Assessment Held Invalid as Jurisdictional Officer Failed to Issue Mandatory Section 143(2) Notice

PCIT Vs Nopany & Sons (Calcutta High Court)

The Calcutta High Court considered an appeal filed by the Revenue under Section 260A of the Income-tax Act, 1961, challenging an order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2007-08. After condoning a delay of 55 days in filing the appeal, the Court proceeded to examine whether the assessment order passed by the Income Tax Officer, Ward 56(4), Kolkata, was valid when no notice under Section 143(2) had been issued by the Assessing Officer having jurisdiction over the assessee.

The Court noted the legal position laid down by the Supreme Court in Asst. CIT vs. Hotel Blue Moon, which held that omission to issue a notice under Section 143(2) is not a procedural irregularity and is not curable. It also referred to CIT vs. Gitsons Engineering Company, which held that the use of the word “shall” in Section 143(2) makes issuance and service of notice within the prescribed time mandatory. The Court further referred to the definition of “Assessing Officer” under Section 2(7A), which requires that the officer issuing the notice must have jurisdiction under the Act.

The assessee had challenged the assessment on several grounds, including the contention that no valid notice under Section 143(2) had been issued by the Assessing Officer having jurisdiction within the prescribed period. Although the Commissioner of Income Tax (Appeals) rejected this jurisdictional contention by holding that the officer who initially dealt with the electronic return had issued notice under Section 143(2), the CIT(A) decided the substantive issues in favour of the assessee. Consequently, the Revenue appealed before the Tribunal, while the assessee filed cross-objections challenging the finding regarding the validity of the notice.