Bhinaswar Commercial Pvt. Ltd. Vs DCIT (ITAT Kolkata)
Notice by an Officer Without Pecuniary Jurisdiction Invalidates Reassessment: CBDT’s Allocation of Cases Is Binding
The controversy
Can a Deputy Commissioner reopen and assess a case which, under the CBDT’s monetary allocation of jurisdiction, belongs to an Income-tax Officer?
The Kolkata Tribunal held that a statutory notice issued by an officer lacking pecuniary jurisdiction cannot validly support the consequential assessment. Applying CBDT Instruction No. 1/2011 dated 31 January 2011 and the jurisdictional precedents, it quashed the reassessment.
The decision reinforces a fundamental requirement: the officer exercising assessment powers must possess jurisdiction over the particular assessee.
The facts
The assessee, a private limited company registered with the RBI as a non-banking financial institution, filed its return for AY 2012-13 on 31 August 2012, declaring total income of ₹17,75,550.
The case was subsequently reopened. A notice under section 148 dated 30 March 2019 was issued by the DCIT, Circle 14(1), Kolkata.
Notices under sections 143(2) and 142(1), together with a questionnaire, followed. According to the order, the assessee did not comply with the requisitions. The Assessing Officer completed the assessment under section 143(3) read with section 147 on 27 December 2019, determining total income at ₹2,55,94,714.
The CIT(A) partly allowed the assessee’s appeal. Before the Tribunal, the assessee raised an additional legal ground challenging the very jurisdiction of the officer who had initiated and completed the reassessment.
Jurisdictional ground admitted for the first time
The Tribunal admitted the additional ground because it raised a pure question of law, and all the facts necessary to decide it were already available in the appeal record.
No further factual investigation was required.
For this purpose, the Tribunal relied upon Jute Corporation of India Ltd. v. CIT, 187 ITR 688 (SC), National Thermal Power Co. Ltd. v. CIT, 229 ITR 383 (SC) and PCIT v. Britannia Industries Ltd., 396 ITR 677 (Cal.).
The failure to raise the objection before the lower authorities therefore did not prevent its examination by the Tribunal in these circumstances.
CBDT instruction determined the competent officer
The assessee’s objection rested upon CBDT Instruction No. 1/2011, which allocated cases between ITOs and ACITs/DCITs by reference to monetary limits and categories of taxpayers.
The Tribunal found that, having regard to the returned income of ₹17,75,550, jurisdiction over the assessee belonged to the ITO, whereas both the section 148 notice and the consequential assessment had emanated from the DCIT.
It consequently held that the reassessment had been framed by a non-jurisdictional Assessing Officer and could not be sustained.
There is an editorial inconsistency in the order: its general discussion mentions the ₹20 lakh metropolitan threshold, while the corporate-assessee precedents reproduced in it identify the metropolitan corporate threshold as ₹30 lakh. The assessee’s returned income was below both figures, so this discrepancy does not alter the Tribunal’s conclusion in the present case.
High Court precedents supported annulment
The Tribunal relied upon PCIT v. Shree Shoppers Ltd., ITAT No. 39/2023, decided on 15 March 2023, where the Calcutta High Court upheld annulment of scrutiny proceedings initiated through a section 143(2) notice issued by an officer without jurisdiction.
In that case, the returned income placed the corporate assessee within the jurisdiction of the DCIT/ACIT, but the notice had been issued by an ITO. The High Court treated the defect as going to the root of the proceedings.
The Tribunal also referred to PCIT v. Mintu Das, ITAT No. 167/2025, decided on 14 January 2026. There, the returned income placed the assessee within the ITO’s jurisdiction, but the notice and assessment were issued by the ACIT. The High Court upheld the Tribunal’s decision in favour of the assessee.
These decisions illustrate that the jurisdictional requirement operates in both directions: an ITO cannot exercise powers assigned to an ACIT/DCIT, and higher rank alone does not establish authority over a case assigned to an ITO.
Reassessment proceedings face the same requirement
The Tribunal further relied upon Girik Estate Pvt. Ltd. v. ITO, ITA No. 170/KOL/2022, order dated 16 June 2023, which concerned notices under sections 148 and 143(2) issued contrary to the applicable monetary allocation.
The precedents reproduced in the order discussed sections 120 and 127, emphasising that jurisdiction depends upon lawful assignment and transfer. They also distinguished defects in service of notice from the more fundamental absence of a valid notice issued by the competent officer.
The decision
The Tribunal quashed the assessment as invalid for lack of jurisdiction and allowed the assessee’s appeal.
The other grounds concerning the assessment were left open. Thus, the appeal succeeded on the jurisdictional objection without adjudication of the additions on merits.
Author’s comments
Designation is not a substitute for jurisdiction. An officer’s seniority does not, by itself, authorise exercise of powers over every case handled by a subordinate officer.
The practical lesson is to examine the statutory notice alongside the applicable jurisdictional instruction, returned income, taxpayer category and any lawful assignment or transfer order. These records may reveal a foundational defect before the merits of the additions are considered.
The decision is particularly useful because it recognises that a jurisdictional objection supported by facts already on record can be examined through an additional ground before the Tribunal. A substantial assessed income cannot retrospectively validate proceedings initiated by an officer who lacked jurisdiction at the outset.
Cases Discussed
- Jute Corporation of India Ltd. v. CIT 187 ITR 688 (SC) — Relied upon for admission of an additional legal ground.
- National Thermal Power Co. Ltd. v. CIT, 229 ITR 383 (SC) — Relied upon regarding the Tribunal’s power to entertain legal questions.
- PCIT v. Britannia Industries Ltd., 396 ITR 677 (Cal.) — Relied upon for admission of the jurisdictional ground.
- PCIT v. Shree Shoppers Ltd, ITAT No. 39/2023 (Calcutta High Court, 15.03.2023) — Followed on invalid jurisdictional notice.
- PCIT v. Mintu Das, ITAT No. 167/2025 (Calcutta High Court, 14.01.2026) — Followed on assessment by a non-jurisdictional officer.
- Girik Estate Pvt. Ltd. v. ITO, ITA No. 170/KOL/2022 (ITAT Kolkata, 16.06.2023) — Followed regarding pecuniary jurisdiction in reassessment.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 13.08.2025 for the AY 2012-13.
2. The assessee has also raised additional grounds before us which are reproduced hereunder :-
“FOR THAT in the facts and circumstances of the instant case, the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. acted unlawfully in not appreciating that none of the conditions precedent existed for and/or were fulfilled by the Ld. Deputy Commissioner of Income Tax. Circle 14(1). Kolkata for his specious action of framing the assessment order u/s. 143(3) /147 of the Income Tax Act, 1961 on 27-12-2019 in the instant case de hors any valid notice u/s. 148 of the Income Tax Act, 1961 since issued in contravention of the C.B.D.T. INSTRUCTION NO. 1/2011 (F. NO. 187/12/2010-IT(A-1). DATED 31-01-2011 and the impugned action on that account renders the assessment order framed ab initio void, ultra vires and null in law.”
2.1. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised the above additional ground of appeal challenging the jurisdiction of the AO to frame assessment. In our opinion the issued raised in the additional ground is a purely legal issue qua which all the facts are available in the appeal folder and no further verification of facts is required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely covered by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT in 187 ITR 688, ii) National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 and also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal). Therefore we are inclined to admit the same for adjudication.
3. The assessee has challenged the order of ld. CIT(A) upholding the assessment order which is passed by the AO(ACIT) in violation of C.B.D.T. Instruction F.No.1/2011 {F.No.187/12 /2010-IT(A-I)} dated 31.01.2011 and the assessment order framed is ab initio void, ultra vires and nullity in law.
4. The facts in brief are that the assessee is a private limited company incorporated on 30.08.1994 and certified as a non-banking financial institution by the reserve bank of India. The assessee filed the return of income u/s 139(1) of the Act for the impugned assessment year on 31.08.2012, declaring total income of ₹17,75,550/. The case of the assessee was reopened for scrutiny and issued notice under section 148 of the Act which was duly served upon the assessee. Subsequently, notices u/s 143(2) & 142(1) of the Act along with questionnaire were issued, calling for various documents, details and evidences, which were not complied with. Finally, the ld. AO framed the assessment u/s 143(3) / 147 of the Act vide order dated 27.12.2019, by making various additions thereby assessing the total income at ₹2,55,94,714/-.
5. The ld. CIT (A) in the appellate proceedings the ld. CIT (A) partly allowed the appeal of the assessee.
6. After hearing the rival contentions and perusing the materials available on record, we find that the case of the assessee was reopened u/s 147 read with section 148 of the Act. The notice under section 148 of the Act was issued by DCT Circle 14(1), a copy of which is available at page no.119 of the Paper Book of the assessee, and the assessment was framed by the DCIT, Circle 14(1), Kolkata, without following the CBDT instruction No.1/2011 (F. No. 187/12/2010-IT(A-1), Dated 31.01.2011. Therefore, we find merit in the contention of the ld. Counsel for the assessee that the assessment framed without issuing valid notice u/s 148 of the Act is invalid and nullity as the notice was issued by the by DCIT Circle 14(1), Kolkata on 30.03.2019. According to the said instruction, the ITO has pecuniary jurisdiction where the income is upto 20 lacs in the Metro Cities and 15 lacs in Mofussil areas whereas the DC/AC have jurisdiction above 20 lacs in Metro cities and above 15 lacs in the Mofussil areas. The said instructions reads as under:-:-
SECTION 119 OF THE INCOME-TAX ACT, 1961 – INCOME-TAX AUTHORITIES – INSTRUCTIONS TO SUBORDINATE AUTHORITIES
INSTRUCTION NO. 1/2011 [F. NO. 187/12/2010-IT(A-I)], DATED 31-1-2011
References have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship to the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship.
An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under:
| Income Declared (Mofussil areas) | Income Declared (Metro cities) | |||
|---|---|---|---|---|
| ITOs | ACs/DCs | ITOs | DCs/ACs | |
| Corporate returns | Upto Rs. 20 lacs | Above Rs. 20 lacs | Upto Rs. 30 lacs | Above Rs. 30 lacs |
| Non-corporate returns | Upto Rs. 15 lacs | Above Rs. 15 lacs | Upto Rs. 20 lacs | Above Rs. 20 lacs |
Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune.
The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011.
7. In the present case, the assessee filed the return of income 31.08.2012, declaring total income as 17,75,550/-. We note that assessment was framed by DCIT, Circle 14(1), Kolkata which is in violation of the CBDT Instruction No.1/2011 (F. No. 187/12/2010-IT(A-1), Dated 31.01.2011. Therefore, the said assessment has been framed by non-jurisdictional AO which is invalid and cannot be sustained. The case of the assessee find support from the decision of the Hon’ble Calcutta High Court in the case of PCIT vs. M/s Shree Shoppers Ltd. in ITAT 39/2023, IA No. GA/1/2023, dated 15.03.2023, wherein the Hon’ble Court has decided the issue in favour of the assessee by upholding the order of the Tribunal. The Tribunal in ITA No. 865/KOL/2018 for A.Y. 2012-13 in case of M/s Shree Shoppers Ltd. Vs. DCIT has held that notice issued by ITO, Ward 39(4), Kolkata, u/s 143(2) of the Act was without valid jurisdiction and therefore the consequent assessment framed by the DCIT, circle 9(2), Kolkata is invalid. The Hon’ble Tribunal followed the decision of jurisdictional High Court in case of PCIT vs. Nopany & Sons (2022) 136 taxmann.com 414 (Cal), while passing the order. The Hon’ble court vide order dated 15.03.2023, has held as under:-
“We have heard Ms. Smita Das De, learned standing counsel for the appellant/revenue. Though the respondent has been served and affidavit of service filed, none appears for the respondent.
The short issue which falls for consideration in the instant case is whether there is valid notice issued under Section 143 (2) of the Act for commencing the scrutiny assessment. The Tribunal has noted the facts and rendered a finding that on the date when the case was selected for scrutiny, the authority who issued the notice namely, the Income Tax Officer, Ward No.9(4), Kolkata did not have jurisdiction and the jurisdiction. was with the Deputy
Commissioner of Income Tax. The following factual finding has been recorded by the Tribunal:
“Therefore, the legal ground stands to be admitted and the same relates to invalid notice issued u/s. 143 (2) of the Act. It is a settled position of law that for carrying out the assessment proceedings u/s. 143 (3) of the Act, the statutory requirement of serving of valid notice u/s. 143 (2) of the Act is must and in absence thereof the subsequent proceedings become invalid. In the case of assessee, the facts are that the assessee has declared income of Rs.48,47,180/- in the e-return filed on 26.09.2012. For selecting the case for scrutiny notice u/s. 143 (2) of the Act was issued by ITO, Ward-9(4), 23.09.2013. The Central Board of Direct Taxes (CBDT vide Instruction No.1/2011 supra) revised the monetary limit for issuing notice by ITO/DCS/ACs. Through this instruction it stated that in case of metro cities in case of corporates declare income above Rs.30 lakh the jurisdiction of such corporate assessee will lie with the DCs/ACs. It is not in dispute that as on the date of selecting the case for having Kolkata dated scrutiny, the very basis for jurisdiction over the assessee is the returned income which was more than Rs.30 lakhs and the same was lying with the DCs/Acs but the notice u/s. 143 (2) of the Act has been issued by ITO, Ward-9(4), Kolkata. It is true that subsequently the assessment has been framed byDCIT, Circle-9(2), Kolkata but the point in dispute is that on date of issuing a notice u/s. 143 (2) of the Act, whether the ITO, Ward-9(4), Kolkata was having a valid jurisdiction to issue such notice u/s. 143 (2) of the Act.”
The above factual position recorded by the Tribunal is not in dispute. Therefore, we are of the clear view that the Tribunal rightly allowed the assessee’s appeal and quashed the scrutiny proceedings as defect in issuance of notice is incurable as it goes to the root of the matter.
Thus, we find no ground to differ with the findings recorded by the learned Tribunal.
In the result, the appeal filed by the revenue (ITAT/39/2023) is dismissed and the substantial questions of law are answered against the revenue.
Consequently, the connected application for stay (IA No.GA/2/1/2023) also stands closed.”
8. Similarly, the case of the assessee also find support from the decision of Hon’ble Jurisdictional High Court Calcutta in case of PCIT Vs. Mintu Das in ITAT/167/2025, IA No. GA/1/2025, GA/2/2025 vide order dated 14.01.2026, wherein it has held as under:-
“We, after hearing the rival submissions of the parties and perusing the materials available on record note that the return of income of the assessee was of Rs.16,50,920/ which falls under the jurisdiction of the ITO, Ward-28(2), Kolkata but notice u/s 143(2) of the Act was issued by ACIT, Circle-28, Kolkata and also the assessment order was duly framed by ACIT, Circle-28. Kolkata, which is clearly a violation of the jurisdictional mandate under CBDT Circular No. 1/2011 dated 31.01.2011. We note that this procedural irregularity rendered the assessment proceedings invalid and bad in law.”
This Court observes that the jurisdictional issue has rightly been determined by the learned Tribunal and no substantial questions of law arises in this appeal.
In view of the above, we dismiss the appeal. Accordingly, the stay petition (GA/2/2025) is also dismissed.”
9. Similarly, the case of the assessee also find support from the decision of the co-ordinate bench of this Tribunal in case of Girik Estate Pvt. Ltd. Vs. ITO, in ITA No. 170/KOL/2022, vide order dated 16.06.2023, wherein the co-ordinate Bench has held as under:-
“13. We have heard the rival submissions and perused the material on record. Undisputed facts are that the assessee is a corporate assessee and has declared total income of Rs. 48,23,545/- during the year. We observe that the notice u/s 148 and 143(2) of the Act were issued by ITO, Ward-6(2), Kolkata to the assesse and accordingly the assessment was framed by the ITO, Ward-6(2), Kolkata. We have also perused the instruction No. 1/2011 as stated herein above which is extracted below for the sake of convenience and ready reference:
INSTRUCTION NO. 1/2011 NO. 187/12/2010-IT(A-l)],
SECTION 119 OF THE INCOME TAX ACT/1961 – INCOME-TAX AUTHORITIES – INSTRUCTIONS
TO SUBORDINATE AUTHORITIES
INSTRUCTION NO. 1/2011 [F. NO. 187/12/2010-IT(A-I)], DATED 31-1-2011
References have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship to the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship.
An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under:
| Income Declared (Mofussil areas) | Income Declared (Metro cities) | |||
|---|---|---|---|---|
| ITOs | ACs/DCs | ITOs | DCs/ACs | |
| Corporate returns | Upto Rs. 20 lacs | Above Rs. 20 lacs | Upto Rs. 30 lacs | Above Rs. 30 lacs |
| Non-corporate returns | Upto Rs. 15 lacs | Above Rs. 15 lacs | Upto Rs. 20 lacs | Above Rs. 20 lacs |
Metro charges for the purpose of above instructions shall be Ahmadabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune.
The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011.
In terms of the above instruction in the case of corporate assessee in metro cities, the ITR filed above Rs. 30lacs, then it has to be assessed by DC/AC and therefore in the instant case the assessment is framed in violation of above instruction as issued by the Board. The case of the assessee is squarely covered by the decision of Co-ordinate Bench of Kolkata benches in the case of Hirak Sarkar (supra). The operative part is reproduced as under:
5. I have considered the rival contentions of both the ld. representatives of the parties. Before proceeding further, it will be appropriate to refer to section 120 of the Act which, for the sake of ready reference, is reproduced as under:
“Jurisdiction of income- tax authorities
(1) Income- tax authorities shall exercise all or any of the powers and perform all or any of the functions Conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities.
[Explanation.- For the removal of doubts, it is hereby declared that any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub-section (1)].
(2) The directions of the Board under sub- section (1) may authorise any other income- tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income- tax authorities who are subordinate to it.
(3) In issuing the directions or orders referred to in subsections (1) and (2), the Board or other income- tax authority authorised by it may have regard to any one or more of the following criteria, namely:- (a) territorial area;
(b) persons or classes of persons;
(c) incomes or classes of income; and
(d) cases or classes of cases
……..
6. A perusal of the aforesaid statutory provisions would reveal that the jurisdiction of Income Tax Authorities may be fixed not only in respect of territorial area but also having regard to a person or classes of persons and income or classes of income also. Therefore, the CBDT having regard to the income as per return has fixed the jurisdiction of the Assessing Officers.
7. Now, in this case, the reasons for forming belief of escapement of income by the assessee were recorded by the ITO, Ward-23(3), Hooghly and thereafter, notice u/s 148 of the Act was also issued by the by the ITO, Ward-23(3), Hooghly. However, the assessment has been framed by the ACIT, Circle-23(1), Hooghly. At this stage, it will be appropriate to refer to the provisions of section 127 of the Act as under:
Power to transfer cases
(1) The [Principal Director General or] Director General or [Principal Chief Commissioner or] Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him.
8. A perusal of the above statutory provisions would reveal that jurisdiction to transfer case from one Assessing Officer to other Officer lies with the Officers as mentioned in section 127(1) who are of the rank of Commissioner or above. No document has been produced on the file by the Department to show that the case was transferred by the competent authority from ITO, Ward-23(3), Hooghly to ACIT, Circle-23(1), Hooghly. Even, there is no document on the file that the ACIT, Circle-23(1), Hooghly had ever recorded any reasons to form belief that the income of the assessee has escaped assessment nor did he issue any notice u/s 147 of the Act. On the other hand, the ITO, Ward-23(3), Hooghly had recorded the reasons for reopening of the assessment and had issued notice u/s 148 of the Act, but did not proceed further with the framing of assessment. Under the circumstances, the assessment framed by ACIT, Circle-23(1), Hooghly, is bad in law on two counts, firstly he did not have any pecuniary jurisdiction to frame the assessment and secondly he himself did not form any belief that the income of the assessee has escaped assessment nor did he issue notice u/s 148 of the Act which was sine qua non to assume jurisdiction to frame to assessment. The issue relating to the pecuniary jurisdiction also came into consideration before the Coordinate Bench of the Tribunal in ITA No.2517/Kol/2019 and Others vide order dated 03.02.2021, wherein the Tribunal further relying upon various other decisions of the Coordinate Benches of the Tribunal has decided the issue in favour of the assessee and held that the assessment framed by Assessing Officer who was not having pecuniary jurisdiction to frame such assessment was bad in law. The relevant part of the order dated 03.02.2021 passed in ITA No.2517/Kol/2019 and Others is reproduced as under:
“5.2. The assessee relied on the recent decision of this Tribunal in the case of Hillman Hosiery Mills Pvt. Ltd. vs. DCIT, in ITA No. 2634/Kol/2019, order dated 12.01.2021. We find that the issues that arise in this appeal are clearly covered in favour of the assessee. This order followed the principles of law laid down in a number of other decisions of the ITAT, Kolkata Bench on this issue.
5.3. Kolkata “B” Bench of the Tribunal in the case of Hillman Hosiery Mills Pvt. Ltd.(supra) held as follows:
“10.In this case, the ITO Ward-3(3), Kolkata, issued notice u/s 143(2) of the Act on 04/09/2014. In reply, on 22/09/2014, the assessee wrote to the ITO, Ward3(3), Kolkata, stating that he has no jurisdiction over the assessee. Thereafter on 31/07/2015, the DCIT, Circle-11(1), Kolkata, had issued notice u/s 142(1) of the Act to the assessee. The DCIT, Circle-11(1), Kolkata, completed assessment u/s 143(3) of the Act on 14/03/2016. The issue is whether an assessment order passed by DCIT, Circle-11(1), Kolkata, is valid as admittedly, he did not issue a notice u/s 143(2) of the Act, to the assessee. This issue is no more res-integra. This Bench of the Tribunal in the case of Soma Roy vs. ACIT in ITA No. 462/Kol/2019; Assessment Year 201516, order dt. 8th January, 2020, under identical circumstances, held as under:-
“5. After hearing rival contentions, I admit this additional ground as it is a legal ground, raising a jurisdictional issue and does not require any investigation into the facts. The ld. Counsel for the assessee submitted that as per Board Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)], dt. 31/01/2011, the jurisdiction of the assessee is with the Assistant Commissioner of Income Tax, Circle-1, Durgapur, as the assessee is a non-corporate assessee and the income returned is above Rs.15,00,000/- and whereas, the statutory notice u/s 143(2) of the Act, was issued on 29/09/2016, by the Income Tax Officer, ward1(1), Durgapur, who had no jurisdiction of the case. He submitted that the assessment order was passed by the ACIT, Circle-1(1), Durgapur, who had the jurisdiction over the assessee, but he had not issued the notice u/s 143(2) of the Act, within the statutory period prescribed under the Act. Thus, he submits that the assessment is bad in law.
5.1. On merits, he rebutted the findings of the lower authorities. The ld. Counsel for the assessee relied on certain case-law, which I would be referring to as and when necessary.
6. The ld. D/R, on the other hand, submitted that the concurrent jurisdiction vests with the ITO as well as the ACIT and hence the assessment cannot be annulled simply because the statutory notice u/s 143(2) of the Act, was issued by the ITO and the assessment was completed by the ACIT. He further submitted that the assessee did not object to the issue of notice before the jurisdictional Assessing Officer and even otherwise, Section 292BB of the Act, comes into play and the assessment cannot be annulled. On merits, he relied on the orders of the lower authorities.
7. I have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, I hold as follows:-
8. I find that there is no dispute in the fact that the notice u/s 143(2) of the Act dt. 29/09/2016 has been issued by the ITO, Wd-1(1), Durgapur. Later, the case was transferred to the jurisdiction of the ACIT on 11/08/2017. Thereafter, no notice u/s 143(2) of the Act was issued by the Assessing Officer having jurisdiction of this case and who had completed the assessment on 26/12/2017 i.e., ACIT, Circle-1(1), Durgapur. Under these circumstances, the question is whether the assessment is bad in law for want of issual of notice u/s 143(2) of the Act.
9. This Bench of the Tribunal in the case of Shri Sukumar Ch. Sahoo vs. ACIT in ITA No. 2073/Kol/2016 order dt. 27.09.2017, held as follows:-
“5. From a perusal of the above Instruction of the CBDT it is evident that the pecuniary jurisdiction conferred by the CBDT on ITOs is in respect to the ‘non corporate returns’ filed where income declared is only upto Rs.15 lacs ; and the ITO doesn’t have the jurisdiction to conduct assessment if it is above Rs 15 lakhs. Above Rs. 15 lacs income declared by a non- corporate person i.e. like assessee, the pecuniary jurisdiction lies before AC/DC. In this case, admittedly, the assessee an individual (non corporate person) who undisputedly declared income of Rs.50,28,040/- in his return of income cannot be assessed by the ITO as per the CBDT circular (supra). From a perusal of the assessment order, it reveals that the statutory notice u/s. 143(2) of the Act was issued by the then ITO, Ward-1, Haldia on 06.09.2013 and the same was served on the assessee on 19.09.2013 as noted by the AO. The AO noted that since the returned income is more than Rs. 15 lacs the case was transferred from the ITO, Ward-1, Haldia to ACIT, Circle-27 and the same was received by the office of the ACIT, Circle27, Haldia on 24.09.2014 and immediately ACIT issued notice u/s. 142(1) of the Act on the same day. From the aforesaid facts the following facts emerged:
i. The assessee had filed return of income declaring Rs.50,28,040/-. The ITO issued notice under section 143(2) of the Act on 06.09.2013.
ii. The ITO, Ward-1, Haldia taking note that the income returned was above Rs. 15 lacs transferred the case to ACIT, Circle-27, Haldia on 24.09.2014.
iii. On 24.09.2014 statutory notices for scrutiny were issued by ACIT, Circle-27, Haldia.
6. We note that the CBDT Instruction is dated 31.01.2011 and the assessee has filed the return of income on 29.03.2013 declaring total income of Rs.50,28,040/-. As per the CBDT Instruction the monetary limits in respect to an assessee who is an individual which falls under the category of ‘non corporate returns’ the ITO’s increased monetary limit was upto Rs.15 lacs; and if the returned income is above Rs. 15 lacs it was the AC/DC. So, since the returned income by assessee an individual is above Rs.15 lakh, then the jurisdiction to assess the assessee lies only by AC/DC and not ITO. So, therefore, only the AC/DC had the jurisdiction to assess the assessee. It is settled law that serving of notice u/s. 143(2) of the Act is a sine qua non for an assessment to be made u/s. 143(3) of the Act. In this case, notice u/s. 143(2) of the Act was issued on 06.09.2013 by ITO, Ward-1, Haldia when he did not have the pecuniary jurisdiction to assume jurisdiction and issue notice. Admittedly, when the ITO realized that he did not had the pecuniary jurisdiction to issue notice he duly transferred the file to the ACIT, Circle-27, Haldia on 24.09. 2014 when the ACIT issued statutory notice which was beyond the time limit prescribed for issuance of notice u/s. 143(2) of the Act. We note that the ACIT by assuming the jurisdiction after the time prescribed for issuance of notice u/s. 143(2) of the Act notice became qoarum non judice after the limitation prescribed by the statute was crossed by him. Therefore, the issuance of notice by the ACIT, Circle-27, Haldia after the limitation period for issuance of statutory notice u/s. 143(2) of the Act has set in, goes to the root of the case and makes the notice bad in the eyes of law and consequential assessment order passed u/s. 143(3) of the Act is not valid in the eyes of law and, therefore, is null and void in the eyes of law. Therefore, the legal issue raised by the assessee is allowed. Since we have quashed the assessment and the appeal of assessee is allowed on the legal issue, the other grounds raised by the assessee need not to be adjudicated because it is only academic. Therefore, the additional ground raised by the assessee is allowed.
7. In the result, appeal of assessee is allowed.
9.1.This Bench of the Tribunal in the case of Krishnendu Chowdhury vs. ITO reported in [2017] 78 taxmann.com 89 (Kolkata-Trib.) held as follows:-
“Return of income of assessee was Rs. 12 lakhs – As per CBDT instruction, jurisdiction for scrutiny assessment vested in Income-tax Officer and notice under section 143(2) must be issued by Income-tax Officer, Ward-I, Haldia and none other – But, notice was issued by Asstt. Commissioner, Circle Haldia much after CBDT’s instruction and knowing fully well that he had no jurisdiction over assessee – Whether, therefore, notice issued by Asstt. Commissioner was invalid and consequently assessment framed by Incometax Officers becomes void since issue of notice under section 143(2) was not done by Income-tax Officers as specified in CBDT instruction No. 1/2011.”
9.2.The Hon’ble High Court of Calcutta in the case of West Bengal State Electricity Board vs. Deputy Commissioner of Income Tax, Special Range – I, reported in [2005] 278 ITR 218 (Cal.) has held as follows:-
“Section 254 of the Income-tax Act, 1961 – Appellate Tribunal – Powers of – Assessment years 1983-84 to 1987-88 – Whether a question of law arising out of facts found by authorities and which went to root of jurisdiction can be raised for first time before Tribunal – Held, yesWhether jurisdiction of Assessing Authority is not dependent on date of accrual of cause of action but on date when it is initiated – Held, yes – Whether once a particular jurisdiction is created, same must be prospective and cannot be retrospective and it has to be interpreted having regard to manner in which it has been sought to be created – Held, yes – Assessee”
9.3.TheHon’ble Supreme Court in the case of CIT vs. Laxman Das Khandelwal [2019] 108 taxmann.com 183 (SC), held as follows:-
“7. A closer look at Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. According to Mr.Mahabir Singh, learned Senior Advocate, since the Respondent had participated in the proceedings, the provisions of Section 292BB would be a complete answer.
On the other hand, Mr.AnkitVijaywargia, learned Advocate, appearing for the Respondent submitted that the notice under Section 143(2) of the Act was never issued which was evident from the orders passed on record as well as the stand taken by the Appellant in the memo of appeal. It was further submitted that issuance of notice under Section 143(2) of the Act being prerequisite, in the absence of such notice, the entire proceedings would be invalid.
8. The law on the point as regards applicability of the requirement of notice under Section 143(2) of the Act is quite clear from the decision in Hotel Blue Moon’s case (supra). The issue that however needs to be considered is the impact of Section 292BB of the Act.
9. According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself.”
10. Respectfully following the propositions of law laid down in all these case-law and applying the same to the facts of the case, we hold that the assessment order is bad in law for the reason that the Assessing Officer having jurisdiction over the assessee, has not issued a notice u/s 143(2) of the Act as required by the statute. Notice issue by the officer having no jurisdiction of the assessee is null and void. When a notice is issued by an officer having no jurisdiction, Section 292BB of the Act, does not comes into play. Coming to the argument of the ld. D/R that objection u/s 124(3) of the Act has to be taken by the assessee on rectifying notice u/s 143(2) of the Act from a non-jurisdictional assessing officer, I am of the view that I need not adjudicate this issue, as I have held that non-issual of statutory notice/s 143(2) of the Act by the jurisdictional Assessing Officer makes the assessment bad in law. Under these circumstances, we allow this appeal of the assessee.”
6. Respectfully following the propositions of law laid down in these orders stated above, we hold that the orders are bad in law for the reason that the assessing authority passed the order u/s 143(3) of the Act i.e. DCIT-13(1), Kolkata has not issued a notice u/s 143(2) of the Act and also for the reason that the jurisdiction of these cases lies with the ITO and not the DCIT. Hence all the orders passed by the ld. CIT(A) in these four cases are hereby quashed and the appeals of the assessees are allowed.”
9. In view of the discussion made above and respectfully following the decision cited above, it is held that the reassessment framed u/s 147 of the Act being without jurisdiction is bad in law and the same is accordingly set aside.
10. In the result, the appeal of the assessee stands allowed.
We have also perused the other decisions cited before us and find the facts are materially similar to ones as decided by the Co-ordinate Benches of the tribunal supra.
We, therefore, respectfully the decision of the coordinate benches ,quash the assessment order passed on the ground of lack of jurisdiction. Accordingly the appeal of the assessee is allowed.
14. In the result, the appeal of the assessee is allowed. ”
10. Considering the facts and circumstances of the case and also relying on the above decisions, we quash the assessment framed by the ld. AO as invalid.
11. The grounds raised by the assessee in the memorandum of appeal are not being adjudicated and are left open to be decided later on if need arises for the same in future.
12. In the result, the appeal of the assessee is allowed.
Order pronounced on 07.10.2026.
