" \n IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “J”, MUMBAI \n \nBEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER \n AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER \n \n \n ITA No. 4194/Mum/2024 \n Assessment Year 2017-18 \n \nJoyce Stanislaus Aranha \n \nE \n1301, \nMayfair \nMeridian, \nCeasar Road, Andheri West, \nMumbai – 400102. \n \nPAN: AAFPA 5598 J \nVs. \n \nITO, Ward – 10(1)(3), \nAaykar \nBhavan, \nMumbai – 400058. \n \n (Appellant) (Respondent) \n \n \nPresent for: \nAssessee by \n: Shri Ashok Bansal \nRevenue by \n \n: Shri Asif Karmali, Sr. DR \n \nDate of Hearing \n: 14.01.2025 \nDate of Pronouncement \n: 21.03.2025 \n \nO R D E R \n \nPER AMARJIT SINGH, ACCOUNTANT MEMBER: \n \n \nThe appeal of the assessee for the assessment year 2017-18 \nis directed against the order dated 21.06.2024 passed by the \nNational Faceless Appeal Centre (NFAC), Delhi. The assessee has \nraised the following grounds of appeal: \n“1. The lower authorities have erred in making addition to the appellant’s \nincome/upholding the addition amounting to Rs. 1,89,52,120/- on \naccount of denied deduction u/s 54F. \n2. Without prejudice, the assessment is without jurisdiction as the notice \nu/s 143(2) was issued by Income Tax Officer whereas in view of the \nreturned income, the jurisdiction was with Deputy Commissioner of \nIncome Tax and the consequent assessment was also completed by the \nIncome Tax Officer instead of Deputy Commissioner of Income Tax. \n\n \nITA No. 4194/Mum/2024 \n Joyce Stanislaus Aranha \nA.Y. 2017-18 \n \n \n2 \n3. The learned Commissioner of Income Tax (Appeals) has erred in \ndeciding the appeal without affording personal hearing to the appellant \nas mandated by Rule 12(3) of the faceless appeal scheme. \n4. The learned Commissioner of Income Tax (Appeals) has erred in not \ndeciding the appeal within time as per section 250(6A).” \n2. \nFact in brief is that assessment order u/s 143(3) of the Act \nwas passed on 25.12.2019 and claim of expenditure incurred on \nthe improvement of the new asset to the amount of Rs. \n1,89,07,065/- was disallowed. \n3. \nThe assessee filed appeal before the ld. CIT(A). The ld. CIT(A) \nhas dismissed the appeal of the assessee. \n4. \nHeard both the sides and perused the material on record. The \nassessee has earned long term capital gain of Rs. 34,69,30,925/- \non sale of shares and offered long term capital gain of Rs. \n24,94,48,811/- for tax during the year under consideration after \nclaiming deduction of Rs. 9,24,82,114/- u/s 54F of the Act for \nmaking investment in the purchase of a new house. The assessing \nofficer noticed that the new house purchased also comprised an \namount of Rs. 1,89,07,065/- as expenditure incurred as cost of \nimprovement relating to the house purchased. The assessing \nofficer was of the view that the residential house purchased was \nonly 10 years old therefore, the assessee cannot take the ground \nthat house was not in a good condition. Further, the AO stated \nthat assessee cannot spent the amount out of amount deposited in \ncapital gain account for making improvement or renovation of the \n\n \nITA No. 4194/Mum/2024 \n Joyce Stanislaus Aranha \nA.Y. 2017-18 \n \n \n3 \nnew asset. Before us, the assessee also referred the case of Mrs. \nRahana Siraj vs CIT, Bangalore (2015) 58 taxmann.com 333 \n(Karnataka) wherein it is held that alternation / modification and \nimprovement of newly house purchased is eligible for deduction \nu/s 54F of the Act. The assessee has also submitted that in the \ncase of the assessee the notice u/s 143(2) was issued by the \nIncome Tax Officer without jurisdiction as the case of the assessee \nfall under the jurisdiction of Assistant Commissioner of Income \nTax / Deputy Commissioner of Income Tax in view of the returned \nincome. He further submitted that in the case of the assessee even \nthe assessment order u/s 143(3) of the Act was passed by the ITO \nand the ITO has no jurisdiction over the case of the assessee \nbecause of the monetary limit fixed by the CBDT vide Instruction \nNo. 1/2011 dated 31.01.2011 as per which the jurisdiction over \nthe case of the assessee lies with the ACIT not with the Income Tax \nOfficer. In this regard, the assessee has also referred the decision \nof Hon’ble Bombay High Court in the case of Ashok Devichand \nJain vs Union of India and Others W.P. No. 3489 of 2019 dated \n08.03.2022. We have perused the CBDT Instruction No. 1/2011 \ndated 31.01.2011 as per which ITO has jurisdiction over the non-\ncorporate assessee upto the income of Rs. 20 lakh and above Rs. \n20 lakh the jurisdiction will be of DC/AC. It is undisputed fact that \nin the case of the assessee the total income offered for tax was to \nthe amount of Rs. 24,94,48,811/- which was more than Rs. 20 \nlakh. Therefore, the case of the assessee will be under the \njurisdiction of DC/AC not under the lies of ITO. With the \n\n \nITA No. 4194/Mum/2024 \n Joyce Stanislaus Aranha \nA.Y. 2017-18 \n \n \n4 \nassistance of ld. Representatives, we have perused the above \nreferred decision of Hon’ble High Court of Bombay wherein on \nidentical issue it is held that notice issued by the ITO exceeding \nthe income of Rs. 30 lakh was not valid in law. The relevant extract \nof the decision is as under: \n“4. We have considered the affidavit in reply of one Mr. Suresh G. \nKamble, ITO who had issued the notice under section 148 of the Act. Said \nMr. Kamble, ITO, Ward 12(3)(1), Mumbai admits that such a defective \nnotice has been issued but according to him, PAN of Petitioner was lying \nwith ITO Ward (12)(3)(1), Mumbai and it was not feasible to migrate the \nPAN having returned of income exceeding Rs. 30 lakhs to the charge of \nDCIT, Circle 12(3)(1), Mumbai, as the time available with the ITO 12(3)(1) \nwas too short to migrate the PAN after obtaining administrative approval \nfrom the higher authorities by 31 March, 2019. \n5. The notice under section 148 of the Act is jurisdictional notice and any \ninherent defect therein is not curable. In the facts of the case, notice \nhaving been issued \nby an officer who had no jurisdiction over the Petitioner, such notice in \nour view, has not been issued validly and is issued without authority in \nlaw. \n6. In the circumstances, we have no hesitation in setting aside the notice \ndated 30th March, 2019. \n7. Consequently the order dated 18th November, 2019 rejecting \nPetitioner's objection is also quashed and set aside.” \n5. \nLooking to the above facts and circumstances, we consider \nthat in the case of the assessee the ITO has made the assessment \nwithout valid in law therefore, the order passed in the case of the \nassessee u/s 143(3) is quashed and set aside. Since the \n\n \nITA No. 4194/Mum/2024 \n Joyce Stanislaus Aranha \nA.Y. 2017-18 \n \n \n5 \nassessment order passed is quashed therefore, other ground of \nappeal filed 1, 3 & 4 become academic and left open. \n6. \nIn the result, the appeal of the assessee is allowed. \nOrder pronounced in the open court on 21.03.2025. \n \n \n Sd/- Sd/- \n \n (ANIKESH BANERJEE) (AMARJIT SINGH) \n JUDICIAL MEMBER ACCOUNTANT MEMBER \n \nMumbai, Dated: 21.03.2025 \nBiswajit, Sr. P.S. \n \nCopy to: \n \n1. The Appellant: \n \n2. The Respondent: \n \n3. The CIT, \n \n4. The DR \n \n \n \n \n//True Copy// \n \n[ \n \n \n \n \n \n \n \n \n \n \n By Order \n \n \n Assistant Registrar \n ITAT, Mumbai Benches, Mumbai \n \n \n \n \n \n \n \n \n \n \n"