Case Law Details
Dilip Kumar Show Vs ITO (ITAT Kolkata)
143(2) by Wrong AO Is Jurisdictional Suicide: Kolkata ITAT Quashes Entire Assessment – Non-Jurisdictional Notice, Null Assessment: ITAT Kolkata Reaffirms Mandatory 143(2)
Kolkata ITAT ‘SMC’ Bench in Dilip Kumar Show vs ITO, Ward-30(6), Kolkata (ITA No.2080/Kol/2025, AY 2017-18, order dated 23-12-2025) allowed the assessee’s appeal and quashed the assessment u/s 143(3), holding that issuance of notice u/s 143(2) by a non-jurisdictional AO renders the entire assessment a nullity.
Assessee, a wholesale grocery trader, filed return declaring income of ₹5.90 lakh. The case was selected for scrutiny on the issue of cash deposits during demonetisation. Notice u/s 143(2) dated 09-08-2018 was issued by ITO, Ward-28(2), Kolkata, whereas the assessment was ultimately framed by ITO, Ward-30(6), Kolkata, without issuing a fresh jurisdictional notice u/s 143(2).
Before ITAT, the assessee raised an additional legal ground challenging jurisdiction. Tribunal admitted the same, holding it to be a pure question of law, relying on Jute Corporation of India (SC), NTPC (SC) and PCIT vs Britannia Industries Ltd (Cal HC).
On merits, ITAT held that:
- Notice u/s 143(2) must be issued by the very AO who frames the assessment
- Notice by a non-jurisdictional AO cannot cure the defect
- Assessment framed dehors a valid 143(2) is void ab initio
- Such a defect goes to the root of jurisdiction and is incurable
Tribunal followed its own coordinate-bench decision in ARS Financial Consultants Pvt Ltd vs ITO and Calcutta High Court rulings including PCIT vs Nopany & Sons and PCIT vs Cosmat Traders (P) Ltd.
Accordingly, ITAT quashed the assessment in toto, without going into the merits of additions.
Key takeaway:
Section 143(2) is a jurisdictional foundation, not a procedural formality.
If the AO issuing 143(2) and AO completing assessment are different, and no fresh notice is issued by the jurisdictional AO, the entire assessment collapses, irrespective of the merits of additions.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The present appeal filed by the assesseearises from order dated 08.01.2024passed u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, (NFAC)[hereafter “the Ld.CIT(A)].
2. At the time of hearing, the assessee raised additional ground which is extracted below:
“For that the notice u/s 143(2) issued by the AO was without jurisdiction and not in accordance with law. Therefore the entire assessment is liable to be quashed.”
3. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of appeal challenging the jurisdiction of the AO to make addition. In our opinion the issue raised in the additional ground is a purely a 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.
4. We find that the assessee filed return of income on 30.10.2017 disclosing total income of Rs. 5,90,710/-. The assessee is engaged in wholesale trading of grocery items. The case of the assessee was selected for scrutiny on account of cash deposits during demonetisation period. Accordingly, notice u/s 143(2) of the Act was issued on 09.08.2018 by ITO, Ward 28(2), Kolkata whereas the assessment was framed by ITO Ward 30(6) Kolkata without issuing notice 143(2) of the Act. Consequently, the assessment framed by the ITO Ward 30(6) Kolkata is invalid and cannot be sustained. The assessment framed dehors issuing notice 143(2) is nullity and bad in law. The case of the assessee finds support from the decision of ARS Financial Consultants Pvt. Ltd. Vs. ITO in ITA No. 816/KOL/2024 for A.Y. 2012-13 vide order dated 28.08.2025, wherein similar issue has been decided favour of the assessee. The operative part is as under:-
“2.4.After hearing the rival contentions and perusing the materials available on record, we find that the notice that the assessee filed the return of income for the impugned assessment year on 29.11.2012, with ITO, Ward 4(1)/ Kol while the notice u/s 143(2) of the Act was issued by ITO, Ward 34(1), Kolkata on 29.08.2013, a copy of which is available at page no.431 of the Paper Book. Thereafter the assessee wrote to the Commissioner of Income Tax, Kolkata-XII, Aayakar Bhawan Poorva, Kolkata, informing that the jurisdiction of the assessee has been allotted to ITO Ward-34(1)/ Kolkata, whereas being a private limited company jurisdiction lies with ITO Ward 4(1), Kol under CIT -II/Kol and accordingly, requested the commissioner to migrate the PAN in proper jurisdiction. The notice u/s 142(1) dated 10.02.2015, was issued by ITO Ward 4(3), Kolkata calling upon the assessee to furnish the various details and information which were accordingly, submitted also before the ld. AO and the assessment was accordingly framed bt ITO Ward 4(3) Kolkata. Thus we note that the ITO, Ward 4(3), Kolkata has not issued the jurisdictional notice u/s 143(2) of the Act which is a serious lapse on the part of the AO which goes to the root of the matter rendering the assessment framed u/s 143(3) of the Act by the ld. AO to be nullity and invalid in the eyes of law. The case of the assessee s squarely covered by the following decisions namely i) PCIT Vs. Nopany& Sons (supra) and ii)PCIT Vs Cosmat Traders (P) Ltd. (supra). In both the above decisions, the Hoin’ble Kolkata High Court has held that the assessment framed by the jurisdictional AO without issuing notice 8u/s 143(2) of the Act is invalid while notice u/s 143(2) was issued by the non-jurisdictional AO. Therefore we, accordingly, hold that the assessment framed by the AO Ward -4(3) Kolkata is invalid and is accordingly quashed. The ground no. 1 is allowed.”
5. The facts of the instant case are substantially similar as decided by the coordinate bench. We, therefore, respectfully following the decision of the co-ordinate bench quash the assessment framed u/s 143(3) of the Act on the ground that notice being issued u/s 143(2) of the Act by non-jurisdictional Assessing Officer and not by the AO framing the assessment.
6. In result, appeal of the assessee is allowed.
7. Order pronounced on 23.12.2025
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