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

MA 28/RPR/2025

AI Insights

The case involves the Income Tax Officer-1(2), Bhilai as the applicant and Bhilai Wholesale Consumer Co-operative Stores Ltd. as the respondent. The core issue was the validity of reassessment orders issued for the assessment years 2008-09 to 2011-12. The Tribunal initially found that the notices under section 148 of the Income Tax Act, 1961, were issued by authorities who did not have valid jurisdiction over the assessee, rendering the reassessment proceedings invalid. The Revenue's miscellaneous applications were essentially a request for a review of this decision, which the Tribunal dismissed, citing that such a review was not permissible under the Act.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 845122 (ITAT-RAIPUR)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-03-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 19-12-2025
• 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: R.B DOSHI
• 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 AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER M.A. Nos. 27, 28, 29 & 30/RPR/2025 (Arising out of ITA Nos. 38, 39, 40 & 41/RPR/2025) Ǔनधा[रण वष[ / Assessment Years : 2008-09, 2009-10, 2010-11 & 2011-12 The Income Tax Officer-1(2), Bhilai (C.G.) ……….. आवेदक/Applicant बनाम / V/s. Bhilai Wholesale Consumer Co-operative Stores Ltd. Indira Palace, Bhilai Nagar, Durg- (C.G.)-490 006 PAN: AAAAB2936R ……Ĥ×यथȸ / Respondent Assessee by : Shri R.B Doshi, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 20.03.2026 घोषणा कȧ तारȣख / Date of Pronouncement : 20.03.2026 Printed from counselvise.com 2 MA Nos. 27, 28, 29 & 30/RPR/2025 A.Ys. 2008-09 to 2011-12 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM: The captioned miscellaneous applications have been preferred by the Revenue arising out of the impugned orders of the Tribunal passed in ITA Nos. 38, 39, 40 & 41/RPR/2025, dated 24.07.2025 for assessment years 2008-09 to 2011-12 u/s.254(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The legal issue which the Tribunal had adjudicated in the impugned orders was that notice u/s.148 of the Act was issued by Dy.CIT-1(1), Bhilai while the reassessment order was framed by the ITO-1(2), Bhilai u/s.143(3) r.w.s 147/148 of the Act. In other words, while completing the reassessment by the ITO-1(2), Bhilai u/s.143(3) r.w.s 147/148 of the Act, he had not issued any notice u/s.148 of the Act. In this backdrop, it was held and observed by the Tribunal as follows: “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. Similarly, 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 Printed from counselvise.com 3 MA Nos. 27, 28, 29 & 30/RPR/2025 A.Ys. 2008-09 to 2011-12 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 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 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. Printed from counselvise.com 4 MA Nos. 27, 28, 29 & 30/RPR/2025 A.Ys. 2008-09 to 2011-12 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 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 Printed from counselvise.com 5 MA Nos. 27, 28, 29 & 30/RPR/2025 A.Ys. 2008-09 to 2011-12 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.” 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, Printed from counselvise.com 6 MA Nos. 27, 28, 29 & 30/RPR/2025 A.Ys. 2008-09 to 2011-12 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. 14. In the result, all the appeals of the assessee are allowed.” 3. At the time of hearing, we have heard the submissions of the parties herein and also carefully considered the contents in the miscellaneous application filed by the Revenue and therein, the contents are akin to contemplating for a review of the decision taken by the Tribunal which is therefore, not permissible within the ambit of Section 254(2) of the Act. Taking guidance from the judicial pronouncements viz. (i) T.S. Balaram, ITO v. Volkart Bros., (1971) 82 ITR 50 (SC); (ii) Commissioner of Income Tax (IT-4) Vs. Reliance Telecom Ltd., (2021) 133 taxmann.com 41 (SC) and (iii) CIT Vs. Ramesh Electric & Trading Company reported as 203 ITR 497 (Bom.), it is held that the adjudication of the Tribunal is confined to rectification of the mistake which are apparent from record and nothing more. Section 254(2) of the Act does not allow the Tribunal to Printed from counselvise.com 7 MA Nos. 27, 28, 29 & 30/RPR/2025 A.Ys. 2008-09 to 2011-12 review its own order, to revisit the facts on record, to allow for any verification of facts through long drawn process of arguments and counter arguments by the parties; what can only be rectified is an apparent mistake, if any, in its order and nothing further. 4. That as per the contents in the miscellaneous application, the Revenue has placed reliance on the judgments viz. (i) Harish Kumar Chhabada vs. Pr.CIT, TaxC No.138 of 2023, order dated 08.10.2025 (Hon’ble High Court of Chhattisgarh) ; (ii) DCIT (Exemption) Vs. Kalinga Institute of Industrial Technology 454 ITR 583 (SC) and (iii) ACIT vs. Saurashtra Kutch Stock Exchange Ltd. reported in (2008) 305 ITR 227 (SC). These decisions have been already considered in the order passed by the Third Member Bench, in the case of ACIT Vs. Ravi Sherwani, MA No.107/RPR/2023, A.Y.2013-14, dated 04.02.2026 wherein the Hon’ble Vice President (Pune Zone) [as Third Member] had upheld the decision of the Hon’ble Judicial Member dismissing the miscellaneous application filed by the Revenue wherein the Revenue had filed the miscellaneous application placing reliance on the abovementioned decisions and it was held by the Third Member Bench that the said decisions did not constitute the periphery of jurisdiction as assigned to the Tribunal u/s. 254(2) of the Act. Therefore, contentions made in the present miscellaneous application Printed from counselvise.com 8 MA Nos. 27, 28, 29 & 30/RPR/2025 A.Ys. 2008-09 to 2011-12 is nothing but repeated arguments by the Ld. Sr. DR which had already been overturned by the decision of the Third Member Bench. 5. In the present case, the Tribunal had provided relief to the assessee in its own wisdom by holding that the A.O completing the reassessment did not have valid jurisdiction and hence, reassessment orders were held bad in law, therefore, quashed. That the Revenue in the garb of filing the captioned miscellaneous applications is only seeking review of the decision of the Tribunal which is not permissible and beyond the jurisdiction as envisaged u/s. 254(2) of the Act. Hence, we hold that the miscellaneous applications preferred by the Revenue being devoid of any merits are dismissed. 6. In the result, all the miscellaneous application filed by the Revenue are dismissed. Order pronounced in the open court on 20th day of March, 2026. Sd/- Sd/- AVDHESH KUMAR MISHRA PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 20th March, 2026. 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.) Printed from counselvise.com 9 MA Nos. 27, 28, 29 & 30/RPR/2025 A.Ys. 2008-09 to 2011-12 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 "