Jurisdictional notice u/s 143(2) of Income Tax Act issued beyond prescribed limitation period: ITAT quashes Assessment Order [Read Order]

In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has quashed the assessment order due to the jurisdictional notice under Section 143(2) of the Income Tax Act, 1961 being issued beyond the prescribed limitation period.

The assessee has raised a legal ground challenging the validity of the assessment framed on account of the jurisdictional notice under Section 143(2) of the Income Tax Act being issued beyond the limitation prescribed under the Act..

Mr. Divyang Shah representing the assessee challenging the validity of the assessment framed in the present case was that the jurisdictional notice under Section 143(2) of the Income Tax Act, was issued beyond the time prescribed under the Act. Further contended that, in the present case, after filing of the return of income, defect notice under Section 139(9) of the Income Tax Act had been sent to the assessee which was cured by the assessee subsequently on 19.08.2018.

He pointed out that, in the present case, the return of income was filed within the prescribed due date, i.e. on 28.10.2017, the assessment year being AY 2017-18. That, as per the provisions of Section 143(2) of the Income Tax Act, notice was to be issued under the said section by 30.09.2018. That, however, was issued on 22.09.2019, i.e. more than a year after the prescribed date under law for issuance of notice under Section 143(2) of the Income Tax Act, further challenged the jurisdiction of the Assessing Officers in terms of provisions of Section 124 of the Income Tax Act and has nothing to do with the limitation prescribed under the Act for issuance of jurisdictional notice under Section 143(2) of the Income Tax Act.

Mr. Santosh Kumar representing the revenue contended that the assessee had cured the defect beyond the period prescribed under Section 139(9) of the Income Tax Act dealing with defective returns. That, therefore, the decision of the High Court is of no assistance to the assessee. He further relied on the decision of the Supreme Court in the case of Deputy Commissioner of Income-tax (Exemption) Vs. Kalinga Institute of for the proposition that where the assessee had not challenged the defect in the notice and participated in the proceedings, he thereafter subsequently was debarred from challenging jurisdiction of the Assessing Officer in terms of Section 124 of the Income Tax Act.

The bench observed that the assessing officer acknowledged the rectification made by the assessee, proceeded to process the return under Section 143(1) of the Income Tax Act, and issued a refund accordingly. Interestingly, even the Revenue's case reflects that following the rectification, the Assessing Officer proceeded to issue a notice under Section 143(2) of the Income Tax Act. This action implies his acceptance of the rectification and the condonation of any associated delays, within his authority as per Section 139(9) of the Income Tax Act.

The two member bench of the tribunal comprising Suchithra Kamble ( Judicial member ) and Annapurna Gupta ( Accountant member ) quashed the assessment order finding the jurisdictional notice under Section 143(2) of the Income Tax Act being issued beyond limitation prescribed under the Act. Accordingly, the appeal of the assessee is allowed.

To Read the full text of the Order CLICK HERE

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