6 Sections 147 and 148 – Reassessment – A. Y. 2008-09 – Notice for reassessment by authority other than authority normally assessing assessee – Not mere irregularity or curable defect – Defective issuance of notice and not service of notice- Notice not valid – To be quashed

Shirishbhai Hargovandas Sanjanwalla vs.
ACIT; 396 ITR 167(Guj):

For the A. Y. 2008-09, the assessee’s return
was processed u/s. 143(1) of the Act, 1961 by the ACIT Circle 4(2) who is the
jurisdictional Assessing Officer of the assessee. Subsequently, ACIT Circle
5(2) issued a notice u/s. 148 for reopening the assessment. According to the
Department, as the assessee was described as an agriculturist in a sale deed,
having a particular residential address, his assessment was made by the ACIT
Circle 5(2). The assessee filed a writ petition challenging the reassessment
notice.

 The Gujarat High Court allowed the writ
petition and held as under:

 “i)   In administrative or
quasi judicial matters, where exercise of powers is well regulated and segregated
through rules and regulations or administrative instructions, no authority or
officer who is not vested with the jurisdiction of the particular nature can
exercise such powers which would be purely a case of lack of authority failing
which there would be total anarchy and any officer positioned at any place may
choose to exercise jurisdiction over any assessee.

 ii)   It was a defective
issuance of notice and not a service of notice as it was issued by an authority
who was not competent. The Department ignored the fact that the assessee had
been regularly assessed year after year and originally was within the
jurisdiction of Income-tax Circle 9 and after restructuring, the ACIT Circle
4(2). Therefore, the ACIT Circle 5(2) had no jurisdiction to assess and issue
the notice for reassessment. It was not a mere irregularity or a defect which
could have been cured, but a question of jurisdiction of the authority to
reopen the assessment. The notice was to be quashed.“