Tribunal quashes notice under section 143(2) and subsequent orders for lack of jurisdiction.

The Tribunal allowed the appeal of the assessee, quashing the notice issued under section 143(2) as null and void. Consequently, all subsequent proceedings, including the assessment order and the order under section 263, were also quashed. The Tribunal emphasized the importance of jurisdictional correctness and upheld the assessee's challenge to the validity of the proceedings initiated by authorities lacking proper jurisdiction.

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Issues Involved:
1. Jurisdiction of the Principal Commissioner of Income Tax (Pr. CIT) over the assessee.
2. Validity of the assessment order dated 25.03.2015 under section 143(3) of the Income Tax Act, 1961.
3. Exercise of revisionary jurisdiction by the Pr. CIT under section 263 of the Income Tax Act, 1961.
4. Adequacy of enquiries made by the Assessing Officer (AO) during the assessment.
5. Validity of notice under section 143(2) of the Income Tax Act.

Detailed Analysis:

1. Jurisdiction of the Principal Commissioner of Income Tax (Pr. CIT) Over the Assessee:
The assessee argued that the territorial jurisdiction over the assessee did not vest in the Pr. CIT and hence the order passed by him was without jurisdiction and should be quashed. The Tribunal noted that the address provided by the assessee was in Maharashtra, whereas the notice under section 143(2) was issued by the Dy. Commissioner of Income Tax, Range-VI, Lucknow. According to Section 124 of the Income Tax Act, the jurisdiction lies with the Income-tax authorities where the business or profession is situated. Since the business of the assessee was in Maharashtra, the notice issued by an officer in Lucknow was held to be null and void. Consequently, the entire proceedings were quashed.

2. Validity of the Assessment Order Dated 25.03.2015 Under Section 143(3):
The Tribunal found that the assessment order dated 25.03.2015 was passed by an officer who did not have jurisdiction over the assessee. The jurisdictional fact was erroneously decided, making the assessment order void. The Tribunal cited several cases, including 'Raza Textiles Ltd. vs. ITO' and 'Indorama Software Solution Ltd. vs. ITO', to support the view that actions taken without proper jurisdiction are illegal.

3. Exercise of Revisionary Jurisdiction by the Pr. CIT Under Section 263:
The Pr. CIT exercised revisionary jurisdiction under section 263, setting aside the assessment order on the grounds that it was erroneous and prejudicial to the interests of the Revenue. However, since the initial assessment order itself was found to be without jurisdiction, the revisionary proceedings under section 263 were also held to be invalid. The Tribunal emphasized that jurisdictional issues can be challenged at any stage, as supported by cases like 'Westlife Development Ltd. vs. Pr. CIT' and 'Hema Knitting Industries vs. ACIT'.

4. Adequacy of Enquiries Made by the Assessing Officer (AO) During the Assessment:
The Pr. CIT contended that the AO did not make adequate enquiries regarding certain cash payments. However, the assessee argued that the AO had made all necessary enquiries and that the distinction between 'lack of enquiry' and 'inadequate enquiry' should be considered. The Tribunal noted that the AO had indeed made enquiries, and thus, the assessment could not be deemed erroneous merely on the basis of the Pr. CIT's opinion.

5. Validity of Notice Under Section 143(2) of the Income Tax Act:
The Tribunal found that the notice under section 143(2) was issued by an officer who did not have jurisdiction over the assessee. This invalidated the notice and all subsequent proceedings, including the assessment order and the order under section 263. The Tribunal cited multiple cases, including 'PCIT vs. Mohd. Rizwan' and 'ITO vs. M/s Arti Securities & Services Ltd.', to support the view that actions taken without proper jurisdiction are illegal.

Conclusion:
The Tribunal allowed the appeal of the assessee, quashing the notice issued under section 143(2) as null and void. Consequently, all subsequent proceedings, including the assessment order and the order under section 263, were also quashed. The Tribunal emphasized the importance of jurisdictional correctness and upheld the assessee's challenge to the validity of the proceedings initiated by authorities lacking proper jurisdiction.

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