2018 (4) TMI 381 - AT - Income Tax

Validity of assessment - non-service of jurisdictional notice u/s 143(2) within the period of limitation by the A.O. having jurisdiction over the case - Held that - Even for earlier and subsequent years the assessee filed return of income at Delhi. The assessment in the present case has been framed by ITO Ward-13(1) New Delhi having jurisdiction over the case of the assessee. The ITO Ward-1(1) Faridabad issued notice under section 143(2) on 23rd October 2007 who was having no jurisdiction over the case of the assessee. The ITO at Delhi issued notice under section 143(2) on 28th July 2008 which was beyond the period prescribed under the Law. It is therefore clear that the A.O. having jurisdiction over the case of the assessee did not issue notice under section 143(2) upon the assessee within the period of limitation provided under the Act. Therefore the first notice issued by ITO Ward-1(1) Faridabad having no jurisdiction over the case of the assessee would not be valid and would not get any jurisdiction over the case of the assessee. The contention of the Ld. D.R. has no merit that ITO Ward-1(1) Faridabad was empowered to issue notice as per PAN or it was issued as per Computerized System of the Department because it is against the provisions of Law. The entire assessment proceedings are vitiated because of nonservice of jurisdictional notice under section 143(2) within the period of limitation by the A.O. having jurisdiction over the case of the assessee. - Decided against revenue

Summary

Issues Involved:
Validity of assessment order based on jurisdiction of Assessing Officer and service of notice under section 143(2) within the statutory period.

Detailed Analysis:

Issue 1: Jurisdiction of Assessing Officer
The case involved a challenge by the assessee regarding the validity of the assessment order due to jurisdictional issues. The assessee contended that the Assessing Officer (A.O.) who passed the assessment order did not have jurisdiction over the case, as the notice under section 143(2) was issued by an A.O. from a different jurisdiction. The A.O. who issued the notice was not the A.O. of the assessee-company and did not have jurisdiction over the case. The assessee argued that the assessment order was null and void due to lack of valid jurisdiction by the A.O.

Issue 2: Service of Notice under Section 143(2)
The primary contention of the assessee was that the notice under section 143(2) was not served within the statutory period by the A.O. having jurisdiction over the case. The notice was initially issued by an A.O. from a different jurisdiction, and later transferred to the A.O. having jurisdiction over the case. However, the notice issued by the A.O. with jurisdiction was beyond the statutory period, rendering the assessment order null and void. The assessee relied on legal provisions and precedents to support the argument that the assessment order was invalid due to the non-compliance with the statutory requirement of serving the notice within the prescribed period.

Judgment:
The Ld. CIT(A) ruled in favor of the assessee, holding that the assessment order was null and void due to jurisdictional issues and non-compliance with the statutory requirement of serving the notice under section 143(2) within the prescribed period. The Ld. CIT(A) emphasized that the A.O. must have jurisdiction over the case to assess the income of the assessee, and the notice must be served within the statutory period to assume jurisdiction. The Tribunal upheld the decision of the Ld. CIT(A), confirming that the assessment proceedings were vitiated due to the lack of valid jurisdiction and non-service of the notice within the statutory period. As a result, the entire assessment order was declared null and void, and the appeal of the Revenue was dismissed.

In conclusion, the judgment focused on the importance of jurisdictional issues and statutory compliance in assessment proceedings, emphasizing the necessity for the A.O. to have jurisdiction over the case and serve the notice within the prescribed period to validate the assessment order.