Umesh A. Mishra Vs ITO (ITAT Mumbai)
Invalid 143(2) Notice by Wrong Officer Nullifies Entire Assessment
The ITAT Mumbai held that where a statutory notice under Section 143(2) is issued by an officer who does not have jurisdiction, the entire assessment proceedings become void ab initio.
In the present case, the assessee had declared income exceeding ₹60 lakh in a metro jurisdiction, and as per CBDT Instruction No. 1/2011, the authority to issue notice and complete assessment vested only with the ACIT/DCIT. However, the notice under Section 143(2) was issued by the Income Tax Officer, who lacked jurisdiction. The Tribunal observed that such a defect strikes at the root of the assessment and is not a procedural irregularity that can be cured later.
Relying on the Bombay High Court ruling in Ashok Devichand Jain and consistent Tribunal precedents, it was held that jurisdictional defects in statutory notices render the entire proceedings invalid, even if subsequent actions are taken by a competent authority. Since the foundation itself was defective, the assessment framed under Section 143(3) was quashed in entirety.
The Tribunal also condoned a substantial delay of 1414 days in filing the appeal, accepting the assessee’s explanation as bona fide and emphasizing that substantial justice should prevail over technicalities.
Bottom line: A jurisdictional defect in issuing notice under Section 143(2) is fatal and results in complete collapse of the assessment proceedings.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
