Jurisdictional defect in assessee status change invalidates assessment where proceedings began in one recognised legal status.

Scrutiny proceedings initiated against an assessee in the status of a local authority cannot validly be completed in the status of an artificial juridical person without jurisdictional foundation. The Tribunal treated the change of status between the section 143(2) notice and the assessment order as a fatal jurisdictional defect, following binding precedent. On that basis, the assessment was held bad in law and annulled.

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Issues: Whether the assessment was liable to be annulled because the notice under section 143(2) and the assessment order were issued in the status of a local authority, but the assessment was ultimately framed in the status of an artificial juridical person.

Analysis: The return had been filed in the status of a local authority and the scrutiny notice was also addressed to the assessee in that status. The assessment order, however, was framed in the status of an artificial juridical person. The Tribunal treated this change of status as a jurisdictional infirmity and followed the binding precedent relied upon by the assessee to hold that the Assessing Officer could not validly alter the status in which the proceedings had been initiated.

Conclusion: The assessment was bad in law and was annulled.

Final Conclusion: The appeal succeeded and the impugned assessment could not be sustained on account of the jurisdictional defect arising from the change in assessee status.

Ratio Decidendi: Where scrutiny proceedings are initiated in one legally recognised status, the assessment cannot validly be completed in a different status without jurisdictional foundation; such a defect vitiates the assessment.

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