Tribunal quashes assessment order due to time-barred notice

The Tribunal allowed the appeal by the assessee, quashing the assessment order under section 143(3) due to the jurisdictional issue arising from the time-barred notice issued under section 143(2) of the Income Tax Act, 1961. The Tribunal held that the issuance of a fresh notice under section 142(1) after processing a valid return was invalid, rendering subsequent proceedings void ab initio. The decision was based on the limitation period for issuing the notice under section 143(2) and not on the merits of the case.

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Issues:
Jurisdiction of Assessing Officer under section 143(2) of the Income Tax Act, 1961 - Validity of notice issued u/s 143(2) - Barred by limitation.

Analysis:

1. The appeal challenged the correctness of the order of the Commissioner of Income Tax [Appeals]-29, New Delhi dated 10.09.2018 for Assessment Year 2016-17. The assessee raised an additional ground challenging the jurisdiction of the Assessing Officer under section 143(2) of the Act, citing that the notice issued was time-barred.

2. The issue of jurisdiction was not raised before lower authorities. However, the Tribunal admitted the plea as it goes to the root of the matter, following the Supreme Court's decision in the case of NTPC 229 ITR 383. The additional plea required no verification of facts as they were evident in the assessment order.

3. The challenge pertained to the validity of the notice issued under section 143(2) of the Act, contended by the assessee to be beyond the limitation period.

4. The original return of income was filed on 20.03.2017, processed under section 143(1) on 20.05.2017. Subsequently, a notice under section 142(1) was issued on 22.09.2017, centralizing the case from Faridabad to New Delhi post a search and seizure operation.

5. Despite the existing processed return, a fresh notice under section 142(1) was issued, followed by a notice under section 143(2) on 16.10.2017. The Tribunal noted that the notice under section 143(2) should have been issued within six months from the end of the financial year in which the return was filed, rendering the notice time-barred.

6. The Tribunal held that since a valid return was already on record and processed, the issuance of a fresh notice under section 142(1) was invalid, making subsequent proceedings void ab initio.

7. Considering the facts and provisions of the Act, the Tribunal quashed the assessment order under section 143(3) for want of jurisdiction due to the time-barred notice under section 143(2), without delving into the case's merits.

8. Consequently, the appeal by the assessee was allowed, and the assessment order dated 29.12.2017 under section 143(3) was quashed due to the jurisdictional issue.

This detailed analysis covers the jurisdictional challenge regarding the notice issued under section 143(2) of the Income Tax Act, 1961, and the subsequent decision by the Appellate Tribunal ITAT Delhi.

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