Order passed u/s 143(3) quashed as notice u/s 143(2) was issued by non-jurisdictional AO

Bharat Bhushan Verma Vs ITO (ITAT Raipur)

ITAT Raipur held that AO having jurisdiction over the case passed the order u/s 143(3) of the Income Tax Act without issuing notice u/s 143(2). Accordingly, the matter quashed for want of valid assumption of jurisdiction as notice u/s 143(2) was issued by non-jurisdictional AO.

Facts- The assessee, who is engaged in the business as that of a transporter and mining contractor, had e-filed his return of income for A.Y.2015-16 on 28.09.2015. Subsequently, the case of the assessee was selected for scrutiny assessment. Notice u/s. 143(2) of the Act was issued by the ACIT, Raipur.

During assessment proceedings, it was, inter alia, observed by the A.O that the assessee had in his “balance sheet” for the immediately preceding year, i.e. A.Y.2014-15 showed Chhattisgarh Ware Housing Corporation (CGWHC) as a debtor. On a perusal of the records, it was observed by the A.O. that the assessee had raised a bill. However, the A.O. observed that in the assessee’s balance sheet for the year under consideration, the party mentioned above i.e. CGSWC was not reflected as a debtor.

The A.O concluded that the difference in the amounts i.e. Rs. 20,82,777/-, was the unaccounted/short receipt of the assessee for the year under consideration. Accordingly, the A.O. passed order u/s. 143(3) dated 28.11.2017 determining income of assessee as Rs. 27,39,600/-.

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