Invalid assessment quashed as notice not issued by proper officer, jurisdictional error found.

The assessment in this case was deemed invalid due to the non-issuance of the statutory notice under Section 143(2) by the jurisdictional Assessing Officer. The tribunal found that the officer who issued the notice did not have jurisdiction over the assessee, rendering the assessment void ab initio. As a result, the assessment was quashed, and the appeal of the assessee was allowed. The tribunal did not address the merits of the addition made under Section 68 of the Income Tax Act due to the jurisdictional grounds for quashing the assessment.

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Issues Involved:
1. Validity of the assessment due to non-issuance of notice under Section 143(2) by the jurisdictional Assessing Officer.
2. Merits of the addition made under Section 68 of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Validity of the Assessment Due to Non-Issuance of Notice Under Section 143(2) by the Jurisdictional Assessing Officer:

The primary issue in this case was whether the assessment was valid given that the notice under Section 143(2) was issued by an officer who did not have jurisdiction over the assessee. The assessee argued that the jurisdiction lay with ITO, Ward-8(3), Kolkata, but the notice was issued by ITO, Ward-33(1), Kolkata. This was not contested by the Revenue.

The tribunal examined the jurisdictional provisions under Sections 120 and 124 of the Income Tax Act. It was noted that jurisdiction is conferred by the Central Board of Direct Taxes (CBDT) and that only the officer vested with jurisdiction can issue notices. The tribunal found that the assessee’s address had not changed and that the jurisdiction always lay with ITO, Ward-8(3), Kolkata. The issuance of the notice by ITO, Ward-33(1), Kolkata, was therefore invalid as this officer did not have jurisdiction over the assessee.

The tribunal emphasized that jurisdiction cannot be conferred by default or agreement and that actions by an officer without jurisdiction are void ab initio. Several case laws were cited to support this view, including decisions from the Calcutta High Court and other benches of the ITAT, which consistently held that assessments made without proper jurisdiction are null and void.

The tribunal concluded that the assessment was invalid due to the non-issuance of the statutory notice under Section 143(2) by the jurisdictional officer, ITO, Ward-8(3), Kolkata. Consequently, the assessment was quashed.

2. Merits of the Addition Made Under Section 68 of the Income Tax Act:

Since the tribunal quashed the assessment on jurisdictional grounds, it did not delve into the merits of the addition made under Section 68 of the Income Tax Act, which pertained to the share capital and share premium received by the company. The tribunal deemed it unnecessary to address the merits as it would be an academic exercise given the quashing of the assessment.

Conclusion:

The appeal of the assessee was allowed, and the assessment was quashed due to the non-issuance of the statutory notice under Section 143(2) by the jurisdictional Assessing Officer. The tribunal did not address the merits of the case due to the invalidity of the assessment.

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