The Income Tax Appellate Tribunal (ITAT) of Kolkata Bench has quashed scrutiny assessment proceedings initiated by the Assistant Commissioner of Income Tax (ACIT) initiated due to a defect in the issue of notice.
Jigna Chetan Mehta, the taxpayer filed its return in response to notice under Section 148 Income Tax Act, 1961 declaring total income of Rs.1,38,370/. Thereafter, the ACIT issued notices under Section 143(2) and 142(1) along with questionnaires were issued and served on the assessee.
Subsequently, the assessment was framed by ACIT by passing an order under Section 143(3) read with Section 147 of the Income Tax Act by assessing total income at Rs.6,04,179/-
Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax Appeal (CIT(A)), who upheld the assessment order. Thus the assessee filed the second appeal before the tribunal.
During the hearing, Rajiv Kumar Choudhary, the counsel for the assessee submitted that ACIT lacked jurisdiction over the assessee to take up the assessment proceeding for the reason that the total income of the assessee is below Rs. 20 lakhs and, therefore, ought to have been assessed by the Income Tax Officer and not the Assistant Commissioner of Income Tax.
The tribunal observed that the assessee returned income was less than Rs. 20 lakhs and the jurisdiction was lying with the ITOs but the notice under Section 143(2) of the Income Tax Act has been issued by ACIT.
After reviewing the facts and submission, the two-member bench of the tribunal comprising Girish Agrawal, (Accountant Member) and Sanjay Garg (Judicial Member) observed that ACIT, had no valid jurisdiction over the assessee on the date of issuing notice under Section 143(2) of the Income Tax Act. Therefore, quashed the scrutiny proceedings as defect in issuance of notice.
P. P. Barman, Counsel appeared for the revenue.
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