R A Realtors Pvt. Ltd. Vs ITO (ITAT Kolkata)
Assessment quashed for lack of pecuniary jurisdiction – Notice u/s 143(2) by wrong AO invalid
The Kolkata ITAT allowed the assessee’s appeal for AY 2012-13 and quashed the assessment as void ab initio on the ground of lack of jurisdiction. The Tribunal held that the Assessing Officer (ACIT) who issued notice under section 143(2) and framed the assessment did not have pecuniary jurisdiction in terms of CBDT Instruction No.1/2011 dated 31.01.2011.
Since the assessee had filed a nil return, the case fell within the monetary limits assigned to an ITO, and not an ACIT. Issuance of notice u/s 143(2) by a non-jurisdictional officer was held to be fatal, as a valid 143(2) notice by the competent AO is a sine qua non for assumption of jurisdiction to frame assessment u/s 143(3).
The Tribunal rejected the Revenue’s objection based on section 124(3) (waiver due to participation), holding that inherent lack of jurisdiction cannot be cured by participation or lapse of time. It distinguished the Supreme Court decision in Kalinga Institute of Industrial Technology as factually inapplicable.
Relying on consistent Kolkata Bench decisions and confirmation by the Jurisdictional High Court, the ITAT concluded that the entire assessment proceedings were without authority of law and therefore a nullity. Consequentially, all grounds on merits (including the addition u/s 68) were rendered academic. The assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
