The main legal point established in the judgment is that the Assessing Officer's territorial jurisdiction is determined by the relevant provisions of the Income Tax Act, 1961, and is not solely based on pecuniary limits for distribution of work among officers.

JUDGMENT :

1. Heard Sri Suyash Agarwal, learned counsel for the petitioner, Sri Gaurav Mahajan, learned Senior Standing Counsel for the respondent no.2 and Sri Sudarshan Singh, learned counsel for respondent no.3.

2. This writ petition has been filed praying for the following relief:-

“(i) Issue writ, order or direction in the nature of certiorari quashing the notice dated 31.3.2021 issued under Section 148 of the Act, for A.Y. 2017-18 issued by the Income Tax Officer ITO-2(1), Moradabad, respondent no.1(Annexure no.7).

(ii) Issue writ, order or direction in the nature of certiorari quashing the order dated 13.9.2021 passed by Income Tax Officer ITO-2(1), Moradabad respondent no.1, rejecting the objection of the petitioner (Annexure no.13).

(iii) Issue writ, order or direction in the nature of Prohibition restraining the respondent no. 1 from completing the reassessment proceeding u/s 148 of the Act, for A.Y. 2017-18.”

3. Briefly stated facts of the present case are that for the assessment year in question i.e. 2017-18, the petitioner, which is a corporate entity, filed its return of income on 11.10.2017 with the Income Tax Officer (ITO-2(1), Moradabad disclosing total income of Rs. 32,57,900/. It has been admitted by the learned counsel for the petitioner before us that ITO Ward-2(1) is the Assessing Officer who has territorial jurisdiction over the petitioner.

Facts.

4. The case of the petitioner is that since monetary limit fixed for assessment by the ITO for return is upto Rs. 15 lacs and if it is above Rs. 15 lacs, the assessment was to be made by Assistant/Deputy Commissioner, therefore, for that reason the assessment for the Assessment Year 2017-18 was completed by the Assistant Commissioner of Income Tax, Moradabad (ACIT) vide assessment order dated 26.11.2019 under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act, 1961). Therefore, the notice under Section 148 of the Act would have been issued only by the ACIT-2, Moradabad and not by the ITO Ward-2(1), Moradabad.

5. From the record, it appears that thereafter, the ITO, Ward-2(1) received certain information from DDIT (Investigation), Unit 7(4), New Delhi. It came to light in the search conducted under Section 132A of the Act at the premises of Mr. Mohit Garg and others on 11.03.2018 and in subsequent investigations, which, according to the respondent-department revealed that an accommodation purchase entry of Rs.20,32,46,098/-which was not shown by the petitioner. Based on this information, the ITO Ward-2 issued a notice under Section 148 of the Act, 1961 to the petitioner and supplied the reasons recorded for issuance of the notice. The petitioner submitted objection to it which was rejected by order dated 13.09.2021 passed by the ITO-2(1), Moradabad. Being aggrieved, the petitioner has filed the present writ petition, challenging the notice dated 31.03.2021 under Section 148 as well as the order dated 13.09.2021 rejecting the objection.

Submission:

6. The only submission of learned counsel for the petitioner is that the impugned notice under Section 148 of the Act, 1961 issued by the respondent No.1 [ITO-2(1)] is without jurisdiction inasmuch as the ITO Ward 2(1) is not the jurisdictional assessing officer for the Assessment Year 2017-18. He further submits that jurisdictional assessing officer for the Assessment Year 2017-18 is the ACIT, Range-2, Moradabad.

Therefore, the impugned notice is without jurisdiction and consequently it cannot be proceeded with by the respondent No.1. For the same reason, the impugned order rejecting the objection, also deserves to be quashed along with the impugned notice under Section 148.

7. Learned Central Government Standing Counsel and the learned standing counsel for the Income Tax Department -respondent No.1 and 2 jointly supported the impugned notice and the order rejecting the objection.

Discussion and findings:

8. We have carefully considered the submission of the learned counsel for the parties and perused the