Vikas Jhuntra and Sons HUF vs Assistant Commissioner of Income Tax

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 16.12.2025, for Assessment Year 2019-20.

Shri Ankit Kumar, appearing on behalf of the assessee, submits that the assessee is an HUF. The assessee filed its return of income for A.Y. 2019-20 on 21.06.2019 declaring income of Rs.7,34,500/-. During the period relevant to the assessment year under appeal, the assessee had made a donation of Rs.2,00,000/- to a political party and had claimed deduction u/s 80GGC of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The case of the assessee was reopened and notice u/s.148A(b) of the Act was issued to the assessee on 29.03.2023. The solitary reason for reopening the assessment was that the donation made by the assessee to the political party, Rashtriya Samajwadi Party (Secular) was allegedly bogus. The assessee filed reply to the said notice on 05.04.2023 and on 10.04.2023, the objections filed by the assessee were rejected by the Assessing Officer (AO). On the same date notice u/s.148 of the Act was issued to the assessee by the Assistant Commissioner of Income Tax (ACIT), Circle 49(1), Delhi. Whereas, as per CBDT Instruction No. 1/2011 dated 31.01.2011, the notice u/s.148 of the Act and the assessment, thereafter, should have been made by the Income Tax Officer. The ACIT had no jurisdiction to issue notice where the income declared by a non-corporate assessee is up to Rs.20,00,000/- (in metro cities). The notice u/s.148 of the Act dated 10.04.2023 issued by the ACIT and the assessment thereof is without jurisdiction, hence, invalid.

Per contra, Shri Manoj Kumar, representing the Department, strongly supported the impugned order and validity of notice u/s.148 of the Act. The ld. DR submits that there was no infirmity in the issuance of notice u/s.148 of the Act and the same has been validly issued by the AO.

Both sides heard. The short issue for consideration in the instant appeal is; Whether in facts of the case, the notice issued u/s.148 of the Act dated 10.04.2023 (at page 89 of the paper book) and the assessment made thereon is valid in light of CBDT Instruction No.1/2011 (supra). The CBDT vide aforesaid instruction has specified monetary limits for assigning cases to ITOs and ACs/DCs. The relevant extract of the said instruction is reproduced herein below:-

Undisputedly, the assessee had filed return of income u/s.139(1) of the Act on 21.06.2019 declaring total income of Rs.7,34,500/-, i.e., less than the monetary limit of Rs.20,00,000/- specified under CBDT Instruction No.1/2011 dated 31.01.2011 (supra). Even in the return of income filed by the assessee in response to notice u/s 148 of the Act, the assessee had declared total income of Rs.7,34,500/-. The said return of income is at page 95 of the paper book. Thus, in light of aforesaid CBDT Instruction, the notice u/s 148 of the Act ought to have been issued by the ITO. Since, in the present case the notice has been issued by the ACIT, the same is without jurisdiction, hence, void ab initio. I find that the Division Bench of the Tribunal in the case of Aashiyana Infrastructure Development Pvt. Ltd. vs. DCIT in ITA No.8472/Del/2019, decided on 04.07.2025, in similar facts, had held notice issued u/s 148 of the Act to be defective and void ab initio. Thus, in light of the above undisputed facts, I hold that the notice issued u/s 148 of the Act by the ACIT is without jurisdiction. Consequently, the proceedings arising from such defective notice are vitiated and hence, quashed.

In the result, appeal of the assessee is allowed.