Notice u/s 143(2) issued by ITO of non jurisdictional ward and consequent assessment quashed

Notice u/s 143(2) issued by ITO of non jurisdictional ward and consequent assessment framed was invalid and hence both quashed

ABCAUS Case Law Citation:
ABCAUS 2977 (2019) (05) ITAT

Important Case Laws Cited/relied upon by the parties:
Hindustan Transport Co. vs. Inspecting Assistant Commissioner [1991] 189 ITR 326
Abhishek Jain vs. ITO (2018 94 taxmann.com 355
City Garden v, ITO [20121 21 taxmann.com 373/51 SOT 195 (URG)
Microfin Security (P.) Ltd. v. Addl. CIT [2005] 3 SOT 302
Harvinder Singh Jaggi v. Asstt. CIT [2016] 157 ITD 869/67 taxmann.com

In this appeal the assessee had challenged the validity of the assessment completed as without authority of the law for non service of notice u/s 143(2) of the Income Tax Act, 1961 (the Act) by the jurisdictional ITO.

The assessee had filed its return of income by e-filing. The return of income had been filed after demonetization and there were cash deposits.

The case was selected for scrutiny under Computer Aided Scrutiny Selection (CASS). The notice under section 143(2) of the Act was originally served to assessee by the ITO of the ward which was not having required jurisdiction over the assessee.

However, subsequently, the assessment proceedings were transferred to the jurisdictional ITO who issued show cause notice for scrutiny assessment proceedings framing assessment under section 143(3) read with section 147 of the Act.

The case of the assessee was that there was no notice issued by the jurisdictional AO of the assessee and hence, the very assessment proceedings initiated by the ITO by issuing notice under section 143(2) was without any jurisdiction and liable to be quashed.

On the other hand, the Revenue argued that notice under section 142(1) of the Act was issued and served to the assessee within the prescribed time limit by the ITO as the assessee case was selected for scrutiny under CASS.

It was argued that when it came to notice of the Revenue that the assessee had actual jurisdiction on this case with another ITO therefore the case was transferred to the concern AO. It was contended that the range was same and both the AOs’ were having concurrent jurisdiction, which was lying with the range head.

In any case, the Department argued that in view of the provisions of section 124(3)(a) of the Act if in case the assessee had any objection with regard to the territorial jurisdiction, the objection against territorial jurisdiction is required to be filed within 30 days, which was not done by the assessee.

The Tribunal observed that this issue had been dealt extensively in the case of co-ordinate Bench decision which considered this issue and after considering several decisions on the subject, finally quashed the assessment as without jurisdiction.

Accordingly, the Tribunal following the decision of co-ordinate Bench held that the notice under section 143(2) was issued without jurisdiction and hence, assessment framed was invalid. In result, notice issued under section 143(2) of the Act and consequent assessment framed was quashed.