Assessment Void if Section 143(2) Notice Issued by Wrong Assessing Officer

Summary: The article discusses the legal principle that issuance of a valid notice under Section 143(2) of the Income-tax Act by the lawful Jurisdictional Assessing Officer (JAO) is a mandatory precondition for framing a scrutiny assessment under Section 143(3). It argues that where a notice is issued by an Income Tax Officer (ITO) lacking pecuniary jurisdiction under CBDT Instruction No. 1/2011, such notice is void ab initio and cannot be cured through subsequent transfer of the case, administrative routing, Section 129 continuity provisions, or Sections 292B and 292BB. The article emphasizes that jurisdiction based on pecuniary limits is distinct from territorial jurisdiction and cannot be validated through participation of the assessee, PAN mapping, automated CASS selection, or common PCIT control. It further contends that a valid transfer under Section 127 through a formal order is mandatory before another officer can lawfully assume jurisdiction. Relying on numerous Supreme Court, High Court, and ITAT rulings, the article concludes that assessments framed without a valid Section 143(2) notice from the competent officer are non-est, void ab initio, and liable to be quashed.

The notice u/s 143(2) to be issued by the Jurisdictional Assessing Officer is sine qua non

The impugned assessment is bad in law and void ab initio due to an invalid assumption of jurisdiction. The mandatory statutory notice under Section 143(2) was issued by an officer who completely lacked lawful jurisdiction over the assessee, rendering the entire subsequent assessment proceedings invalid.

The assessee filed an Income Tax Return (ITR) declaring an income of Rs.56,78,860.00. Because the declared income exceeded the monetary limits for a non-corporate assessee, the case fell under the jurisdiction of the Jurisdictional Assessing Officer (JAO), specifically the ACIT, Circle-12, XXXXXX. However, the initial notice under Section 143(2) was erroneously issued by the ITO, Ward No. 11, XXXXXX, who had no lawful jurisdiction over the assessee. Although the case file was eventually transferred to the correct JAO (ACIT, Circle-12, XXXXXXX), this transfer occurred much later, after the statutory limitation period for issuing a notice under Section 143(2) had already expired. Crucially, the transferee JAO failed to issue a fresh, valid notice under Section 143(2) within the prescribed time limit.

Under the statutory framework of the Income-tax Act, the issuance of a valid notice under Section 143(2) by the correct jurisdictional officer is a sine qua non (an absolute prerequisite) for assuming jurisdiction to frame a scrutiny assessment under Section 143(3). This jurisdictional defect is not a mere procedural irregularity that can be cured under the Act; rather, it strikes at the very root of the assessment’s legality. Because there was no valid transfer order under Section 127, and the actions stood in direct violation of Sections 120 and 124, the mandatory statutory conditions for a valid assessment were never satisfied. The CIT(A), NFAC failed to properly examine these fatal statutory violations, making the appellate order legally unsustainable and liable to be quashed.

The assessee relies upon the following binding precedents to support the plea that an assessment completed without a valid Section 143(2) notice issued by the lawful Jurisdictional Assessing Officer is void ab initio:

CIT v. Laxman Das Khandelwal (SC): The Supreme Court held that a jurisdictional defect in the issuance of a notice under Section 143(2) is a fundamental flaw that cannot be cured under the provisions of the Act.

ACIT v. Hotel Blue Moon (SC): – The Apex Court settled that the issuance of a mandatory notice under Section 143(2) is a prerequisite for a scrutiny assessment; its absence or invalidity renders the entire assessment invalid.

Raju Biswas (Kolkata) v. ITO, Ward No. 24(1), Kolkata (ITAT Kolkata, dated 27.01.2025).

M/S Balaji Enterprises (Guwahati) v. ACIT, Range-3, Guwahati (ITAT Guwahati Bench).

Deepak Gupta (Ghaziabad) v. ACIT, Circle, Noida (ITAT Delhi): Dealing with the requirement of valid jurisdiction and proper orders passed under Section 127 of the Act.

Ajay Pal Singh, New Delhi Vs. Deptt. Of Income Tax ITAT, New Delhi ITA 1874/Del/2012

Amiya Gopal Dutta v. DCIT, Circle-1(1), Kolkata (ITAT Kolkata).

The lack of lawful jurisdiction cannot be treated as a curable procedural defect, nor can it be validated by administrative structure alone. Even if both the issuing officer and the correct Jurisdictional Assessing Officer (JAO) operate under the same Principal Commissioner of Income Tax (PCIT), such internal administrative control cannot override the explicit statutory mandates governing jurisdiction under Sections 120, 124, and 127 of the Act. Furthermore, because this issue constitutes a total absence of initial jurisdiction rather than a mere defect in the service of a notice, it cannot be validated by the participation of the assessee or cured under the provisions of Section 292BB of the Act.

The division of authority between an Income Tax Officer (ITO) and an Assistant/Deputy Commissioner (ACIT/DCIT) is strictly governed by pecuniary limits. CBDT Instruction No. 1/2011 explicitly establishes legal jurisdiction based entirely on the total income declared in the return. When an assessee files a return exceeding the prescribed monetary threshold for an ITO, an officer of that rank completely lacks the pecuniary competence to initiate scrutiny proceedings. Any notice issued under Section 143(2) by such an incompetent officer is void from its inception. Consequently, a subsequent assessment framed by a higher-ranked officer (ACIT/DCIT) without the issuance of a fresh, valid statutory notice or a formal transfer order under Section 127 is entirely invalid and must be quashed.

While Section 124(3)(a) imposes restriction windows for challenging territorial jurisdiction, it places no such bar on challenging absolute pecuniary jurisdiction defects that strip an officer of their foundational authority.

The following precedents support the plea that pecuniary defects and lack of initial jurisdiction render the assessment void ab initio:

Mrs. Meena Swarup v. DCIT (ITAT Delhi): Held that where a statutory notice is issued by a non-jurisdictional officer and the transferee officer fails to issue a fresh notice, the entire assessment is void ab initio

Rakshit Estates Pvt. Ltd. v. ITO (ITAT Delhi): Reaffirmed that jurisdiction cannot be assumed by consent, participation, or common administrative control under the same PCIT, and that Section 292BB does not cure an inherent lack of jurisdiction.

Vipul Mittal v. DCIT (ITAT Delhi, ITA No. 2850/Del/2019, Orders dated 15.01.2025 and 11.03.2025):  Held that a notice under Section 143(2) issued by an ITO lacking pecuniary jurisdiction under CBDT Instruction No. 1/2011 is invalid. Since the foundational assessment was quashed on these jurisdictional grounds, the subsequent penalty proceedings could not survive and were also deleted.

The Revenue often attempts to save defective assessments by relying on the curative provisions or fictions of Section 129 and Section 127(4) of the Act, arguing that a successor officer merely continues the actions of a predecessor. However, this defense is legally unsustainable in cases of cross-grade transfers. Section 129 has a strictly limited scope and applies only to a routine change of an incumbent officer within the exact same jurisdictional office or grade (such as one ITO succeeding another ITO). It does not apply to cross-grade or cross-cadre transfers, such as moving a case from an ITO to an ACIT or DCIT due to pecuniary limits.

Consequently, Section 129 cannot be invoked to deem proceedings by a higher-ranked successor as a lawful continuation of an invalid act. If the initial notice under Section 143(2) was issued by an ITO who completely lacked pecuniary authority under CBDT Instruction No. 1/2011, that notice is void ab initio. A subsequent transfer of the file to the correct ACIT/DCIT does not retroactively cure or validate the original defect. The Revenue’s common defense—that a case file is automatically routed or validated based on a PAN-based system or internal intra-PCIT routing—fails because automated administrative routing cannot override statutory jurisdiction. Once a case is transferred to the correct grade of officer, the issuance of a fresh, valid notice under Section 143(2) by that transferee officer is mandatory. In its absence, the entire foundation of the assessment collapses.

The following precedents support the plea that Section 129 cannot cure cross-grade pecuniary defects:

Ashok Devichand Jain v. UOI (Bombay HC) [452 ITR 43]:   Clarified the distinction between territorial and pecuniary defects. The High Court held that pecuniary defects strip an officer of foundational authority and are entirely incurable, unlike certain territorial objections covered under Section 124(3). Without a valid initial notice, no assessment jurisdiction exists.

Shree Shoppers Ltd. v. ACIT (ITAT Kolkata) [2025 (2) TMI 81] Explicitly rejected the Revenue’s reliance on Section 129 in an intra-PCIT scenario. The Tribunal ruled that Section 129 is wholly inapplicable across different officer grades (ITO vs. ACIT) and cannot retroactively validate a void notice issued by an officer lacking pecuniary jurisdiction.

Judicial precedents establish that pecuniary jurisdiction defects under CBDT Instruction No. 1/2011 are incurable, as confirmed in Ashok Devichand Jain v. UOI [2023] 452 ITR 43 (Bombay HC), which rejected administrative constraints as a defense for improper reassessment notices. Subsequent rulings, including Ramesh Kumar Gupta (ITAT Delhi, 2025) and PCIT v. M/s Shree Shoppers Ltd. (Calcutta HC, 2023) further solidify that Section 129 cannot validate assessments originating from lack of pecuniary jurisdiction, rendering such proceedings void ab initio. Consequently, notices issued by improper authority despite later file transfers are regularly quashed for fundamental jurisdictional failure.
The Revenue frequently attempts to validate a defective assessment by relying on the curative provisions of Section 292B and the deeming provisions of Section 292BB of the Act. However, these statutory provisions are designed exclusively to remedy minor technical formalities and defects in service; they cannot bestow fundamental legal authority where none exists.

Section 292B dictates that an assessment or notice shall not be invalid merely because of a mistake, defect, or omission, provided it confirms to the substance and intent of the Act. Higher courts have consistently restricted the application of this section to purely clerical, typographical, or technical errors. Section 292B cannot breathe life into a statutory document that an officer had absolutely no legal right or pecuniary competence to sign in the first place.

Similarly, the Revenue’s reliance on Section 292BB is wholly misplaced. Section 292BB creates a legal fiction whereby an assessee who participates or cooperates in an assessment proceeding is precluded from challenging the notice on grounds of non-service, delayed service, or improper service. This section speaks strictly to the mechanics of delivery (the “how” and “when” of service). It is entirely inapplicable when the challenge strikes at the structural jurisdiction of the issuing officer. Participation by the assessee cannot confer jurisdiction by consent, nor can it validate a notice that was void ab initio due to a breach of the mandatory monetary thresholds established under CBDT Instruction No. 1/2011.

The following precedents support the plea that Sections 292B and 292BB cannot cure a lack of pecuniary jurisdiction:

PCIT v. M/s Shree Shoppers Ltd. (Calcutta HC, ITAT/39/2023, IA No. GA/1/2023): The jurisdictional High Court dismissed the Revenue’s appeal, holding that a notice issued under Section 143(2) by an officer lacking the requisite pecuniary jurisdiction is null, void ab initio, and incurable under Section 292B. Consequently, the subsequent assessment under Section 143(3) was quashed.

Ramesh Kumar Gupta v. ITO (ITAT Delhi) Ruled that where a proper statutory transfer order under Section 127 is absent between different ITO Wards (even within the same grade), the entire subsequent assessment chain is invalid. Section 129 cannot act as a substitute for a mandatory transfer order.

Kunshan Q Tech v. ACIT (ITAT Delhi): Held that if the underlying Section 127 transfer order itself is void because it was executed by an incompetent PCIT, all subsequent assessment proceedings are non-est, and Section 129 has no curative role.

Arjun Rishi v. ITO (ITAT Delhi): Reaffirmed that CBDT Instruction No. 1/2011 is strictly binding on the Department and that pecuniary jurisdiction must exist at the very inception when the notice is issued; subsequent file transfers to a higher-ranked officer cannot retroactively validate a void notice

The distinction between a territorial jurisdictional defect and a pecuniary or rank-based jurisdictional defect is fundamental. While an error in territorial jurisdiction (such as assigning a case to the wrong physical ward) may be treated as a curable irregularity if the assessee fails to object within the statutory timeline, a defect in pecuniary jurisdiction stands on an entirely different legal footing. When an Income Tax Officer (ITO) performs a statutory act that the law and binding CBDT instructions have strictly reserved for a higher-ranked officer, such as a Deputy or Assistant Commissioner (DCIT/ACIT), the act is coram non-judice—meaning it is performed by someone completely devoid of legal authority.

Because the initial notice under Section 143(2) is issued by an officer lacking this foundational competence, the notice is legally non-existent (non-est). The Department cannot rescue such an assessment by arguing that both officers operate within the same Range or under a unified PCIT charge. Administrative proximity cannot substitute for statutory competence. If the very initiation of the scrutiny is contaminated by an absolute lack of rank-based authority, the entire proceeding is void from its inception, and no subsequent transfer or assessment by a competent officer can validate it.

The following precedents support the plea that rank-based jurisdictional defects are coram non-judice and incurable:

Abhishek Jain v. ITO (Delhi HC) Reaffirmed the foundational principle that an Assessing Officer must possess the absolute legal right and competence to touch a case file at the time of initiating proceedings.

CIT v. Salarpur Cold Storage (Allahabad HC / Delhi HC Context): Held that the failure to issue a valid statutory notice under Section 143(2) is not a mere procedural irregularity; it represents a fatal jurisdictional defect that cannot be retroactively saved or cured by invoking Section 292BB.

The legal mechanism for shifting a case file due to a change in pecuniary jurisdiction is strictly governed by the statutory provisions of the Act and cannot be bypassed through informal actions. An Income Tax Officer (ITO) who discovers that an assessee’s declared income exceeds their monetary threshold cannot unilaterally divest themselves of the case or transfer the file to an Assistant Commissioner of Income Tax (ACIT) via a simple administrative letter or a physical handover.

In tax jurisprudence, jurisdiction represents absolute legal authority rather than a mere administrative or filing preference. For a transferee officer (ACIT/DCIT) to lawfully acquire jurisdiction over a case originally held by an ITO, a formal Order of Transfer must be executed under Section 127 of the Act. The statutory power to transfer cases is vested exclusively in higher-ranked authorities, specifically the Principal Commissioner of Income Tax (PCIT) or the Commissioner of Income Tax (CIT). Furthermore, this transfer must be formally recorded and processed through the Income Tax Business Application (ITBA) system to generate a valid, trackable statutory order. If an ITO merely hands over a file without a valid Section 127 order passed by a competent authority, the transferee officer fails to acquire lawful jurisdiction. Consequently, any subsequent assessment order passed by that transferee officer is entirely unauthorized, bad in law, and void ab initio.

In summary, since the initial notice under Section 143(2) was issued by an ITO who completely lacked pecuniary jurisdiction under the mandatory and binding mandates of CBDT Instruction No. 1/2011, the notice is a legal nullity. This foundational defect cannot be cured by the assessee’s participation under Section 292BB, nor can it be saved by the fact that the officers share a common Range or PCIT charge. Furthermore, because the case file was shifted without a formal, system-generated transfer order executed under Section 127 by a competent PCIT/CIT, the transferee officer never legally acquired the power to proceed. Therefore, the entire assessment framed under Section 143(3) lacks lawful authority and must be quashed. The assessee relies on the judgement of the ITAT , New Delhi in the case of Navita Gupta Vs ITO Dt. 30.04.2025 wherein held that the assessment framed is bad in law without valid transfer u/s 127 of the Act . The assessee relies on one more judgement wherein following the judgement in the case of Ashok Devi Chand Jain wherein held that the inherent defect is not curable: Monarch & Qureshi Vs ACIT ITA No. 2026 /Mum/2023 ITAT, Mumbai Dt. 21.12.2023

To effectuate a valid transfer when a case file exceeds the pecuniary limit of an Income Tax Officer (ITO), the Department must strictly adhere to a mandatory four-step statutory process. First, the ITO must formally identify that the declared income or loss has breached the monetary threshold and now falls under the jurisdiction of an Assistant Commissioner of Income Tax (ACIT). Second, the ITO must forward a formal proposal to the Principal Commissioner of Income Tax (PCIT) explaining the statutory necessity for shifting the case. Third, the PCIT must execute a formal statutory order under Section 127 of the Act. Fourth, based on that order, the electronic records must be digitally migrated on the official portal to the new Assessing Officer.

While centralized processing features may allow for certain automated migrations, any specific case file transfer between two distinct designations or circles requires this explicit approval from the PCIT to establish legal validity. If the ITO bypasses this sequence and simply forwards the file via an informal administrative note, the transfer is patently illegal.

This strict requirement applies with equal force to transfers made within the exact same city. The Revenue cannot rely on the relaxed hearing requirements of intra-city transfers to completely abandon the necessity of a formal order. While a prior opportunity of being heard may not be mandatory for localized, intra-city movements under the Act, the execution of a formal, written order under Section 127 remains an absolute statutory prerequisite. Moving a file through a simple letter or administrative note instead of a formal order prevents the transferee officer from ever legally acquiring jurisdiction, thereby rendering any subsequent assessment order void and liable to be quashed.

The following precedent supports the plea that a formal Section 127 order is mandatory even for intra-city transfers:

Kusum Goyal v. ITO (Calcutta HC) [329 ITR 283 Held that even if an opportunity of hearing is not required for an intra-city transfer of a case file, a formal order under Section 127 is still absolutely mandatory. The High Court ruled that a “simple letter” or administrative note used to shift a file is patently illegal, and quashed the subsequent assessment because the new officer never legally acquired jurisdiction.

The Revenue frequently raises a technological defense, arguing that because a case file migrated “online” or was routed via the Income Tax Business Application (ITBA) system, the transferee officer validly acquired control. However, higher courts have explicitly rejected this view, ruling that automated, system-driven migration is a mere administrative mechanism and cannot serve as a substitute for statutory jurisdiction. Even if the ITBA portal displays a case as transferred, the electronic movement remains legally invalid in the absence of an underlying, formal Section 127 order signed by the Principal Commissioner of Income Tax (PCIT). Under the maxims of the law, specifically the doctrine of foundation (sublato fundamento cadit opus), if the foundational act—the formal statutory transfer order—is non-existent, the entire legal superstructure built upon it must collapse. Systemic convenience or technical migration routines cannot override binding CBDT instructions or validate an otherwise unauthorized proceeding.

Furthermore, the statutory timeline dictates that a case must be assigned to the correct officer immediately upon the filing of the Income Tax Return (ITR). In the present case, the moment the assessee filed a return declaring an income exceeding the non-corporate threshold, the ITO became functus officio—meaning the officer was completely stripped of legal authority over the file by virtue of the mandatory limits in CBDT Instruction No. 1/2011. Because the ITO lacked inherent rank-based jurisdiction from the very inception, the notice issued under Section 143(2) was a total nullity.

The Department cannot cure this illegality through a “post-facto” transfer. A subsequent transfer of the case file to the correct Assistant Commissioner of Income Tax (ACIT) cannot retroactively validate or breathe life into an entirely void proceeding. For a scrutiny assessment to stand, the competent officer (ACIT) must be the one to initiate the proceedings by issuing a fresh, valid notice under Section 143(2) within the prescribed statutory limitation period.

Finally, the Revenue’s reliance on Sections 124(3) and 127(4) to counter the lack of a preliminary objection by the assessee is legally untenable. Section 124(3) restricts delayed challenges strictly to territorial jurisdiction or the physical “place of assessment.” It has no application to pecuniary or rank-based competence, which represents an absolute bar on an officer’s authority. Similarly, Section 127(4) only permits a successor officer to continue proceedings if the original statutory notices were validly issued by a competent predecessor. Because Section 127(4) merely preserves validly initiated actions, it cannot be used to retrospectively manufacture jurisdiction or save an assessment built upon a void notice.

The following precedents supports the plea that automated ITBA migration and post-facto transfers cannot validate an invalid notice:

Raj Sheela Growth Fund Pvt. Ltd. v. ITO (Delhi HC, 2024 / ITAT 2025): Reaffirmed that electronic or system-driven migration through the ITBA portal cannot substitute for legal jurisdiction. Held that an assessment is void ab initio if the case file is moved online without an underlying Section 127 order formally signed by the PCIT.

The Revenue often seeks to justify a jurisdictional error by relying on the automated nature of the Computer Assisted Scrutiny Selection (CASS) system. The Department frequently argues that because a case was flagged algorithmically by a faceless network (NFAC/ITBA), the resulting notice issued by the ITO is automatically valid. However, this defense fundamentally misinterprets the role of technology in tax administration.

The CASS mechanism is merely an algorithmic selection tool; it possesses no statutory power to modify or expand an officer’s lawful authority. Once CASS identifies and flags a case for scrutiny, the responsibility to issue the statutory notice falls squarely upon the specific Assessing Officer who holds legal competence over that file. That competence is determined strictly by the returned income under CBDT Instruction No. 1/2011. Algorithmic selection by an automated system cannot override binding board instructions, nor can it confer pecuniary authority upon an otherwise incompetent officer.

Similarly, the Department’s common plea that “the assessee’s PAN was technically mapped to the ITO’s database” at the time of selection cannot validate an invalid notice. Higher courts and tribunals have repeatedly ruled that PAN allocation is a matter of administrative mapping and database management; it does not dictate or override statutory pecuniary jurisdiction. The mandatory monetary limits established by the CBDT are tied explicitly to the quantum of income declared in the return, not to the digital location of a PAN card. If an ITO issues a notice under Section 143(2) for an income level that exceeds their rank-based threshold, the defense of database mapping or time constraints will be rejected outright, and the absence of a preliminary objection by the assessee remains entirely irrelevant to the fatal nature of the defect.

The following precedent supports the plea that automated CASS flags and administrative PAN mapping cannot validate an invalid notice:

Gautam Kumar Sadhu v. ACIT (ITAT Kolkata, 2025 (11) TMI 402): Explicitly rejected the Department’s defense in a CASS-selected case. The Tribunal held that even if a file is algorithmically selected for scrutiny, the statutory notice under Section 143(2) must be issued by the correct jurisdictional officer based on the returned income, and a notice issued by an officer lacking pecuniary authority cannot be saved by system automated selection.

The fatal jurisdictional defect in the present case is anchored directly to the specific financial magnitude of the assessee’s return of income. The assessee filed an Income Tax Return (ITR) declaring a total income of Rs.56,78,860.00. Under the mandatory and binding framework of CBDT Instruction No. 1/2011, any non-corporate return declaring an income exceeding the prescribed statutory threshold of Rs.15,00,000.00 completely strips an Income Tax Officer (ITO) of rank-based competence and automatically places the file into the pecuniary charge of an Assistant or Deputy Commissioner of Income Tax (ACIT/DCIT).

Consequently, the moment this return was filed, the ITO, Ward No. 11, XXXXX, became entirely functus officio over the assessee. The initial notice under Section 143(2) issued by that non-jurisdictional ITO was an absolute nullity from its inception. To validate the scrutiny proceedings, the file should have been formally transferred to the lawful Jurisdictional Assessing Officer (JAO)—the ACIT, Circle-12, XXXXXXX—prior to the issuance of any statutory notice. Because the file was shifted much later, long after the statutory limitation period for issuing a notice under Section 143(2) had expired, and because the transferee ACIT failed to issue a fresh, valid notice within the prescribed timeframe, the subsequent assessment framed under Section 143(3) dated 23.12.2019 is wholly unauthorized and bad in law.

The Hon’ble Supreme Court in ACIT v. Hotel Blue Moon established the foundational rule that the issuance of a statutory notice under Section 143(2) is a mandatory condition precedent, and not a mere procedural formality, for completing a scrutiny assessment. Building upon this constitutional benchmark, the Apex Court in CIT v. Laxman Das Khandelwal further ruled that a fundamental jurisdictional defect in the initiation of assessment proceedings strikes at the root of the matter, cannot be retroactively cured under the provisions of the Income-tax Act, and renders the final assessment order entirely void ab initio.

The boundaries of rank-based competence were strictly defined by the Hon’ble Bombay High Court in Ashok Devichand Jain v. UOI [452 ITR 43], which held that pecuniary jurisdiction defects arising under mandatory CBDT instructions are absolutely incurable. The High Court clarified that the physical or digital location of an assessee’s PAN card cannot justify an Income Tax Officer (ITO) assuming jurisdiction over a case where the declared return of income explicitly breaches the officer’s monetary threshold. Similarly, the Hon’ble Calcutta High Court in PCIT v. M/s Shree Shoppers Ltd. affirmed that a Section 143(2) notice issued by an officer completely lacking pecuniary competence is null, void, and legally non-existent from its inception, noting that the curative provisions of Section 292B cannot be invoked to save a document signed without lawful authority.

The procedural mechanics governing the physical movement of case files have also been strictly enforced by the judiciary. The Hon’ble Calcutta High Court in Kusum Goyal v. ITO [329 ITR 283] held that moving a case file from one officer to another via a simple administrative note or physical letter is patently illegal. The Court ruled that even for intra-city transfers where a prior opportunity of being heard may not be required under the Act, a formal, written statutory order under Section 127 executed by a competent higher authority remains mandatory to vest legal jurisdiction in the transferee officer.

The coordinate Benches of the Income Tax Appellate Tribunal have consistently applied these binding principles to various operational scenarios. In Vipul Mittal v. DCIT (ITAT Delhi), the Tribunal quashed a scrutiny assessment because the initial notice under Section 143(2) was signed by an ITO despite the returned income exceeding the Rs.20,00,000 monetary thresholds. The Tribunal ruled that cross-grade file movements between an ITO and an ACIT/DCIT cannot be saved by the successor-predecessor continuity fictions of Section 129 or internal administrative arrangements under a common PCIT charge. Furthermore, because the underlying assessment was quashed on jurisdictional grounds, the related penalty proceedings were automatically deleted.

The absolute necessity of a valid notice at inception was reinforced by the Delhi Bench of the ITAT in Arjun Rishi v. ITO, which held that CBDT instructions are mandatory and binding on the Department, and valid jurisdiction must exist on the exact date the notice is issued. The Tribunal observed that subsequent attempts to “fix” the error by transferring the case file to a higher-ranked officer cannot validate an initially void notice. In Deepak Gupta v. ACIT (ITAT Delhi), the Tribunal reiterated that where a case file is shifted between officers, the total absence of a fresh, valid notice under Section 143(2) issued by the actual Jurisdictional Assessing Officer (JAO) within the limitation period is fatal to the assessment.

The limits of statutory curative fictions have also been heavily restricted by the Tribunals. In M/S Balaji Enterprises v. ACIT (ITAT Guwahati, the Bench rejected the Revenue’s reliance on Sections 124(3) and 292BB, ruling that the 30-day objection window and the deeming fictions of service participation only apply when an officer validly assumes jurisdiction under standard statutory directions. If an officer completely lacks the initial authority to issue a notice, the document is non-est, and the assessee’s participation cannot validate a complete absence of initial jurisdiction. This view is supported by CIT v. Salarpur Cold Storage (Allahabad/Delhi HC context), which established that a defect under Section 143(2) is not a procedural irregularity and cannot be saved by Section 292BB.

The structural integrity of the assessment chain has been vigorously protected in recent rulings. The Delhi Bench of the ITAT in Ramesh Kumar Gupta v. ITO quashed an entire assessment sequence because a formal Section 127 order was missing even between intra-grade ITO Wards, confirming that Section 129 cannot serve as a substitute for a mandatory transfer order. Furthermore, in Kunshan Q Tech v. ACIT (ITAT Delhi, 2026), the Tribunal ruled that if the underlying Section 127 transfer order itself is void because it was executed by an incompetent PCIT, all subsequent assessment proceedings are non-est, and Section 129 has no curative role.

The primacy of jurisdictional challenges over the factual merits of a case was illustrated by the ITAT Delhi Bench in Mrs. Meena Swarup v. DCIT [ITA No. 2050/Del/2019] In that case, an initial notice under Section 143(2) was issued by an ITO who completely lacked subject-matter jurisdiction over a non-resident assessee, whose file belonged exclusively to the International Taxation wing. The Tribunal determined that subject-matter competence can be challenged at any stage of proceedings and is never waived by the time constraints of Section 124(3). The assessment order was quashed solely on these structural legal grounds, making it unnecessary for the Tribunal to even adjudicate the merits of the high-value addition regarding an alleged bogus Long-Term Capital Gain.

Finally, in Rakshit Estates Pvt. Ltd. v. ITO [ITA No. 3615/Del/2024], the ITAT found that a mandatory notice under Section 143(2) was originally issued by an incompetent officer in Ghaziabad based on a legacy PAN database layout, whereas lawful jurisdiction belonged to an officer in Gurgaon based on the company’s actual declared address. Because the correct jurisdictional officer in Gurgaon failed to issue a fresh, valid statutory notice under Section 143(2) after the file was transferred, the Tribunal struck down additions totaling approximately Rs.62.43 Lakhs solely on jurisdictional grounds, re-enforcing the rules laid down in Raju Biswas v. ITO (ITAT Kolkata) that a valid notice under Section 143(2) from the correct, competent officer is a strict sine qua non before a scrutiny assessment can be completed.

In view of the heavily settled legal position, it is respectfully prayed that the assessment order passed under Section 143(3) of the Act be held as void ab initio and quashed for an absolute want of valid jurisdiction. The moment the assessee filed a return of income exceeding the monetary thresholds prescribed in CBDT Instruction No. 1/2011, the Income Tax Officer (ITO) was rendered functus officio and completely stripped of statutory authority. Consequently, the initial notice issued by the ITO under Section 143(2) was a legal nullity, and a subsequent file transfer cannot retroactively validate an inherently void proceeding.

The structural invalidity of the assessment framed by the Assistant Commissioner of Income Tax (ACIT), Circle-12, XXXXXXXXX is further exposed by the specific timeline of the case file routing. The file was transferred from the Income Tax Officer (ITO), Ward-11, XXXXXXX, to the ACIT, Circle-12, Xxxx, on November 18, 2019. Upon such an intra-departmental transfer of jurisdiction, it is a strict statutory mandate that the transferee Assessing Officer must issue a fresh notice under Section 143(2) within the prescribed limitation period to lawfully assume jurisdiction over the assessee. In the present case, the ACIT, Circle-1, XXXXXX, completely failed to issue this mandatory notice post-transfer, rendering the entire subsequent assessment proceedings non-est in the eyes of the law. Since no valid statutory notice was ever issued by the specific officer who ultimately passed the order, the assumption of authority was unlawful, and the final assessment order must be quashed.

CIT v. Silver Line (Delhi HC) [263 CTR 148]: The Hon’ble High Court unequivocally held that the failure of the Revenue to issue a mandatory statutory notice under Section 143(2) is a fatal jurisdictional flaw that entirely invalidates the ultimate assessment order.

Atish Singla v. ITO, Ward-43(7), New Delhi (ITAT Delhi, SMC Bench) [ITA No. 1185/Del/2021: Specifically dealing with a jurisdictional transition, the Tribunal reiterated that an assessment framed without the proper, fresh issuance of a Section 143(2) notice by the transferee officer post-migration is completely invalid and bad in law.

The article includes judgements on the subject when notice is not issued by the Jurisdictional Assessing Officer and assessment has been framed by JAO without issue of mandatory notice u/s 143(2) of the Act and the notice u/s 143(2) was issued by the non-jurisdictional Assessing Officer who was not having pecuniary jurisdiction and the file being transferred by a simple letter not as per the prescribed norms nu/s 127 of the Act.