In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Lucknow Bench, has held that a notice issued under Section 148 of the Income Tax Act by a non-jurisdictional Assessing Officer (AO) is void ab initio, even if based on Annual Information Return (AIR) data. The Tribunal clarified that the mere mention of an address in a property sale deed does not confer jurisdiction upon the AO unless the assessee is shown to be a resident or to have a place of business within that jurisdiction. The order, dated 24 July 2025, came in the case of Shri Rajesh Kumar Verma vs. ITO, Ward-3(2), Lucknow, and reaffirms the importance of adhering to statutory provisions governing territorial jurisdiction in reassessment proceedings.
Case Title:
Shri Rajesh Kumar Verma vs. Income Tax Officer, Ward-3(2), Lucknow
Court:
Income Tax Appellate Tribunal (ITAT), Lucknow Bench
Order Date:
24 July 2025
Assessment Year:
2018–19
Appeal No.:
ITA No. 132/LKW/2025
Coram:
Shri Pramod Kumar (Vice President)
Shri A.K. Singh (Accountant Member)
Background:
- Shri Rajesh Kumar Verma (the assessee), a resident of Kanpur, was issued a notice under Section 148 by the ITO, Ward-3(2), Lucknow, based on Annual Information Return (AIR) data regarding the purchase of immovable property in Lucknow.
- The property was jointly registered in his name and the address in the sale deed was in Lucknow, but the assessee’s PAN jurisdiction and residential address were in Kanpur.
- The AO issued the notice and completed the assessment without transferring the case or seeking prior jurisdictional clarification.
Grounds Raised by the Assessee:
- The notice under Section 148 was issued without jurisdiction, as the AO at Lucknow was not the correct officer per the Income Tax Act.
- The entire assessment was void ab initio due to lack of jurisdiction.
- The property transaction being located in Lucknow did not confer jurisdiction upon the AO without following the procedure under Section 124.
Revenue’s Arguments:
- The AIR information regarding the high-value transaction in Lucknow was sufficient to initiate reassessment proceedings.
- The address in the sale deed indicated a connection to the Lucknow jurisdiction.
Tribunal’s Findings:
- The ITAT held that the jurisdiction of an AO is governed by Section 124 of the Income Tax Act, which relies on the assessee’s place of residence or business, not the location of the property.
- The AO did not make any inquiry to ascertain the actual place of residence of the assessee.
- The address in the property deed was not enough to assume jurisdiction without verifying the assessee’s PAN jurisdiction.
- No effort was made to transfer the case under Section 127, nor was the assessee given any opportunity to raise objections under Section 124(3).
Decision:
- The ITAT quashed the reassessment proceedings, holding that the notice under Section 148 was issued without legal jurisdiction.
- Consequently, the entire assessment order passed by the ITO, Ward-3(2), Lucknow, was declared null and void.
Conclusion:
This case reinforces the principle that jurisdictional norms must be strictly followed, and administrative convenience or third-party data (such as AIR) cannot override statutory requirements.