Delhi High Court sets aside assessment order for failure to issue notice on time

The High Court of Delhi allowed the writ petition filed by S.K. Industries, setting aside the assessment order dated 31st March, 2016, due to the Assessing Officer's failure to issue a notice under Section 143(2) within the prescribed time limit. The court emphasized the importance of jurisdiction and compliance with statutory timelines in assessment proceedings under the Income Tax Act, 1961.

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Issues Involved:
Challenge to assessment order under Sections 144/143(3) of the Income Tax Act, 1961 due to lack of notice under Section 143(2) by the Assessing Officer having jurisdiction.

Analysis:

Issue 1: Lack of Notice under Section 143(2) by the Assessing Officer
The writ petition challenges the assessment order dated 31st March, 2016, as it was completed without the Assessing Officer issuing notice under Section 143(2) of the Income Tax Act, 1961. The petitioner, S.K. Industries, had its jurisdiction transferred from one AO to another. The AO who issued the notice did not have jurisdiction over the assessee. Despite the petitioner's request to drop the assessment proceedings due to lack of notice within the prescribed time limit, the AO proceeded with an ex parte assessment order. The court noted that the AO with jurisdiction should have issued the notice within the prescribed time limit, as established by previous court decisions. The AO's failure to issue the notice within the time limit rendered the assessment order unsustainable in law. The court set aside the impugned assessment order dated 31st March, 2016.

Conclusion:
The High Court of Delhi, comprising Justice S. Muralidhar and Justice Chander Shekhar, allowed the writ petition filed by S.K. Industries, setting aside the assessment order dated 31st March, 2016, due to the Assessing Officer's failure to issue a notice under Section 143(2) within the prescribed time limit. The court emphasized the importance of jurisdiction and compliance with statutory timelines in assessment proceedings under the Income Tax Act, 1961.

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