2021 (5) TMI 153 - AT - Income Tax

Appeal allowed due to lack of valid notice under Section 143(2) - Assessment order quashed

The Tribunal allowed the appeal, quashing the assessment order due to lack of a valid notice under Section 143(2) by the jurisdictional Assessing Officer. ... Non-issuance of notice u/s 143(2) by the AO who was having valid jurisdiction - transfer of case to different AO after the question of jurisdiction raised by the assessee - Notice u/s 143(2) was issued for the AO not having jurisdiction - HELD THAT:- As assessment order passed u/ s 143(3) of the Act dated 14.03.2015 by the ITO, Ward-5(3), Kolkata is bad in law when a notice u/s 143(2) of the Act was not issued by the jurisdictional assessing officer.We hold that the notice issued by the ITO, Ward-4(3), Kolkata u/s 143(2) of the Act on 12.08.2013 is without jurisdiction and hence non-est in law. It is abinitio void. The assessment order passed by the AO, ITO, Ward-5(3), Kolkata u/s 143(3) of the Act on 14.03.2015 was without issuance of mandatory notice u/s 143(2) of the Act, by the AO having jurisdiction over the assessee. Thus the assessment order passed u/s 143(3) of the Act, without issuance of valid notice u/s 143(2) of the Act is bad in law as held by the Hon’ble Supreme Court in the case of Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT]. Thus we allow the ground nos. 1-4 in favour of the assessee and quash the assessment order passed u/s 143(3) of the Act - Decided in favour of assessee. Issues Involved:1. Jurisdiction of the Assessing Officer (AO) issuing the notice under Section 143(2) of the Income Tax Act.2. Validity of the assessment order passed without a proper notice under Section 143(2) by the jurisdictional AO.3. Violation of principles of natural justice by the CIT(A).Issue-wise Detailed Analysis:1. Jurisdiction of the Assessing Officer (AO) issuing the notice under Section 143(2) of the Income Tax Act:The assessee argued that the ITO, Ward-4(3), Kolkata, who issued the notice under Section 143(2) on 12.08.2013, did not have jurisdiction over the assessee's case. The assessee had communicated this lack of jurisdiction to the ITO, Ward-4(3), Kolkata, on 04.09.2013, stating that the correct jurisdiction lay with ITO, Ward-5(3), Kolkata. The case was subsequently transferred to ITO, Ward-5(3), Kolkata, but no fresh notice under Section 143(2) was issued by the jurisdictional AO. The Tribunal held that the notice issued by ITO, Ward-4(3), Kolkata, was without jurisdiction and thus non-est in law, making the subsequent assessment order void.2. Validity of the assessment order passed without a proper notice under Section 143(2) by the jurisdictional AO:The Tribunal emphasized that the issuance of a notice under Section 143(2) by the jurisdictional AO is a mandatory requirement. The failure of ITO, Ward-5(3), Kolkata, to issue such a notice rendered the assessment order dated 14.03.2015 invalid. The Tribunal cited several case laws, including the Supreme Court's decision in CIT vs. Laxman Das Khandelwal, which held that non-issuance of a notice under Section 143(2) by the jurisdictional AO is a jurisdictional defect that cannot be cured under Section 292BB of the Act. Consequently, the assessment order was quashed.3. Violation of principles of natural justice by the CIT(A):The assessee contended that the CIT(A) wrongly stated that no one appeared on behalf of the assessee and that no written submissions were filed. The assessee provided evidence that written submissions were indeed filed and the case was heard. The Tribunal noted this procedural lapse and agreed that the CIT(A) did not consider the written submissions and other records. However, since the assessment order was quashed on jurisdictional grounds, the Tribunal did not further adjudicate on this issue.Conclusion:The Tribunal allowed the appeal filed by the assessee, quashing the assessment order passed under Section 143(3) due to the lack of a valid notice under Section 143(2) by the jurisdictional AO. The Tribunal did not address other grounds raised by the assessee as they became academic in light of the jurisdictional defect.