Principal Commissioner of Income Tax-5, Kolkata v. Raghvendra Mohta

1. FACTS OF THE CASE

After condoning Revenue’s explained delay of 117 days, the Court considered its section260A appeal against ITAT’s 8 April 2024 order in ITA2416/Kol/2017 for AY2014–15. The assessee had returned nil income. The dispute concerned the AO’s jurisdiction, notices under sections143(2) and142(1), and the 29 December 2016 assessment. Revenue’s proposed question also referred to Rs.42,27,500 under section68 and Rs.1,48,657 under section69C relating to alleged penny-stock accommodation entries.

Source: Opening and questions, PDF pp.1–2; notice history pp.2–3

2. DISCUSSION BY THE COURT

The Tribunal found inherent lack of jurisdiction after considering section120 and CBDT Instruction1/2011. The High Court noted that the Tribunal had followed Bhagyalaxmi Conclave and that Revenue’s appeal in that case, ITAT221/2022 etc., had been dismissed in the judgment reported at 2022 (12) TMI1514 on an identical question. It therefore upheld setting aside this assessment for lack of inherent jurisdiction.

Source: Reasons, PDF pp.2–3

3. JUDICIAL DECISION

Revenue’s appeal was dismissed and the substantial questions of law answered against Revenue. The Tribunal’s jurisdictional annulment was upheld.

Source: Concluding reasons and disposition, PDF p.3

4. OUTCOME

Assessee-favourable final jurisdictional result. The Court did not decide whether the alleged penny-stock gain was genuine or substantively exempt, nor did it order a fresh assessment in this judgment.

Source: Questions p.2; operative reasoning p.3

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

Jurisdiction is the decisive ground

The High Court sustained annulment for inherent lack of jurisdiction, following the earlier decision on an identical question. Preserve that basis when using the case: the result is not a merits ruling accepting Ashika Credit Capital share transactions or rejecting the evidence behind the additions.

Source: PDF p.2 · PDF p.3

Do not turn Revenue’s proposed question into the rule

The proposition that Instruction1/2011 merely distributes work and PAN jurisdiction validates the notice appears in Revenue’s question. The Court answered against Revenue. A sound comparison requires the actual allocation instruction, return and officer details; this short order does not set out every monetary threshold or an exhaustive jurisdiction test.

Source: PDF p.2 · PDF p.3

Separate delay relief from success in the appeal

Condonation of117 days allowed Revenue’s challenge to be considered, but the appeal still failed. Equally, the judgment contains no fresh-assessment direction. Procedural access, jurisdictional validity and underlying tax merits are separate matters, and none should be inferred from the other.

Source: PDF p.1 · PDF p.3