ACIT Vs Rajnil Sales Pvt. Ltd. (ITAT Delhi)
Conclusion: Notice under section 143(2) could be issued only by the jurisdictional AO within the time limit of issuing notice prescribed under the law. The jurisdiction over assessee was with the ITO Ward/Circle -9(3) Kolkata and not with the ACIT, Central Circle-14. Therefore, the notice issued by the ACIT, Central Circle-14 was invalid and without jurisdiction.
Held: The case of the assessee was selected for scrutiny assessment and notice under section 143(2). After the search and seizure operation conducted on Prakash Industries Ltd., assessee company’s case was centralized with Central Circle-14, New Delhi, vide an order dated 26.11.2013 passed u/s 127 by CIT Kolkata-III. The issue under examination during the scrutiny was share premium received by assessee. Assessee claimed to have submitted details / documents / explanation as required by AO for the purpose of assessment in the case of assessee under section 143(3) during the course of assessment proceedings. However, AO had completed the assessment proceedings under section 143(3) at an income of Rs 2,72,85,750/- thereby making an addition of Rs 2,71,50,000/- on account share premium treated as unexplained under section 68 and Rs. 1,35,750/- on account of estimated brokerage as unexplained and undisclosed income. Assessee contended that Assistant Commissioner of Income Tax (ACIT), Central Circle 14, New Delhi, 18.09.2013 issued notice under section 143(2) and notice under section 143(2) could be issued only by the jurisdictional AO within the time limit of issuing notice prescribed under the law. It was submitted that the jurisdiction over the assessee was with the ITO Ward/Circle -9(3) Kolkata and not with the ACIT, Central Circle-14. Therefore, the notice issued by the ACIT, Central Circle-14 was invalid and without jurisdiction. Revenue contended that the report received from AO and it was submitted that being a search case assessment service of notice u/s 143(2) was not mandatory. It was held that if notice was part of the record when transferred to CC-14 New Delhi, in pursuance of transfer of further proceedings by virtue of section 127, then at time of passing the assessment order it should have been made part of the assessment order to show as to how the jurisdiction was assumed at Delhi on the basis of notice u/s 143(3) served by JAO at Kolkata. The jurisdictional AO had not issued the notice u/s 143(2), in the prescribed time and mode. Consequentially all the assessment proceedings were vitiated and make the impugned assessment order a nullity.
