ITAT Mumbai Expands Remand to Examine Jurisdictional Validity of Reassessment

The “B” Bench of the Income Tax Appellate Tribunal, Mumbai, in the case of Nimish Vivek Juvekar (AY 2015–16), held that jurisdictional challenges to reassessment must be examined prior to adjudicating the merits and accordingly expanded the scope of remand to the Assessing Officer.

Background: Ex Parte Assessment Set Aside by CIT(A)

Reassessment proceedings were initiated under Sections 148A(b), 148A(d), and 148 based on risk management inputs. The assessment was ultimately completed under Sections 147 read with 144, making additions including short-term capital gains arising from redevelopment of property, gains on securities, and unexplained credit card payments. Before the CIT(A), the assessee explained non-compliance on the ground that he was residing in the United Kingdom on a student visa and lacked local support due to personal circumstances. Accepting this as a bona fide explanation, the CIT(A), invoking amended powers under Section 251(1)(a) (effective 01.10.2024), set aside the ex parte assessment and restored the matter to the Assessing Officer for de novo adjudication.

Tribunal: Jurisdictional Issues Must Be Decided First

Before the ITAT, the assessee raised additional legal grounds challenging:

1. Limitation under the amended reassessment regime post–01.04.2021, relying on the Supreme Court ruling in Deepak Steel and Power Ltd.
2. Validity of notice under Section 151A and CBDT notifications mandating faceless issuance
3. Alleged absence of independent application of mind (borrowed satisfaction)

The Tribunal admitted these additional grounds, relying on the principle laid down in National Thermal Power Corporation Ltd. v. CIT (229 ITR 383, SC), that pure questions of law can be raised at any stage.

However, the Bench observed that the determination of limitation and jurisdiction required verification of foundational facts, including:

1. Whether any notice under the old regime was issued before 31.03.2021
2. Whether the impugned notice dated 06.04.2022 was issued pursuant to the Supreme Court’s decision in Union of India v. Ashish Agarwal
3. Whether procedural requirements under Section 151A and relevant CBDT notifications were complied with

Since the assessment had already been set aside, the Tribunal held that the ends of justice would be served by restoring even the jurisdictional objections to the Assessing Officer.

Directions Issued by ITAT

The Assessing Officer has been directed to:

1. First decide the legal validity of the notice under Section 148, including limitation and applicability of judicial precedents.
2. Examine compliance with Section 151A and the Faceless Assessment Scheme.
3. If jurisdiction is upheld, adjudicate the matter on merits after granting adequate opportunity to the assessee.

All issues were kept open, and the appeal was allowed for statistical purposes.