Ozone Builders & Developers Pvt. Ltd. Vs DCIT (ITAT Delhi)
Delhi ITAT Quashes Assessment for Want of Fresh Section 143(2) Notice After Change of Jurisdiction
The Delhi ITAT quashed the assessment framed under section 143(3), holding that the successor Assessing Officer, who completed the assessment after a change of jurisdiction, had not issued a fresh notice under section 143(2). Although the original notice had been issued by DCIT, Circle-I, Faridabad, the assessment was ultimately completed by DCIT, Circle-II, Faridabad, without issuing a fresh statutory notice after assuming jurisdiction.
The Tribunal admitted the assessee’s additional legal ground, relying on the Supreme Court’s decision in NTPC Ltd., and held that the absence of a valid notice under section 143(2) by the jurisdictional Assessing Officer was a jurisdictional defect that could not be cured. It followed the Delhi ITAT decision in Naveen Kumar Jha v. ITO, which in turn applied the Supreme Court’s ruling in ACIT v. Hotel Blue Moon, emphasizing that issuance of a valid notice under section 143(2) by the officer framing the assessment is a mandatory requirement.
Accordingly, the Tribunal held the assessment to be without jurisdiction and quashed the assessment order. Since the appeal was allowed on this legal ground, all other grounds on merits were treated as academic.
Cases Discussed
- Naveen Kumar Jha vs. ITO (ITAT Delhi), ITA No. 4817/Del/2025
- Rakshit Estate Pvt. Ltd. vs. ITO, Gurgaon (ITAT Delhi), ITA No. 3615/Del/2024
- CIT vs. Lakshman Das Khandelwal (SC), Civil No. 6261-6262 of 2019
- Jayanta Khaund vs. ACIT (ITAT Guwahati)
- NTPC Ltd. (SC), 229 ITR 383
- ACIT v. Hotel Blue Moon (SC), (2010) 321 ITR 362 (SC)
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is arising out of the order of the Ld. Commissioner of Income Tax (Appeals), Faridabad (hereinafter referred as “CIT(A)”) in Appeal No. 10419/2016-17 dated 31.3.2019. Assessment was framed by the DCIT, Circle-II, Faridabad for the assessment year 2013-14 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred the “Act”).
2. The assessee has raised the Additional Ground that no notice u/s. 143(2) of the Act has been issued by the DCIT, Circle-II, Faridabad after change of jurisdiction from the DCIT, Circle-I, Faridabad and for this assessee has raised the following additional grounds of appeal:
“1. That on the facts and circumstances of the case, the assessment order passed by DCIT, Circle-2, Faridabad is without jurisdiction and is liable to be quashed as no notice u/s. 143(2) has been issued by the DCIT, Circle-2, Faridabad.
2. That on the facts and circumstances of the case the assessment order dated 21.3.2016 passed by the AO is bad in law, invalid, without jurisdiction and also without due process of law accordingly the same is liable to be quashed.”
3. The Ld. Sr. DR was confronted with the aforesaid additional grounds, he objected the admissibility of the said additional grounds for the reason that there is no bonafide reasons for raising the additional grounds and the same is barred by limitation.
4. After hearing both the sides on the admissibility of the additional grounds, we note that the additional ground is purely legal and all the relevant facts are available on record and no new facts is to be investigated, hence, in view of the decision of the Hon’ble Supreme Court of India in the case of NTPC Ltd. reported in 229 ITR 383, we admit the additional ground.
5. We first deal with the additional ground no. 1 which is relating to order of the CIT(A) confirming the action of the AO in assuming jurisdiction for passing of the assessment order u/s. 143(3) of the Act in the absence of notice issued u/s. 143(2) of the Act by the jurisdictional Assessing Officer.
6. Brief facts are that the assessee filed its return of income electronically on 28.9.2013 and accordingly assessee’s case was for selected under CASS. Notice u/s. 143(2) was issued by the DCIT, Circle-I, Faridabad on 02.09.2014. Subsequently, assessee’s case was transferred by the DCIT, Circle-I, Faridabad to the DCIT, Circle-II, Faridabad upon change of jurisdiction and in view of the provisions of section 129 of the Act vide dated 6.11.2015. Now ld. Counsel for the assessee stated that the original notice u/s. 143(2) was issued by the DCIT, Circle-I, Faridabad dated 02.09.2014 and thereafter there is change in jurisdiction and assessee’s jurisdiction was transferred to DCIT, Circle-II, Faridabad vide order dated 6.11.2015, in view of the provisions of section 129 of the Act. Ld. Counsel for the assessee further stated that there is no notice u/s. 143(2) was issued by the DCIT, Circle-II, Faridabad who framed the assessment u/s. 143(3) of the Act, hence, the assessment framed u/s. 143(3) is bad in law and without jurisdiction. Ld. Counsel for the assessee for the above proposition, relied upon the following decisions of the Coordinate Bench:
i) ITA No. 4817/Del/2025 in the case of Naveen Kumar Jha vs. ITO Delhi (ITAT, Delhi).
ii) ITA No. 3615/Del/2024 in the case of Rakshit Estate Pvt. Ltd. vs. ITO, Gurgaon (ITAT, Delhi).
7. Further, ld. Counsel stated that none issue of notice u/s. 143(2) of the Act by the jurisdictional AO is not a curable defect within the provisions of section 292BB of the Act and in this regard, he placed reliance of the decision of Hon’ble Supreme Court in the case of CIT vs. Lakshman Das Khandelwal (Civil No. 6261-6262 of 2019).
8. On the other hand, Ld. DR placed reliance on the decision of the Coordinate Bench of ITAT, Guwahati in the case of Jayanta Khaund vs. ACIT wherein, it has been held that assessment order could not be rendered illegal and void merely on the ground that initial notice u/s. 143(2) was issued by ITAT instead of ACIT. He also argued that the contention of the Ld. AR AR is not tenable regarding assessment order passed without jurisdiction. He submitted that the notice u/s. 143(2) was duly issued on 2.9.2014 by the then jurisdictional AO,DCIT, Circle-I, Faridabad and the same was duly served upon the assessee. The case was subsequently transferred due to change in jurisdiction, and thereafter proceedings were continued by the successor AO. Further due to change of incumbent, statutory notice u/s. 129 of the Act was issued on 6.11.2015 and in response to the same the AR attended the proceedings and furnished the details as required. He further submitted that once a valid notice under section 143(2) is issued by a competent officer having jurisdiction at the relevant time, the assessment proceedings remain valid even if there is a subsequent change in jurisdiction and the successor officer is legally empowered to continue the proceedings from the stage at which they were left. He further submitted that assessee has raised this issue for the first time as an additional ground, despite of the fact that he has actively participated in the assessment proceedings without any objection regarding non-service or invalid service of notice. Such conduct indicates that the plea is an afterthought aimed at challenging the validity of the assessment on technical grounds rather than on merits. Thus, he submitted that the additional ground raised challenging the jurisdiction of the AO on account of alleged non-issuance of notice u/s. 143(2) is contrary to facts on record and liable to be rejected.
9. We have heard the rival contentions and perused the records. We note that the original notice u/s. 143(2) of the Act was issued by the DCIT, Circle-I, Faridabad and thereupon the jurisdiction was transferred to DCIT, Circle-II, Faridabad, who framed the assessment u/s. 143(2) of the Act. Admittedly, there is no transfer order u/s. 127 of the Act and there is no jurisdictional transfer by the CBDT. There is no notice u/s. 143(2) of the Act by the Jurisdictional Assessing Officer i.e. DCIT, Circle-II, Faridabad who framed the assessment u/s. 143(2) of the Act, thus, the assessment framed is without jurisdiction and deserve to be quashed. We hold and direct accordingly. Our aforesaid view is supported by the decision of the Coordinate Bench of Delhi Tribunal in the case of Naveen Kumar Jha vs. ITO decided in ITA No. 4817/Del/2025 vide order dated 22.9.2025 wherein, it has been held as under:-
“2. Coming to the first and foremost issue of validity of the impugned assessment dated 14.12.2019 framed by the learned Income-tax Officer, Ward35(8), Delhi itself, it emerges during the course of hearing that the relevant section 143(2) notice had been issued by the Income-tax Officer, Ward 38(3), Delhi on 28.09.2018. There is no other notice which could be stated to be emanating from the case records. There is further no clarity as to whether the assessee’s assessment jurisdiction had been transferred from the above latter authority to the former one. It is thus clear in these circumstances that learned assessing authority framing the assessment in the assessee’s case had not issued any notice u/s 143(2) of the Act which forms a mandatory condition as held in ACIT v. Hotel Blue Moon (2010) 321 ITR 362 (SC). This tribunal finds merit in the assessee’s instant first and foremost legal argument to quash the assessment order itself in very terms therefore.”
10. Since, we have quashed the assessment on the legal ground as aforesaid, the other grounds have become academic and need not be adjudicated.
11. In the result, the appeal of the assessee is allowed in the very aforesaid terms.
Order pronounced in the Open Court on 31-7-2026.
