Bulk Trade Pvt. Ltd. Vs ITO (ITAT Kolkata)
Kolkata ITAT Quashes Assessment as Notice under Section 143(2) Was Issued by Officer Lacking Pecuniary Jurisdiction
The Kolkata Bench of the ITAT held that an assessment framed under Section 143(3) was void ab initio where the notice under Section 143(2) had been issued by an Income Tax Officer (ITO) who lacked pecuniary jurisdiction under CBDT Instruction No. 1/2011 dated 31.01.2011. The Tribunal noted that the assessee, being a corporate assessee having returned income exceeding the prescribed monetary threshold of ₹30 lakh applicable to metro cities, fell within the jurisdiction of the Deputy Commissioner/Assistant Commissioner of Income Tax (DC/AC) and not the ITO. Therefore, the very initiation of scrutiny proceedings by the ITO was without authority of law.
Relying on the judgment of the Calcutta High Court in PCIT v. Shree Shoppers Ltd., the Tribunal reiterated that the issuance of a valid notice under Section 143(2) by the jurisdictional Assessing Officer is a mandatory jurisdictional requirement for framing an assessment under Section 143(3). The fact that the assessment was subsequently completed by a competent officer did not cure the initial defect, as jurisdiction must exist on the date of issuance of the notice. Since the notice was issued by an officer who lacked the requisite pecuniary jurisdiction, it was held to be invalid, rendering the entire assessment proceedings non est in law. Accordingly, the Tribunal quashed the assessment and allowed the assessee’s appeal.
Cases Discussed
