INCOME TAX ACT, 1961

Section 143(3), section 120(1)/(2), 124(1)

Assessment - Validity - AO having jurisdiction over assessee not issued notice under section 143(2) but notice issued by another ITO -

Assessee challenged validity of assessment under section 143(3) on the ground that jurisdiction over assessee was with ITO, Ward-8(3), Kolkata and whereas ITO, Ward-33(1), Kolkata, issued the notice under section 143(2) on 6-8-2013 and thereafter on 3-2-2014, file was transferred to ITO, Ward-8(3), Kolkata. Assessee submitted that ITO Ward-8(3), Kolkata should have issued notice under section 143(2), as required by law, as he was the officer having jurisdiction over assessee company. Assessee pointed out that there was no change in address of the company during previous years, as well as for the following years and address on which PAN Card was taken was also the same address and jurisdiction over assessee was always with ITO, Ward-8(3), Kolkata. Held: The clear and unambiguous words used in section 124(1), are that AO should be vested with the Jurisdiction by virtue of an order, notification or directions issued under section 120(1) or under section 120(2). Therefore, only the Officer who has been vested with jurisdiction conferred under section 120(1) and 120(2) can act as AO and issue notice under section 143(2). Even though AO has been vested with Jurisdiction under section 124(1), by the Board, yet assessee may dispute such jurisdiction vested under section 124(1). Such dispute can be raised under section 124(3), within one month of issuance of notice under section 143(2). In the instant case, jurisdiction over assessee was never vested with ITO, Ward 33(1), (non corporate assessee ward) who issued notice under section 143(2). In fact, the assessee also filed return before ITO, Ward-8(3), Kolkata who was having jurisdiction over assessee as per the Boards Notification, which fact was evident from the copy of acknowledgements of return of income for the last few years.Notice under section 143(2), however, was issued by ITO, Ward 33(1), Kol who had not been vested with jurisdiction over assessee company by CBDT. As AO who had jurisdiction over assessee i.e., Income Tax Officer Ward-8(3), Kolkata had not issued notice to the assessee under section 143(2) as mandatorily required under the Act, assessment framed under section 143(3) ,was bad in law.

Relied:ACIT & Anr. v. Hotel Blue Moon 321 ITR 362 (SC).

REFERRED :

FAVOUR : in assessee's favour

A.Y. :

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