APE Power Pvt. Ltd. Vs DCIT (ITAT Kolkata)
Notice Issued by Non-Jurisdictional AO Invalid: ITAT Kolkata Quashes Assessment Based on CBDT Pecuniary Limits
The Kolkata Bench of the ITAT allowed the assessee’s appeal for AY 2015-16 and quashed the entire assessment on the ground that the statutory notice under section 143(2) was issued by an officer lacking pecuniary jurisdiction.
The assessee had filed its return declaring income of about ₹49.24 lakh. As per CBDT Instruction No. 1/2011 dated 31.01.2011, cases above the prescribed pecuniary limits in metro cities fall within the jurisdiction of DCIT/ACIT and not the ITO. Despite this, the notice under section 143(2) was issued by the ITO, Ward 7(1), Kolkata.
The Tribunal held that issuance of notice by a non-jurisdictional Assessing Officer is not a mere procedural irregularity but goes to the very root of jurisdiction. Consequently, the notice under section 143(2) was invalid, rendering the subsequent assessment framed under section 143(3) void ab initio.
While rejecting the Revenue’s contention that CBDT instructions are merely administrative, the ITAT relied on binding jurisdictional precedents, including decisions of the Calcutta High Court and earlier coordinate benches, which consistently held that violation of pecuniary jurisdiction vitiates the assessment.
Accordingly, the assessment order was quashed in entirety and the assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
