Assessment jurisdiction challenges dismissed after participating in proceedings without timely section 124(3)(a) objection following Kalinga Institute precedent

ITAT Kolkata dismissed challenges to assessment jurisdiction, following SC precedent in Kalinga Institute case that assessee cannot question AO's jurisdiction after participating in proceedings without timely objection under section 124(3)(a). Regarding section 43CA valuation disputes, tribunal remanded matters to AO for fresh consideration of DVO reports and proper application of law per Maria Fernandes Cheryl precedent, directing adequate hearing opportunity for assessee. Both appeals allowed for statistical purposes with directions for reassessment.

---

---

Issues involved:
The issues involved in this case are:
1. Validity of notice u/s 143(2) and legality of assessment order without an effective order u/s 127.
2. Applicability of section 43CA of the Income Tax Act, 1961 to the case where the agreement of sale was entered prior to the provision's applicability.

Issue 1: Validity of notice u/s 143(2) and legality of assessment order without an effective order u/s 127:
The appellant challenged the validity of the notice issued u/s 143(2) by the assessing officer and the legality of the assessment order due to the absence of an effective order u/s 127. The appellant argued that the notice was invalid as the assessing officer did not have jurisdiction over the assessee, citing CBDT instructions and a previous tribunal decision. The appellant contended that the assessing officer accepted that jurisdiction lay with a different authority based on pecuniary limits. The Departmental Representative argued that the jurisdiction was with the assessing officer based on PAN jurisdiction and internal procedures for transferring cases. The Tribunal dismissed the appellant's grounds, citing a Supreme Court judgment that precludes the assessee from questioning jurisdiction if they participated without objection.

Issue 2: Applicability of section 43CA to pre-existing sale agreement:
The appellant contested the application of section 43CA to their case, as the sale agreement was entered before the provision's introduction. The appellant argued for a retrospective application based on a clarificatory nature of a subsequent amendment. The appellant requested consideration of cases where the valuation difference is less than 10%. The assessing officer submitted a detailed analysis of the valuation differences. The Tribunal remanded the issue back to the assessing officer to reconsider the valuation report in light of relevant case law and submissions by the appellant, providing an opportunity for the appellant to be heard.

Separate Judgment:
In a similar case (ITA No. 691/Kol/2023), the Tribunal directed the assessing officer to decide the issue afresh as the valuation report by the Departmental Valuation Officer was furnished beyond the limitation period. The Tribunal found the issue to be similar to another case and set it aside for fresh consideration.

Conclusion:
Both appeals of the assessee were allowed for statistical purposes, with one issue remanded back to the assessing officer for reconsideration and the other issue allowed for statistical purposes.

---