BHILAI WHOLESALE CONSUMER COOPERATIVE STORE LTD., BHILAI,DURG V. INCOME TAX OFFICER-1(2), BHILAI, DURG

ITA 39/RPR/2025

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The case involves Bhilai Wholesale Consumer Co-operative Stores Ltd., which appealed against the reassessment orders issued by the Income Tax Officer-1(2), Bhilai, for the assessment years 2008-09 to 2011-12. The primary legal contention was the lack of jurisdiction of the officers who issued the notices under section 148 of the Income Tax Act, 1961. The Tribunal examined the jurisdictional authority as per the CBDT instructions and relevant statutory provisions, leading to the conclusion that the reassessment orders were issued without valid jurisdiction, thus quashing them.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712094 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2009-2010
• Other Referred Cases: Union of India Vs. Rajeev Bansal, Pr. Commissioner of Income Tax-5, Kolkata Vs. Raghvendera Mohta, Ashok Devichand Jain Vs. Union of India and Others, BMS Tradewings Private Limited Vs. Assistant Commissioner of Income Tax, Circle- 1(1), Raipur
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: NIKHILESH BEGANI
• Keywords: Invalid notice; Reassessment proceedings; Competent authority
• Section: 148; 143(3); 142(1)

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA Nos. 38, 39, 40 & 41/RPR/2025 Ǔनधा[रण वष[ / Assessment Years : 2008-09 to 2011-12 Bhilai Wholesale Consumer Co-operative Stores Ltd. Indira Palace, Bhilai Nagar, Durg- (C.G.)-490 006 PAN: AAAAB2936R ........अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer-1(2), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Nikhilesh Begani, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 23.07.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 24.07.2025 Printed from counselvise.com 2 Bhilai Wholesale Consumer Co-operative Stores Ltd. Vs. ITO-1(2), Bhilai ITA Nos. 38 to 41/RPR/2025 आदेश / ORDER PER BENCH: The captioned appeals preferred by the assessee emanates from the respective orders of the Ld.CIT(Appeals)/NFAC, dated 13.11.2024 for the assessment years 2008-09 to 2011-12 as per the grounds of appeal on record. 2. Both the parties herein conceded that since the facts and issues involved in both these appeals are absolutely similar and identical, therefore, the cases may be taken up together and dispose of vide this consolidated order. 3. In this case, the assessee has filed both legal grounds as well as grounds on merits. The Ld. Counsel for the assessee submitted that he would assail the legal ground first and if the said legal ground is answered affirmative, then the grounds on merits shall become academic only. 4. The legal issue that has been raised by the Ld. Counsel for the assessee is that for A.Y.2008-09, the notice u/s. 148 of the Income Tax Act, 1961 ( for short ‘the Act’) was issued by the Dy. CIT-1(1), Bhilai while reassessment order was passed by the ITO-1(2), Bhilai. That for A.Y.2009- 10, notice u/s. 148 of the Act was issued by the Dy. CIT-1(1), whereas, the reassessment order was passed by the ITO-1(2), Bhilai. Similarly, for Printed from counselvise.com 3 Bhilai Wholesale Consumer Co-operative Stores Ltd. Vs. ITO-1(2), Bhilai ITA Nos. 38 to 41/RPR/2025 A.Y.2010-11, notice u/s. 148 of the Act was issued by the ACIT-1(1), Bhilai and the reassessment order was passed by the ITO-1(2), Bhilai. That for A.Y.2011-12, notice u/s. 148 of the Act was issued by the ITO-1(2), Bhilai and reassessment order was passed by the ACIT-1(1), Bhilai. It was submitted by the Ld. Counsel for the assessee that considering the total income as per the income tax returns for each of the relevant assessment year, notice u/s. 148 of the Act issued by the respective authorities as afore-stated are without valid jurisdiction. To demonstrate the same, the Ld. Counsel for the assessee referred to Instruction No.1/2011 [F. No.187/12/2010-IT(A-I)], dated 31.01.2011 and also revised order in relation to the said instruction. Both are made part of this order and extracted as follows: Printed from counselvise.com 4 Bhilai Wholesale Consumer Co-operative Stores Ltd. Vs. ITO-1(2), Bhilai ITA Nos. 38 to 41/RPR/2025 Printed from counselvise.com 5 Bhilai Wholesale Consumer Co-operative Stores Ltd. Vs. ITO-1(2), Bhilai ITA Nos. 38 to 41/RPR/2025 5. Referring to the above the Ld. Counsel submitted that for A.Y.2008- 09, return of income filed by the assessee was loss of (-) Rs.5,10,675/- and as per the revised order of Notification for non-corporate return upto Rs.10 lacs, the appropriate authority is the ITO. Similary, for A.Y.2009-10, nil return has been filed which is also covered in the bracket upto Rs.10 lacs for non-corporate return and again the competent authority is ITO. For A.Y.2010-11, return of income was filed at loss of (-) Rs.3,09,421/- and again the appropriate authority for non-corporate return upto Rs.10 lacs is ITO. That as per the facts on record, notice u/s. 148 of the Act therefore should have been issued by the ITO, whereas for A.Y.2008-09 and 2009- 10, it was issued by the Dy.CIT-1(1), Bhilai and for A.Y.2010-11, it was issued by the ACIT-1(1), Bhilai and therefore, these authorities did not have valid jurisdiction over the case of the assessee. That again for A.Y.2011-12, the return of income was filed at loss of (-) Rs.13,05,882/- and as per the revised notification for non-corporate return above Rs.10 lacs, it would be ACs/DCs, but in the case of the assessee, notice u/s. 148 of the Act was issued by ITO-1(2), Bhilai who again did not have valid jurisdiction over the assessee. 6. In absence of valid inherent jurisdiction, any action taken by the revenue authorities is bad in law and void ab initio and therefore, any subsequent proceedings thereafter shall be invalid and void ab initio and shall not have any legal validity to stand in itself. In other words, in order Printed from counselvise.com 6 Bhilai Wholesale Consumer Co-operative Stores Ltd. Vs. ITO-1(2), Bhilai ITA Nos. 38 to 41/RPR/2025 to exercise any power by the revenue authorities, they must have valid inherent jurisdiction over the assessee. In the present case, the authorities who had issued notice u/s. 148 of the Act did not have valid jurisdiction over the assessee which therefore, renders the entire reassessment proceedings as invalid and bad in law. 7. In such scenario, we find that the Hon’ble Supreme Court in its recent order passed in the case of Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) had, inter alia, observed that the order passed without jurisdiction is nullity. It was further observed that if a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. Elaborating further, the Hon’ble Apex Court had observed that any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid. Apart from that, it was observed that as there cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment, therefore, any consequential order passed or action taken will be invalid and without jurisdiction. For the sake of clarity, the observations of the Hon’ble Apex Court are culled out as under: “xxxx xxxx xxxx xxxx xxxx 30. If a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised Printed from counselvise.com 7 Bhilai Wholesale Consumer Co-operative Stores Ltd. Vs. ITO-1(2), Bhilai ITA Nos. 38 to 41/RPR/2025 or performed by that authority itself. (Dr. Premachandran Keezhoth Vs. Chancellor, Kannur University). Further, when a statute vests certain power in an authority to be exercised in a particular manner, then that authority has to exercise its power following the prescribed manner (CIT Vs. Anjum M.H. Ghaswala; State of Uttar Pradesh Vs. Singhara Singh). Any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid…………. xxxx xxxx xxxx xxxx xxxx 32. A statutory authority may lack jurisdiction if it does not fulfil the preliminary conditions laid down under the statute, which are necessary to the exercise of its jurisdiction. (Chhotobhai Jethabhai Patel and Co. V. Industrial Court, Maharashtra Nagpur Bench). There cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment. (Superintendent of Taxes Vs. Onkarmal Nathmal Trust). An order passed without jurisdiction is a nullity. Any consequential order passed or action taken will also be invalid and without jurisdiction. (Dwarka Prasad Agrawal V. B.D. Agrawal). Thus, the power of assessing officers to reassess is limited and based on the fulfilment of certain preconditions. (CIT Vs. Kelvinator of India Ltd.)” 8. Further we find that the Hon’ble High Court of Calcutta in the case of Pr. Commissioner of Income Tax-5, Kolkata Vs. Raghvendera Mohta, ITAT/51/2025, IA No. GA/1/2025, GA/2/2025, dated 5th May, 2025 on the similar issue had held and observed as follows: “The assessee preferred appeal before the learned Tribunal challenging the order passed by the Commissioner of Income Tax (Appeals)-10, Kolkata [CIT(A)] dated 26.9.2017. One of the grounds urged before the learned Tribunal was that the Assessing Officer, who passed the assessment order did not have jurisdiction over the case of the assessee and, therefore, the notice as well as the assessment order are bad in law. The learned Tribunal took note of the facts and circumstances of the case and found that the assessee filed its return of Printed from counselvise.com 8 Bhilai Wholesale Consumer Co-operative Stores Ltd. Vs. ITO-1(2), Bhilai ITA Nos. 38 to 41/RPR/2025 income declaring the income to be nil. Subsequently, notice under section 143(2) was issued on 10.9.2015 and notice under section 142(1) dated 13.6.2016 was issued along with the questionnaire. The assessee contended that the notices were without jurisdiction and relied upon section 120 of the Act. In this regard, the assessee referred to the notification issued by the CBDT in Instruction No.1 of 2011. The learned Tribunal took into consideration the facts of the case and found that the assessment has been framed by the Assessing Officer, who inherently lacks jurisdiction to do so. The learned Tribunal took note of the decision of a Co- ordinate Bench of the learned Tribunal in the case of Bhagyalaxmi Conclave (P) Ltd. vs. DCIT dated 3.2.2021. Apart from other decisions and allowed the assessee's appeal, the revenue had challenged the order passed in the case of Bhagyalaxmi Conclave (P) Ltd. before this court in ITAT/221/2022 etc. and by a judgment reported in 2022 (12) TMI 1514, the appeal filed by the department was dismissed wherein one of the questions framed is identical to the substantial questions of law suggested by the revenue in the instant case. Thus, we find that the learned Tribunal was right in allowing the assessee' appeal and setting aside the order passed by the Assessing Officer on the ground of lack of inherent jurisdiction. For the above reason, the appeal is dismissed and the substantial questions of law are answered against the revenue.” 9. Further, the Hon’ble High Court of Bombay in the case of Ashok Devichand Jain Vs. Union of India and Others, Writ Petition No. 3489 of 2019, dated 08.03.2022 has dealt with the similar issue and observed as follows: “5. The notice under section 148 of the Act is jurisdictional notice and any inherent defect therein is not curable. In the facts of the case, notice having been issued by an officer who had no jurisdiction over the Petitioner, such notice in our view, has not been issued validly and is issued without authority in law.” Printed from counselvise.com 9 Bhilai Wholesale Consumer Co-operative Stores Ltd. Vs. ITO-1(2), Bhilai ITA Nos. 38 to 41/RPR/2025 10. Further, ITAT, Raipur Bench in the case of BMS Tradewings Private Limited Vs. Assistant Commissioner of Income Tax, Circle- 1(1), Raipur, ITA No. 539/RPR/2024, dated 30.06.2025 on the similar issue has held and observed as follows: “16. We, therefore, in terms of our aforesaid observations, are of the considered view that assessment order passed u/s. 143(3) dated 12.12.2019 by ACIT, Circile-2(1), Raipur, on the basis of proceedings initiated vide an invalid notice issued u/s.143(2) dated 09.08.2018 by ACIT, Circle-2(1), Raipur, who was not vested with valid jurisdiction over the case of the assessee, in contravention to the instructions issued by the CBDT and further communication by the CCIT, Raipur, cannot be sustained and therefore, the same is liable to be quashed, thus, we do so.” 11. Respectfully following the aforesaid judicial pronouncements, we hold that respective reassessment orders passed by the revenue authorities for A.Ys. 2008-09 to 2011-12 are held to be without valid jurisdiction, bad in law hence quashed. 12. Since the respective reassessment orders for each of the relevant assessment years are quashed thereafter all the other proceedings becomes non-est in the eyes of law. As the legal issue has been answered in favour of the assessee therefore the grounds on merits becomes academic only. 13. As per the aforesaid terms the grounds of appeals raised by the assessee stands allowed. Printed from counselvise.com 10 Bhilai Wholesale Consumer Co-operative Stores Ltd. Vs. ITO-1(2), Bhilai ITA Nos. 38 to 41/RPR/2025 14. In the result, all the appeals of the assessee are allowed. Order pronounced in the open court on 24th day of July, 2025. Sd/- Sd/- ARUN KHODPIA PARTHA SARATHI CHAUDHURY (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 24th July, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ /The Appellant. 2. Ĥ×यथȸ /The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. Printed from counselvise.com "