment order passed on the ground of lack of jurisdiction.