Assessment Quashed for Want of Jurisdictional Notice Under Section 143(2) – ITAT Delhi Holds Notice by Non-Jurisdictional AO Invalid | Harish Chand Gupta (AY 2017-18)

The Income Tax Appellate Tribunal, Delhi Bench ‘C’, adjudicated the appeal filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals), NFAC, for Assessment Year 2017-18, arising out of an assessment framed under Section 144 of the Income Tax Act, 1961.

The assessee filed the return of income declaring total income of ₹4,29,700/-. The case was selected for complete scrutiny on account of mismatch in import purchases, customs duty discrepancies, and abnormal cash deposits during the demonetization period. Notices under Sections 143(2) and 142(1) were issued, and the assessment was ultimately completed by the Assessing Officer making additions aggregating to ₹1.16 crore.

On appeal, the CIT(A) set aside the assessment order for de novo adjudication. The assessee challenged the validity of the assessment before the Tribunal, contending that no valid notice under Section 143(2) was issued by the Assessing Officer having jurisdiction over the assessee. It was submitted that the notice dated 24.09.2018 was issued by ITO, Ward-66(1), Delhi, who had no territorial jurisdiction over the assessee, whereas the assessment was completed by ITO, Ward-34(2), Delhi.

The Tribunal noted that issuance of notice under Section 143(2) by the jurisdictional Assessing Officer is a mandatory requirement. Relying on several judicial precedents including Vedanta Resources Ltd., Louis Dreyfus Company Asia Pte. Ltd., Nirmal Gupta, NVS Builders Pvt. Ltd., Cosmat Traders Pvt. Ltd., Sanjay Kumar Singhal, and CIT vs. Lalitkumar Bardia, the Tribunal held that an assessment based on a notice issued by a non-jurisdictional Assessing Officer is void ab initio.

The Tribunal further held that the defect was not curable under Section 292BB, as the case involved non-issuance of notice by the competent authority and not mere improper service. Accordingly, the assessment and the appellate order were quashed. The remaining grounds were left open.

Link to download the order

https://mytaxexpert.co.in/uploads/1766570081_1766491160kaPPhw1TO.pdf