Mandatory scrutiny notice under section 143(2) must be issued by the competent AO after transfer, or assessment fails.

A scrutiny assessment under section 143(3) was held unsustainable where the case had been transferred to the jurisdictional AO but no fresh notice under section 143(2) was issued by that officer. The mandatory notice under section 143(2) is a condition precedent to valid assumption and exercise of jurisdiction in scrutiny proceedings, and participation by the assessee does not cure the foundational defect. On that basis, the assessment was treated as invalid and bad in law, and was quashed.

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Issues: Whether the assessment framed under section 143(3) of the Income-tax Act, 1961 was valid when the jurisdictional Assessing Officer, after transfer of the case, did not issue a fresh notice under section 143(2) of the Income-tax Act, 1961.

Analysis: The assessment records had been transferred to the Assessing Officer having jurisdiction, but no fresh notice under section 143(2) was issued by that officer before completion of the scrutiny assessment. The requirement of notice under section 143(2) is mandatory and is a condition precedent for valid assumption and exercise of jurisdiction in scrutiny proceedings. The cited jurisdictional and Supreme Court authorities were applied to hold that participation in the proceedings did not cure the foundational defect, and the absence of a valid notice by the competent Assessing Officer rendered the assessment unsustainable in law.

Conclusion: The assessment was invalid and bad in law; it was quashed, and the assessee succeeded on the legal issue.

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