Pecuniary jurisdiction in scrutiny notices can invalidate the entire assessment where the foundational notice is issued without authority.

Invalidity of a scrutiny notice issued without pecuniary jurisdiction is presented as rendering the assessment unsustainable, because the returned income fell within the jurisdiction of a higher-ranking Assessing Officer under CBDT instructions. The note states that a notice under section 143(2) issued by an officer lacking the requisite monetary jurisdiction is a foundational defect, and later transfer of records does not cure that defect. It further explains that the bar on jurisdictional objections under section 124(3) does not apply where the dispute concerns pecuniary jurisdiction and the initial notice itself is invalid. On that basis, the assessments are described as void from inception.

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Issues: (i) Whether the scrutiny notice under section 143(2) was invalid for want of pecuniary jurisdiction and whether the assessments framed on that basis could survive.

Analysis: The assessee's returned income placed the case within the jurisdictional limits of the higher-ranking Assessing Officer under CBDT Instruction No. 1/2011. The notice under section 143(2) was issued by an officer who did not have the requisite pecuniary jurisdiction, and the subsequent transfer of records did not cure the initial defect. The bar under section 124(3) was held inapplicable because the controversy was one of pecuniary jurisdiction and the foundational notice itself was not valid. As the scrutiny notice was jurisdictionally infirm, the assessments framed under section 143(3) could not be sustained.

Conclusion: The assessments were quashed as void ab initio and the additional ground was allowed in favour of the assessee.

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