RAVI KARAN KHARBANDA,DELHI V. ACIT, CIRCLE-50(1), DELHI

ITA 390/DEL/2024

AI Insights

The case revolves around the legal challenge against the jurisdictional authority of the Income Tax Officer (ITO) and the Assistant Commissioner of Income Tax (ACIT) in assessing the income of the late Shri Ravi Karan Kharbanda for the Assessment Year 2017-18. The primary contention was that the ITO assumed jurisdiction improperly, as the pecuniary jurisdiction for the income declared (over Rs. 37.42 lakhs) should have rested with the ACIT, following CBDT Instructions No. 1 of 2011. The Tribunal examined whether the procedural requirements for jurisdictional transfer were met, particularly the absence of a section 127 order, which is necessary for transferring jurisdiction between different levels of tax officers.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 776608 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2025
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 01-02-2024
• Other Referred Cases: M/s Boutique International Pvt Ltd vs ITO ITA No. 831/DEL/2017 dated 18.12.2020, ITO Vs. NVS Builders Pvt Ltd ITA No. 3729/DEL/2012 dated 08.03.2018
• Laws Referred To: Income Tax Act
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: R. C. RAI
• Section: 143(3)

Judgement Text

"Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 390/DEL/2024 [A.Y. 2017-18] Late Shri Ravi Karan Kharbanda Vs. The A.C.I.T. Through L/H Shri Sunil Kharbanda Circle – 50(1) C/O R.C. Rai & Associates Delhi 203, Akash Deep Building, 26-A, Barakhamba Road, New Delhi PAN – ADQPN 5867 M (Applicant) (Respondent) Assessee By : Shri R.C. Rai, CA Department By : Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing : 15.09.2025 Date of Pronouncement : 17.09.2025 ORDER PER NAVEEN CHANDRA, A.M:- This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 07.12.2023 for A.Y 2017-18 2. The assessee’s main legal argument is that the assumption of pecuniary jurisdiction is illegal and bad in law as the returned income Printed from counselvise.com ITA No. 390/DEL/2024 [A.Y. 2017-18] Ravi Karan Kharbanda Page 2 of 5 was more than Rs. 30 lakhs and notice was issued by ITO and assessment framed u/s 143(3) of the Act by the DCIT/ACIT which is not sustainable in the eyes of law. 3. At the very outset of the opening of the arguments, the ld. counsel for the assessee submitted that as per CBDT Instructions No. 1 of 2011 dated 31.01.2011, jurisdiction for assessment vested with the Income Tax Officer upto Rs. 20 lakhs and where income declared returned by a non-corporate assessee was above Rs. 20 lakhs, the pecuniary jurisdiction would be of DC/ACIT. Since the declared income in this case is above Rs. 37.42 lakhs, the pecuniary jurisdiction lies with DCIT/ACIT. In the instant case, the ITO 50(1) issued the notice u/s 143(2) of the Act assuming the jurisdiction and subsequently, the assessment order u/s 143(3) was passed by the ACIT 50(1), Delhi. The correct AO has not initiated the assessment proceedings, hence the same is invalid and the whole proceedings becomes illegal and unsustainable in law. The ld. counsel for the assessee relied upon a catena of judgement in support of his contentions, including : (i) M/s Boutique International Pvt Ltd vs ITO ITA No. 831/DEL/2017 dated 18.12.2020 (ii) ITO Vs. NVS Builders Pvt Ltd ITA No. 3729/DEL/2012 dated 08.03.2018 Printed from counselvise.com ITA No. 390/DEL/2024 [A.Y. 2017-18] Ravi Karan Kharbanda Page 3 of 5 4. Per contra, the ld. DR relied upon the orders of the authorities below. 5. We have heard the rival submissions and have perused the relevant material on record. We find that Income tax return for AY 2017-18 was filed on 05.11.2017 at Rs. 37,42,700/- which is more than Rs. 30 lakhs. As per the Instruction no 1/2011, the correct pecuniary jurisdiction of cases of Return above 20 lakhs in Mofussail areas and Rs 30 lakh in Metro cities, lies with the ACIT. We find that the assessment proceedings have been initiated by the ITO 50(1) by issuing notice u/s 143(2) dated 21.08.2018 while the assessment u/s 143(3) was completed by the ACIT, Circle 50(1), New Delhi on 26.12.2019. 6. The ld DR however, could controvert that there does not exist any order u/s 127 for transferring the file from an ITO, with whom the pecuniary jurisdiction lies, to the ACIT, Circle 50(1). 7. We have been told about the subsequent Instruction no 6/2011 dated 8.4.2011 empowering the CIT to adjust the monetary limit for the ITO/DCITs. The ld AR, however submitted that the said Instruction does allow monetary adjustment but the same is limited to adjust the limits by an amount of 5 lakhs and since the assessee’s return was only of Rs 37.42 lakh, even after the said Instruction is applied, the pecuniary Printed from counselvise.com ITA No. 390/DEL/2024 [A.Y. 2017-18] Ravi Karan Kharbanda Page 4 of 5 jurisdiction would not change from DCIT to ITO. We also find that the neither the Assessing Officer nor the ld DR could controvert the fact that no order u/s 127 was passed for transferring the jurisdiction from ITO to the DCIT. In the above factual matrix, we are of the considered opinion that the notice u/s 143(2) of the Act as well as the assessment u/s 143(3), which has been issued/completed by the DCIT, has been done without assuming proper jurisdiction by way of any order u/s 127 of the Act rendering the whole proceedings illegal, unsustainable in law and void ab initio. We are fortified in our view by the Hon’ble Bombay High Court in the case of M/s Boutique International Pvt Ltd vs ITO (supra) which dealt with identical facts. Ground on this count is allowed. 8. Since we have held the assessment proceedings to be void ab initio, we do not dwell into the merits of the case. 9. In the result, the appeal of the assessee in ITA No. 390/DEL/2024 is allowed. The order is pronounced in the open court on 17.09.2025. Sd/- Sd/- [YOGESH KUMAR U.S.] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 17th SEPTEMBER, 2025. Printed from counselvise.com ITA No. 390/DEL/2024 [A.Y. 2017-18] Ravi Karan Kharbanda Page 5 of 5 VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order . 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 3. Date on which the typed draft Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes for xerox 12. The date on which the file goes for endorsement 13. The date on which the file goes to the Superintendent for checking 14. The date on which the file goes to the Assistant Registrar for signature on the Tribunal order 15. Date on which the file goes to the dispatch section 16. Date of Dispatch of the Order Printed from counselvise.com "