Reassessment Quashed as Section 143(2) Notice Was Issued Without Jurisdiction: ITAT Kolkata

Baljit Securities Pvt. Ltd. Vs ACIT (ITAT Kolkata)

The appeal arose from reassessment proceedings for Assessment Year 2013-14. The assessee had originally filed its return declaring nil income, and the assessment was completed under Section 143(3) at a total income of ₹62,67,810. Subsequently, the assessment was reopened based on information from the Investigation Wing alleging that the assessee had received ₹20,00,000 from two alleged paper/shell companies. The Assessing Officer made an addition of ₹20,00,000 under Section 68, which was upheld by the Commissioner (Appeals). The assessee challenged the order before the Tribunal.

The assessee primarily questioned the jurisdiction of the reassessment proceedings. It contended that the statutory notice under Section 143(2) had been issued by ACIT, Circle 15(1), Kolkata, whereas the reassessment order was ultimately passed by DCIT, Circle 8(1), Kolkata, without any valid assumption, transfer or continuation of jurisdiction. The assessee also argued that the addition under Section 68 represented sale proceeds of shares already recorded in the books and taxing the same again would result in double taxation. The Revenue maintained that the transfer of the case was within the jurisdiction of the competent authority and that the assessee could not challenge the jurisdiction.

The Tribunal examined CBDT Instruction No. 1/2011 dated 31.01.2011 governing pecuniary jurisdiction. It observed that, since the assessee had declared nil income, jurisdiction to issue notice under Section 143(2) lay with the Income Tax Officer (ITO) and not with the ACIT. The Tribunal relied extensively on an earlier coordinate bench decision in ABC India Limited, which had considered the same jurisdictional issue in the light of the Supreme Court, the Calcutta High Court and earlier Tribunal decisions.

The Tribunal referred to Sections 120 and 127 of the Income-tax Act and the CBDT instructions governing allocation and transfer of jurisdiction. It noted that jurisdiction can be determined not only on the basis of territorial limits but also with reference to classes of persons and income. It further observed that transfer of jurisdiction requires compliance with the statutory procedure under Section 127 and that the record did not establish a valid assumption or transfer of jurisdiction in accordance with law.

The Tribunal also relied on several judicial precedents, including decisions of the coordinate benches in Amiya Gopal Dutta, Raghvendra Mohta, Hillman Hosiery Mills Pvt. Ltd., Soma Roy, Krishnendu Chowdhury, Rupasi Bangla Agro Industries Pvt. Ltd., and the judgments of the Calcutta High Court and the Supreme Court in CIT v. Laxman Das Khandelwal. It noted that these decisions consistently held that issuance of a valid notice under Section 143(2) by the jurisdictional Assessing Officer is a mandatory requirement and that Section 292BB cannot cure the complete absence of a valid jurisdictional notice.

Following the earlier coordinate bench decisions, the Tribunal held that the reassessment had been framed without jurisdiction because the notice under Section 143(2) was issued by an officer who lacked pecuniary jurisdiction. It concluded that the reassessment proceedings were invalid and liable to be quashed. Since the appeal succeeded on the jurisdictional issue, the Tribunal held that the challenge to the addition under Section 68 had become purely academic and did not require adjudication.

Accordingly, the Tribunal quashed the reassessment on the ground of lack of jurisdiction and allowed the assessee’s appeal.

FULL TEXT OF THE ORDER OF ITAT KOLKATA

This appeal filed by the Revenue is directed against the order dated 23.12.2018 of the National Faceless Appeal Centre (NFAC) passed under Section 147/143 of the Assessment Year 2013-14 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”).

2. The brief facts of the case of the assessee is that assessee company M/s Baljit Securities Pvt. Ltd filed its return of income for the assessment year 2013-14 declaring total income “nil”. The return of income of the assessee was selected for scrutiny and an assessementU/s 143(3) completed at a total income of Rs. 62,67,810/­. Subsequently, the assessment was reopened on an information received from the office of the Assistant Director Income Tax (Investigation) regarding receipt of funds from paper/shell company,during the course of assessment proceedings it was found that assessee had received Rs. 7,00,000/- from M/s Afterlink CommericialPvt. Ltd and Rs. 13,00,000/- from M/s JalnayanVinimay Pvt Ltd.The Ld. AO after considering the submission made by the Assessee made an addition of Rs. 20,00,000/- to the total income of the assessee U/s 68 of the Act.

Aggrieved by the said order assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been dismissed.

Being aggrieved by and dissatisfied the assessee preferred appeal before us.

3. The Ld. AR challenges the very impugned order by raising an issue that the notice issued U/s 143(2) by non-judicial AO and therefore the notice itself as well as the consequential assessment framed as nullity and bad in law. The Ld. AR submits that notice u/s 143(2) was issued by the ACIT Circle 15(1) Kolkata whereas reassessment order was ultimately passed by DCIT Circle 8(1) Kolkata without any valid assumption/transfer/continuation of jurisdiction in accordance with law. The Ld. AR further submits that the Ld. AO as well as the CIT(A) erred in law and on facts in sustaining addition U/s 68 of the Act of Rs. 20,00,000/- though the amount represent sale proceeds of shares (stock/opening holding) duly recorded in books, supported by sell bills/purchase bills, trade register, ledger and bank statement and already form part of business, results, taxing it again results in double taxation. The Ld. AR placed reliance on the following order of the Tribunal which are as follows:-

(1) ITA No. 8835/Del/2019 Brij resourcepvt limited vs ITA

(2) ITA No. 1645/Kol/2025 ABC India Limited versus DCIT Circle 11 Kolkata.

4. Contrary to that Ld. DR supports the impugned order by submitting that transfer of case was within the jurisdiction of concerned CIT(A) and therefore the assessee had no locus standi to question the jurisdiction of the ACIT Circle 15(1)Kol.

5. Upon hearing the submission of the counsel and on perusal of the record we find that notice U/s 143(2) was issued by ACIT Circle 15(1) Kol. instead of ITO as income declared by the assessee as “nil” and as per the instruction No. 1/2011 ( F. No. 187/12/2010/ IT (A-1) dated 31-01-11, Income up to Rs. 20,00,000 in a corporate return and up to Rs. 15,00,000/- in non-corporate returns jurisdictional AO was ITO. we have gone through the order passed by this coordinate Bench in ITA No. 1645 and this issue has been dealt by the tribunal considering the judgment of the Apex Court as well as jurisdictional High Court and allowed the same in favour of the assessee.It is essential to reproduce the judgment passed by this Coordinate Bench in ITA no.1645/2025.

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 10.07.2025 for the AY 2015-16.

The only issue raised by the assessee is against the notice issued u/s 143(2) of the Act by non-judicial AO and therefore, the notice itself as well as the consequential assessment framed u/s 143(3) of the Act dated 27.12.2017, is nullity and bad in law.

3. The facts in brief are that the assessee filed the return of income on 29.09.2015, declaring total income at nil. The case of the assessee was selected for scrutiny and notice u/s 143(2) of the Act dated 28.09.2016 and notice u/s 142(1) dated 18.07.2017, were issued and duly served upon the assessee. The assessee complied with the said notices. Finally, the assessment was framed by the Id. AO making additions/ disallowance to the tune of 154,22,108/-. The assessee has not challenged this legal issue before the Id. CIT (A).

4. The Id. AR vehemently submitted before us that the income as per the return of income was nil and therefore the jurisdiction to issue notice u/s 143(2) in terms of CBDT instruction No.1/2011 (F. No. 187/12/2010-IT(A-1), Dated 31.01.2011 is with ITO and not with the DCIT, Circle 11(1), Kolkata, who has issued notice u/s 143(2) and also framed the assessment. The Id. AR stated that notice u/s 143(2) of the Act by the DCIT, Circler 11(1), Kolkata, which is in violation of pecuniary jurisdiction of the CBDT instruction No.1/2011 (F. No. 187/12/2010-IT(A-1), Dated 31.01.2011. 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 Id. AR therefore prayed that the notice u/s 143(2) dated 28.09.2016 is invalid and escaped the assessment framed by the Id. AO. The Ld. A.R in defense of arguments relied on the decision of the Jurisdictional High Court in the case of Kusum Goyal vs. ITO & ors in GA No. 81 of 2010 WP No. 1229 of 2009 wherein the Hon’ble Court has decided the similar issue in favour of the assessee. The Id. AR also submitted that even on pecuniary jurisdiction was notwith the DCIT, Circle 11(1), Kolkata as the income return was Nil and accordingly the return of income was filed with ITO. The Id. AR argued that the order passed by the DCIT, Circle 11(1), Kolkata is invalid on this count also. The Ld. A.R also submitted that Co-ordinate Bench of Kolkata in the case of Amiya Gopal Dutta vs. DCIT in ITA No. 126/Kol/2022 for AY 2016-17 dated 16.11.2022 has decided the Identical issue in favour of the assessee. The Case of the assessee is also covered by the decision of the co-ordinate Bench in case of Raghvendra Mohta Vs. ACIT in ITA No.2416/KOL/2017 vide order dated 08.04.2024. The Ld. Counsel therefore prayed that the assessment may kindly be quashed.

5. The Ld. D.R on the other hand relied on the order of authorities below. The Id. DR contended that the transfer of case was within the jurisdiction of concerned CIT and therefore the assessee had no locus standi to question the jurisdiction of the DCIT, Circle 11(1), Kolkata.

6. After hearing the rival contentions and perusing the material on record, I find that though the notice u/s 143(2) was issued by DCIT, Circle 11(1), Kolkata who is the non-jurisdictional AO instead of ITO. The case of the assessee is also covered by the decision of Co-ordinate Bench decision in the case of Amiya Gopal Dutta (supra). For the sake of ready reference, the operative part is extracted below:

At the outset, the Ld. Counsel for the assessee submitted that the assessment passed u/s 144 of the Act dated 17.12.2018 is void, ultra vires and nullity in the eyes of law as the same was passed by the Assistant Commissioner of Income Tax, Circle-1(1), Jalpaiguri whereas as per the CBDT circular 1/2011 [F. No. 187/12/2010-IT(A-1)] dated 31.01.2011 the Board has issued instruction in exercise of power u/s 119 of the Act that In case of non-corporate assessee where the income is declared up to Rs. 15 Lacs, the assessment would be framed by ITO and above Rs. 15 Lacs AC/DCs whereas the said limit was set at Rs. 20 Lacs and above Rs. 20 Lacs ITO/ and AC/DCs respectively. TheLd. A.R. submitted that since the order has been passed in violation of instruction of CBDT by the Assistant Commissioner of Income Tax, Circle-1(1), Jalpaiguri which is not Hooghly a metro city and therefore the same may kindly be quashed. In defense of his arguments in ITA No. 850/Kol/2019 for AY 2011-12 dated 12.08.2021 and Sanat Kumar Sahana vs. ACIT in ITA No. 2202/Kol/2015-16 dated 29.05.2020. Therefore, the Ld. A.R submitted that the appeal of the assessee may kindly be allowed by quashing the said assessment.

6. The Ld. D.R on the other hand submitted that how this happened has to be ascertained from the office of AO. Besides the Ld. D.R referred to the provisions of Section 29288 of the Act by submitting that this issue was never raised by the assessee either in the assessment proceedings or in the appellate proceedings and therefore the assessee should not be allowed to raise this issue at this stage. Alternatively the issue may be set aside to the file of the AO and since this is a procedural defect that may be cured by the authorities below.

7. We have heard the rival submissions and perused the material on record. Undisputed facts are that the assessee is a non corporate assessee and has declared total income of Rs. 10.02,340/- during the year. We observe that the notice u/s 143(2) of the Act was issued by ITO, Ward-1(1), Jalpaiguri to the assesse whereas the assessment was framed by the Assistant Commissioner of Income Tax, circle-1(1), Jalpaiguri. 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 ΝΟ. 187/12/2010-IT(A-1)],

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-1)), DATED 31­1-2011

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 Increase the limits as under:

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 non-corporate assessee in non-metro cities, the ITR filed uptoRs. 15 lace has to be assessed by ITO and therefore in the instant case the assessment framed in violation of above instruction 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:

I have considered the rival contentions of both the id, 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

(2) 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 sub-sections (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, theassessment 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.

6. 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, Ward-3(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 2015-16, order dt. 8 January, 2020, under identical circumstances, held as under:-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 Id. Counsel for the assessee submitted that as per Board Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-1)], 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, ward-1(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 Id. Counsel for the assessee relied on certain case-law, which I would be referring to as and when necessary.

6. The Id. 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 29288 of the Act, comes into play and the assessment cannot be annulled. On merits, he relied on the orders of the lower authorities.

7.1 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:-

8.1 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 issue 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 l.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, Circle-27, Haldia on 24.09.2014 and immediately ACIT issued notice u/s. 142(1) ofthe Act on the same day. From the aforesaid facts the following facts emerged:

The assessee had filed return of income declaring Re 50,28,040, The ITO issued notice under section 143(2) of the Act on 06.09.2013.

The ITO, Ward-3, Haldia taking note that the income returned was above Rs. 15 lacs transferred the case to ACIT, Circle-27, Haldia on 24.09.2014.

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 filled 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 goarum 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 Income-tax 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.”

8.2. The Hon’ble High Court of Calcutta in the case of West Bengal State Electricity Board vs. Deputy Commissioner of Income Tax, Special Range -1, 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. The Hon’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 29288 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 29288 would be a complete answer.

On the other hand, Mr. Ankit Vijaywargia, 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 29288 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 towing the prepositions of low led down in all these case-law and al plying the same to the facts of the case, we hold that wolf that the assessment order is bed in tow for the reason that the Assessing Officer Aaving Audition over the assessee, has not issued a notice 143(2) the Act as required by the statute. Notice issue by the officer having no of the Act assesseeis null and void. When a notice is issued by an jurisdiction, Section 292BB of the Act, does not comes officer having no the argument of the ld. D/R that objection u/s 124(3) into play. Coming to the argument of the Act has to be taken by the assessee on rectifying notice 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 lethal of statutory 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.

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 authentic passed the order / order u/s 143(3) of the Act le. DCIT-13(1), Kolkata has not issued a notice under Section 143(2) of the Act and also for the reason that the jurisdiction of these cases lies with the 170 and not the DCIT, Hence all the orders passed by the CIT(A) In these four cases are hereby quashed and the appeals of the assessees are allowed.”

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.

Since the facts before us are materially similar to ones as decided by the Co-ordinate Bench of the tribunal, we, respectfully the decision of the coordinate bench, quash the assessment order passed on the ground of lack of jurisdiction. Accordingly the appeal of the assessee is allowed.”

6.1. It is pertinent to note that in the Co-ordinate Bench decision the issue of pecuniary jurisdiction has been decided whereas in the above High Court order issue of transfer of jurisdiction in terms of Section 127(1), (2) and (3) has been discussed and decided. We also note that the Co-ordinate Bench in the case of M/s Rupasi Bangla Agro Industries Pvt. Ltd. vs. ITO in ITA No. 909/Kol/2023 for AY 2013-14 dated 14.12.2023 has decided the issue u/s 143(2) in favour of the assessee after distinguishing the decision of Hon’ble Apex Court in the case of DCIT (Exemption) & Another vs. Kalinga Institute of Industrial Technology; Special Leave to Appeal (C) No(s). 29304/2019 and WP(C ) No. 898/2017 which was relied by the Ld. D.R. to defend hisarguments that the notice u/s 143(2) of the Act if issued by wrong AO then the assessee is at liberty to take objection to raise the issue within one month of the issuance of the notice in the assessment proceedings. The Co-ordinate Bench held that the facts of the case of Kalinga Institute of Industrial Technology (supra) are distinguishable and not applicable. In view of the above facts and circumstances and ratio laid down, we are inclined to quash the assessment framed and the appeal of the assessee is allowed.

In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 14.01.2026.

6. Keeping in view of the facts and considering the order of the tribunal as discussed above, we are inclined to quash the assessment framed and appeal of the assessee is allowed on legal issue. Since we have decided the appeal on the legal issue the other issue is only in academic in nature.

In the result the appeal of the assessee is allowed. Order pronounced in the open court on–

Kolkata, the 15^th May, 2026.