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TMI Blog2022 (12) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... Writ Petitions, one raising a duel challenge, to a notice under Section 148 of the Act dated 12.12.2019 and an order dated 23.07.2021 rejecting the objections of the petitioner in regard to assumption of jurisdiction for re-assessment under Section 147 of the Act, and the other, a notice dated 24.11.2020, issued by the Transfer Pricing Officer (TPO)/R2. 3. The sequence of dates and events leading to the cause of action agitated in these Writ Petitions is as follows: i) The proceedings relate to assessment year (AY) 2016-17. In the financial year relevant to that year, the petitioner had sought and obtained a Nil tax withholding certificate in respect of certain amounts that it had received from Indian Oil Corporation Limited and Indian Oil LNG Private Limited for providing project management consultancy services. ii) A return of income had been filed by the petitioner in time, duly accompanied by relevant financials. iii) The return was not processed under regular provisions; instead, on 12.12.2019 it received a notice under Section 148, in compliance of which a return was filed, in line with the regular return filed earlier. iv) The petitioner also sought the reasons on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (in short 'TOLA Act') extends the aforesaid timelines to 31.03.2021. xiv) However, no notice under Section 143(2) had been received at the time when the Writ Petition was filed, which is on 22.09.2021, long past the expiry of limitation. This, according to Mr.Nishanth Thakkar, learned counsel for the petitioner, vitiates the proceedings fatally, as a consequence of which, the impugned notice under Sections 148, the order disposing the objections to assumption of jurisdiction and the subsequent reference to the TPO are all liable to be set aside as being bad in law. 4. The specific argument is that assumption of jurisdiction by an officer commences with, and is triggered by, the issuance of a notice under Section 143(2) and failure to do so, would compromise the proceedings fatally. 5. The petitioner relies on several decisions in support of its submissions, being: (i) Assistant Commissioner of Income-tax v. Hotel Blue Moon (321 ITR 362(SC)) (ii)Deputy Commissioner of Income Tax & Another v. Indus Towers Limited [SLP(Civil) Diary No(s).34285/2018 dated 21.01.2019] (iii)Sapthagiri Finance & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued within 6 months, the revenue must face the consequences of this, irrespective of whether a notice has been issued belatedly or no notice has been issued at all. 9. She relies on a decision of this Court in the case of B.Kubendran v. Deputy Commissioner of Income Tax, Central Circle 2(1), Chennai (434 ITR 161) rendered in the context of the new scheme of block assessment under Sections 153A and 153C of the Act. Therein, this Court has noted a distinction between the erstwhile scheme of block assessment under Chapter XIV B and the presently prevailing scheme of block assessment, concluding that the new scheme does not require the issuance of a notice under Section 143(2) to kick start the assessment. 10. The framing of a regular assessment/re-assessment is triggered by the issue of a statutory notice under Section 143(2) of the Act, which constitutes a pre-condition for the assumption of jurisdiction by the assessing officer concerned. However, in the case of a search assessment, the assumption of jurisdiction is conveyed with the issuance of a notice under Section 153A, in the case of a searched entity, and recording of a satisfaction note and issuance of notice under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the procedure laid down under Section 143(2) of the Act, the assessment had to fail. 13. In the above case, the Court records at paragraph 6 that no notice was issued under Section 143(2) of the Act, which is a position analogous to that in the present matter. 14. The Delhi High Court in Shri Jai Shiv Shankar Traders (P) Ltd. (supra) has answered this issue along identical lines as in the above decisions, stating at paragraph 19 as follows: 19. The resultant position is that as far as the present case is concerned the failure by the AO to issue a notice to the Assessee under Section 143(2) of the Act subsequent to 16th December 2010 when the Assessee made a statement before the AO to the effect that the original return filed should be treated as a return pursuant to a notice under Section 148 of the Act, is fatal to the order of reassessment. 15. The decision of the Apex Court in Sapthagiri Finance & Investments (supra) and various decisions of the Delhi, Bombay, Rajasthan, Kerala, Karnataka, Calcutta, Gauhati, Chattisgarh and Allahabad High Courts, to similar effect, have also been noticed. So too in the case of Silver Line (supra) by the same Bench of the Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission. 21. Thus, this point also stands clarified and with that, there is complete uniformity in the conclusion of Courts on the issue as to whether non-issue of notice under Section 143(2) would vitiate the assessment, answering the issue in the affirmative. 22. CBDT Instruction No.3 of 2003 elucidates upon and explains the provisions relating to Transfer Pricing, as contained in Sections 92 and 92F of the Act that had come into force, with effect from assessment year 2002-03 onwards. 23. The Circular reinforces the position that it is sine qua non for the Assessing Officer to assume jurisdiction prior to taking any steps in the matter of assessment, including reference of the matter to the TPO. The jurisdiction assumed by an officer in terms of Section 120 of the Act is activated by issuance of notice under Section 143(2), and as a consequence, failure to issue the statutory notice will lead to the inevitable result of the Officer not having assumed jurisdiction, for all practical purposes. 24. As a last ditch effort, learned standing counsel would point out that the impugned order rejecting the objections to assumption of jurisdiction came to be passed only on 23.07.2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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