Territorial jurisdiction defect invalidates reassessment notice and consequential assessment where notice was issued by a non-jurisdictional officer.

A reassessment notice issued under section 148 by an officer lacking territorial jurisdiction was held invalid, and the defect could not be cured by a later assessment order under section 143(3) read with section 147. The assessee's jurisdiction lay with the Income-tax Officer, Ward-1(1), Raipur under the applicable section 120 notification, but the notice was issued by the Income-tax Officer, Ward-1(3), Raipur, who was not the jurisdictional officer at the relevant time. Section 124(3) was found inapplicable because the initial notice itself was not issued by an officer vested with jurisdiction. The reassessment notice and the consequential assessment were quashed.

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Issues: Whether the assessment framed under section 143(3) read with section 147 of the Income-tax Act, 1961 was valid when the notice under section 148 was issued by an officer who did not have jurisdiction over the assessee's case.

Analysis: The territorial jurisdiction over the assessee had vested in the Income-tax Officer, Ward-1(1), Raipur under the relevant jurisdictional notification issued under section 120 of the Income-tax Act, 1961. The notice under section 148, however, was issued by the Income-tax Officer, Ward-1(3), Raipur, who was found to be a non-jurisdictional officer at the relevant time. A notice issued by an authority lacking inherent jurisdiction cannot sustain a reassessment proceeding, and the defect is not cured by the subsequent framing of assessment by the officer having jurisdiction. The objection under section 124(3) was held inapplicable because the initial notice was not issued by an Assessing Officer vested with jurisdiction in the first place.

Conclusion: The reassessment notice and the consequential assessment were invalid, and the assessment was quashed in favour of the assessee.

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