INCOME TAX ACT, 1961

Section 143(3)

Assessment - Validity - Section 143(2) initially issed by AO not having jurisdiction over assessee - Issuance by correct jurisdiction AO beyond limitation period

Assessee was a labour contactor engaged in supply of the manpower. As per master Notification, dated 3-7-2001 issued by CBDT and subsequent order by Joint Commissioner, dated 1-8-2001, jurisdiction of persons having income from business of contactor-ship, including supply of labour for carrying out any work was assigned to Joint Commissioner, Range-38, New Delhi. Assessments for assessment years 2007-08 and 2009-10, had been completed by Asstt. CIT, Circle--38, New Delhi and Income Tax Officer, Ward 38(2) respectively, who fells under jurisdiction of Joint Commissioner, Range-38, New Delhi. Return for the year under consideration was filed electronically mentioning jurisdiction under Range 38, New Delhi. Thus, according to him, the jurisdiction of the assessee lies in Range-38, New Delhi. And notice under section 143(2) for the year under consideration could have been issued within six month from the end of financial year i.e. 30-9-2011 and same had been issued by Dy.CIT, Circle-21, New Delhi which was not the jurisdictional AO in thec ase of assessee. On the objection raised by assessee vide Letter, dated 7-8-2012 filed on 8-8-2012, challenging jurisdiction of AO who issued notice under section 143(2) scrutiny proceedings were transferred to ITO, Ward-38(2), who passed assessment under section 143(3) on 1-3-2013. Assessee challenged validity of order passed under section 143(3) on the ground that no notice under section 143(2) had been issued by jurisdictional AO within limitation period no notice under section 143(2) had been issued by jurisdictional AO within limitation period available as per proviso to section 143(2).Held: Notice under section 143(2), dated 1-9-2011 issued by the Dy. CIT, Circle-37(1) was not valid being issued by AO not having jurisdiction over assessee. Notice under section 143(2) by correct jurisdiction AO had been issued on 30-8-2012, whereas limitation for issue of notice under section 143(2) expired on 30-9-2011 and therefore, this notice being beyond the period of limitation, was not a valid notice. Notice dated 30-8-2012 issued by correct jurisdiction officer. AO beyond the period of limitation was also invalid and thus, assessment order passed without acquiring correct jurisdiction for scrutiny by way of notice under section 143(2) was void ab initio.

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