Kusum Dube Vs ITO (ITAT Delhi)
The appeal arose from the order of the Commissioner of Income Tax (Appeals), Gurgaon, who had granted partial relief under Section 54F by allowing deduction of ₹15,63,566 out of the Assessing Officer’s disallowance of ₹1,05,67,271 relating to long-term capital gains for Assessment Year 2015-16. The assessee challenged the validity of the assessment itself on the ground that the jurisdictional Assessing Officer at Gurgaon never issued a notice under Section 143(2) after the case was transferred from Dibrugarh.
The assessee submitted that the return of income was originally scrutinized by the Income Tax Officer, Dibrugarh, but the assessment records were subsequently transferred to the jurisdictional Assessing Officer at Gurgaon. According to the assessee, the Gurgaon Assessing Officer completed the assessment solely on the basis of a notice under Section 143(2) issued by the non-jurisdictional officer at Dibrugarh, without issuing a fresh statutory notice. It was argued that Section 2(7A) defining the Assessing Officer and the mandatory requirement of notice under Section 143(2) were not complied with, rendering the assessment void ab initio. The assessee also relied on an earlier Coordinate Bench decision involving similar facts.
The Judicial Member accepted the assessee’s contention and relied upon the Coordinate Bench decision, which had held that notice under Section 143(2) must be issued by the jurisdictional Assessing Officer having territorial jurisdiction over the assessee. The earlier decision observed that issuance of notice under Section 143(2) is the foundational statutory requirement for initiating scrutiny assessment proceedings, and failure to issue such notice by the competent jurisdictional officer is not a curable defect. Applying the same reasoning, the Judicial Member held that since no notice under Section 143(2) had been issued by the jurisdictional Assessing Officer at Gurgaon after transfer of the records, the assessment proceedings were non est in law, void ab initio, and liable to be quashed.
