Assessment Framed Without Jurisdictional Notice u/s 143(2) Invalid: ITAT [Read Order]
Observing that the Assessing Officer who framed the assessment lacked jurisdiction because a statutory notice under Section 143(2) was not issued after the case transfer, the Tribunal ruled the assessment was invalid and a nullity.
Assessment Framed - Jurisdictional Notice - ITAT - taxscan
Assessment Framed - Jurisdictional Notice - ITAT - taxscan
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that the assessment framed by the Assessing Officer (AO) was invalid and a nullity because the jurisdictional notice under Section 143(2) of the Income Tax Act was not issued by the AO who finally completed the assessment.
Surya Agro Products Pvt. Ltd. (assessee) filed return of income, declaring a total income of ₹1,09,605 for the Assessment Year (AY) 2012-13. The case was selected for scrutiny to examine the large share premium received, and the Income Tax Officer (ITO), Ward 10(2), Kolkata issued and served notices under Section 143(2) and 142(1) of the Income Tax Act.
During the financial year, the assessee received share capital to the tune of ₹2,91,15,000. The AO, disbelieving the assessee's submissions, added the entire amount of ₹2,91,15,000 under Section 68 of the Act, passing the assessment order under Section 143(3) of the Income Tax Act.
Aggrieved by the AO’s order, the assessee filed an appeal before the Commissioner of the Income Tax (appeals)[CIT(A)]. The appeal was dismissed.
Aggrieved by the CIT(A)’s order, the assessee filed an appeal before the ITAT. The Counsel argued that the assessment framed under Section 143(3) dated 25.03.2015 was invalid because it was consequent to an invalid notice issued under Section 143(2) of the Income Tax Act.
The counsel for the assessee submitted that the case was transferred from ITO, Ward 10(2), Kolkata (who issued the S. 143(2) notice) on 05.01.2015, to ITO, Ward 9(4), Kolkata. The counsel argued that the ITO, Ward 9(4) did not issue any fresh notice under Section 143(2) before framing the assessment, thereby rendering the assessment invalid and liable to be quashed.
The Revenue's counsel contended that there was no need to issue any fresh notice after the initial notice under Section 143(2) was issued by the earlier AO and relied heavily on the orders of the lower authorities.
The two-member bench comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member) noted that the case was indeed transferred from ITO Ward 10(2), Kolkata (who issued the S. 143(2) notice) to ITO Ward 9(4), Kolkata on 05.01.2015.
The bench observed that the ITO Ward 9(4), Kolkata framed the assessment without any notice under Section 143(2) of the Act and concluded that this jurisdictional AO therefore lacked the jurisdiction to frame the assessment.
The Tribunal observed that the notice under Section 143(2) is a statutory notice which gives jurisdiction to the AO to pass the assessment order, and in its absence, the assessment framed is a nullity and cannot be sustained.
The Tribunal quashed the assessment framed by the AO on the ground of lack of jurisdiction. The appeal of the assessee was thus allowed.
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