2022 (6) TMI 227 - AT - Income Tax

Validity of assessment - no notice u/s 143(2) - Jurisdiction of AO u/s 124 - competent officer to proceed with the assessment by way of issue of notice u/s 143(2) - unexplained cash credit u/s 68 - HELD THAT:- As in this case, the competent officer to proceed with the assessment by way of issue of notice u/s 143(2) of the Act was DCIT/ACIT, whereas, the notice u/s 143(2) has been issued by the ITO, Ward-1(1), Kolkata who did not have any jurisdiction to issue the aforesaid notice. As has been held by the various courts of the country including the Apex Court, the issuance of notice u/s 143(2) by the concerned Assessing Officer of a competent jurisdiction is mandatory to assume jurisdiction to proceed to frame assessment u/s 143(3) - when the notice u/s 143(2) was issued by an officer who did not have jurisdiction to proceed with the assessment and the assessment was framed by the other officer who did not issue the notice u/s 143(2) before proceeding to frame the assessment, then such an assessment order was bad in law. See BHAGYALAXMI CONCLAVE PVT. LTD., DHANLAXMI CONCLAVE PVT. LTD., BINDHYAWASINI DEVELOPERS PVT. LTD. VERSUS DCIT, CIRCLE-13 (1) , KOLKATA [2021 (2) TMI 181 - ITAT KOLKATA].

Thus the assessment order passed by the Assessing Officer (DCIT) was bad in law for want of issuance of notice u/s 143(2) of the Act.

Jurisdiction of Assessing Officers - assessment order passed by the DCIT, Kolkata - Since, in this case, the assessee not only mentioned in the return of income his address as Gandhidham, Gujarat but also brought the said fact into the notice of concerned authorities well in advance in response to the notice u/s 142(1) itself, stating therein that the principal place of business of the assessee was at Gandhidham and the entire operation of the assessee was carried out in the State of Gujarat only, however, neither the Commissioner acted on the aforesaid objection/application of the assessee nor did the DCIT/Assessing Officer referred the matter to the competent authority for transfer of the case to the officer of competent territorial jurisdiction. In view of the provisions of section 124 of the Act, the DCIT, Kolkata did not have any territorial jurisdiction to frame the impugned assessment order, therefore, the assessment order passed by the DCIT, Kolkata is bad in law.

In view of the above discussion, since the legal issue relating to the jurisdiction to frame the assessment not only for want of issue of notice u/s 143(2) of the Act but also for want of competent territorial jurisdiction to frame the assessment is decided in favour of the assessee, therefore, the assessment order passed without jurisdiction is bad in law and is hereby quashed. Appeal of the assessee stands allowed.