Assessee barred under section 124(3)(a) from later contesting AO jurisdiction after participating post notice under section 142(1)

SC held that the assessee, having participated after a notice under section 142(1) and not objecting within 30 days, was precluded by section 124(3)(a) from later challenging the assessing officer's jurisdiction. The HC erred in quashing the notice without grounds but had granted the department liberty to proceed afresh. The SC permitted the AO to complete the assessment (if not already done) within 60 days and directed that, if such assessment is completed within that period, the assessee may not raise limitation as a defence.

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Issues involved: Jurisdiction of assessing officer, Assessment Year 2014-2015

The Supreme Court set aside the assessment for Assessment Year (AY) 2014-2015 due to a change in jurisdictional officer after the returns were filed. However, the assessee participated in the assessment process without questioning the jurisdiction of the assessing officer within the stipulated time frame as per Section 124(3)(a) of the Income Tax Act. The High Court's order was deemed unwarranted as the facts did not support it. The High Court granted the authority the liberty to issue appropriate notice, allowing the assessing officer to complete the assessment within the next 60 days without raising any limitation issues from the assessee's side.

Jurisdictional Challenge and Assessment Process

The impugned order in this case pertained to the assessment for AY 2014-2015, which was set aside due to a change in the jurisdictional officer post the filing of returns. Despite participating in the assessment process following a notice under Section 142(1), the assessee did not contest the jurisdiction of the assessing officer within the specified 30-day period as mandated by Section 124(3)(a) of the Income Tax Act. The High Court's decision was found to be unfounded based on the facts of the case, leading to the Supreme Court's intervention.

Court's Clarification and Directions

The Supreme Court clarified that the assessing officer is now at liberty to finalize the assessment within the next 60 days, provided that the assessment order has not been issued yet. In such a scenario, the assessee is barred from raising any limitation concerns. The special leave petition was allowed by the Supreme Court, and any pending applications were disposed of accordingly.

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