" IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “J”, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No. 4194/Mum/2024 Assessment Year 2017-18 Joyce Stanislaus Aranha E 1301, Mayfair Meridian, Ceasar Road, Andheri West, Mumbai – 400102. PAN: AAFPA 5598 J Vs. ITO, Ward – 10(1)(3), Aaykar Bhavan, Mumbai – 400058. (Appellant) (Respondent) Present for: Assessee by : Shri Ashok Bansal Revenue by : Shri Asif Karmali, Sr. DR Date of Hearing : 14.01.2025 Date of Pronouncement : 21.03.2025 O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER: The appeal of the assessee for the assessment year 2017-18 is directed against the order dated 21.06.2024 passed by the National Faceless Appeal Centre (NFAC), Delhi. The assessee has raised the following grounds of appeal: “1. The lower authorities have erred in making addition to the appellant’s income/upholding the addition amounting to Rs. 1,89,52,120/- on account of denied deduction u/s 54F. 2. Without prejudice, the assessment is without jurisdiction as the notice u/s 143(2) was issued by Income Tax Officer whereas in view of the returned income, the jurisdiction was with Deputy Commissioner of Income Tax and the consequent assessment was also completed by the Income Tax Officer instead of Deputy Commissioner of Income Tax. ITA No. 4194/Mum/2024 Joyce Stanislaus Aranha A.Y. 2017-18 2 3. The learned Commissioner of Income Tax (Appeals) has erred in deciding the appeal without affording personal hearing to the appellant as mandated by Rule 12(3) of the faceless appeal scheme. 4. The learned Commissioner of Income Tax (Appeals) has erred in not deciding the appeal within time as per section 250(6A).” 2. Fact in brief is that assessment order u/s 143(3) of the Act was passed on 25.12.2019 and claim of expenditure incurred on the improvement of the new asset to the amount of Rs. 1,89,07,065/- was disallowed. 3. The assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. 4. Heard both the sides and perused the material on record. The assessee has earned long term capital gain of Rs. 34,69,30,925/- on sale of shares and offered long term capital gain of Rs. 24,94,48,811/- for tax during the year under consideration after claiming deduction of Rs. 9,24,82,114/- u/s 54F of the Act for making investment in the purchase of a new house. The assessing officer noticed that the new house purchased also comprised an amount of Rs. 1,89,07,065/- as expenditure incurred as cost of improvement relating to the house purchased. The assessing officer was of the view that the residential house purchased was only 10 years old therefore, the assessee cannot take the ground that house was not in a good condition. Further, the AO stated that assessee cannot spent the amount out of amount deposited in capital gain account for making improvement or renovation of the ITA No. 4194/Mum/2024 Joyce Stanislaus Aranha A.Y. 2017-18 3 new asset. Before us, the assessee also referred the case of Mrs. Rahana Siraj vs CIT, Bangalore (2015) 58 taxmann.com 333 (Karnataka) wherein it is held that alternation / modification and improvement of newly house purchased is eligible for deduction u/s 54F of the Act. The assessee has also submitted that in the case of the assessee the notice u/s 143(2) was issued by the Income Tax Officer without jurisdiction as the case of the assessee fall under the jurisdiction of Assistant Commissioner of Income Tax / Deputy Commissioner of Income Tax in view of the returned income. He further submitted that in the case of the assessee even the assessment order u/s 143(3) of the Act was passed by the ITO and the ITO has no jurisdiction over the case of the assessee because of the monetary limit fixed by the CBDT vide Instruction No. 1/2011 dated 31.01.2011 as per which the jurisdiction over the case of the assessee lies with the ACIT not with the Income Tax Officer. In this regard, the assessee has also referred the decision of Hon’ble Bombay High Court in the case of Ashok Devichand Jain vs Union of India and Others W.P. No. 3489 of 2019 dated 08.03.2022. We have perused the CBDT Instruction No. 1/2011 dated 31.01.2011 as per which ITO has jurisdiction over the non- corporate assessee upto the income of Rs. 20 lakh and above Rs. 20 lakh the jurisdiction will be of DC/AC. It is undisputed fact that in the case of the assessee the total income offered for tax was to the amount of Rs. 24,94,48,811/- which was more than Rs. 20 lakh. Therefore, the case of the assessee will be under the jurisdiction of DC/AC not under the lies of ITO. With the ITA No. 4194/Mum/2024 Joyce Stanislaus Aranha A.Y. 2017-18 4 assistance of ld. Representatives, we have perused the above referred decision of Hon’ble High Court of Bombay wherein on identical issue it is held that notice issued by the ITO exceeding the income of Rs. 30 lakh was not valid in law. The relevant extract of the decision is as under: “4. We have considered the affidavit in reply of one Mr. Suresh G. Kamble, ITO who had issued the notice under section 148 of the Act. Said Mr. Kamble, ITO, Ward 12(3)(1), Mumbai admits that such a defective notice has been issued but according to him, PAN of Petitioner was lying with ITO Ward (12)(3)(1), Mumbai and it was not feasible to migrate the PAN having returned of income exceeding Rs. 30 lakhs to the charge of DCIT, Circle 12(3)(1), Mumbai, as the time available with the ITO 12(3)(1) was too short to migrate the PAN after obtaining administrative approval from the higher authorities by 31 March, 2019. 5. The notice under section 148 of the Act is jurisdictional notice and any inherent defect therein is not curable. In the facts of the case, notice having been issued by an officer who had no jurisdiction over the Petitioner, such notice in our view, has not been issued validly and is issued without authority in law. 6. In the circumstances, we have no hesitation in setting aside the notice dated 30th March, 2019. 7. Consequently the order dated 18th November, 2019 rejecting Petitioner's objection is also quashed and set aside.” 5. Looking to the above facts and circumstances, we consider that in the case of the assessee the ITO has made the assessment without valid in law therefore, the order passed in the case of the assessee u/s 143(3) is quashed and set aside. Since the ITA No. 4194/Mum/2024 Joyce Stanislaus Aranha A.Y. 2017-18 5 assessment order passed is quashed therefore, other ground of appeal filed 1, 3 & 4 become academic and left open. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 21.03.2025. Sd/- Sd/- (ANIKESH BANERJEE) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 21.03.2025 Biswajit, Sr. P.S. Copy to: 1. The Appellant: 2. The Respondent: 3. The CIT, 4. The DR //True Copy// [ By Order Assistant Registrar ITAT, Mumbai Benches, Mumbai "