Appeal granted, assessment quashed due to invalid notice and lack of jurisdiction.

The Tribunal allowed the appeal, quashing the assessment under section 143(3) due to an invalid notice issued by the Assistant Commissioner of Income-tax and lack of jurisdiction of the Income-tax Officer. The order was pronounced on November 18, 2016.

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Issues Involved:
1. Validity of the notice under section 143(2) of the Income-tax Act, 1961.
2. Jurisdiction of the Income-tax Officer.
3. Confirmation of addition under section 40(a)(ia) of the Income-tax Act, 1961.

Detailed Analysis:

1. Validity of the notice under section 143(2) of the Income-tax Act, 1961:
The primary issue raised by the assessee was the validity of the notice issued under section 143(2) of the Income-tax Act, 1961. The assessee contended that the notice dated September 14, 2011, issued by the Assistant Commissioner of Income-tax, Haldia, was without jurisdiction as per the Central Board of Direct Taxes (CBDT) Instruction No. 1 of 2011, dated January 31, 2011. According to this instruction, for non-corporate returns with income up to Rs. 15 lakhs in Mofussil areas, the jurisdiction for issuing such notices vested with the Income-tax Officer, not the Assistant Commissioner of Income-tax. The Tribunal found that the notice under section 143(2) was indeed issued by the Assistant Commissioner of Income-tax, Circle-Haldia, which was beyond his jurisdiction as per the CBDT Instruction. Consequently, the notice was deemed invalid, bad in law, and liable to be annulled.

2. Jurisdiction of the Income-tax Officer:
The second issue was whether the Income-tax Officer, Ward-1, Haldia, had the jurisdiction to complete the assessment. The Tribunal noted that no transfer order under section 127 of the Act was passed to transfer the assessee's file from the Assistant Commissioner of Income-tax, Haldia, to the Income-tax Officer, Ward-1, Haldia. Therefore, the assessment order dated March 20, 2013, passed by the Income-tax Officer, Ward-1, Haldia, was without jurisdiction and thus invalid, bad in law, void ab initio, and liable to be quashed. The Tribunal emphasized that the notice under section 143(2) must be issued by the jurisdictional Income-tax Officer, and in this case, it was not.

3. Confirmation of addition under section 40(a)(ia) of the Income-tax Act, 1961:
The assessee also challenged the confirmation of the addition under section 40(a)(ia) for machine hire charges amounting to Rs. 28,21,615. However, since the Tribunal quashed the assessment order on the grounds of jurisdictional issues and invalid notice, it did not find it necessary to adjudicate this issue separately. The Tribunal concluded that the assessment proceedings under section 143(3) of the Act were invalid, and therefore, the other issues raised by the assessee did not require further adjudication.

Conclusion:
The Tribunal allowed the appeal of the assessee, quashing the assessment framed under section 143(3) of the Act due to the invalid notice issued by the Assistant Commissioner of Income-tax and the lack of jurisdiction of the Income-tax Officer, Ward-1, Haldia. The order was pronounced in the open court on November 18, 2016.

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