ACIT/DCIT authorized to issue Section 143(2) notices under Income Tax Act per CBDT notifications

The Delhi HC upheld the jurisdiction of ACIT/DCIT (International Taxation) to issue notices under Section 143(2) of the Income Tax Act. The court ruled that either the AO or prescribed income-tax authority can issue such notices, as expressly provided in the statute. CBDT notifications dated 12.05.2022 and 28.05.2022 had authorized the ACIT/DCIT under Rule 12E to act as prescribed authority. The court rejected contentions that only NaFAC officers could issue notices or that prescribed authorities could only serve but not issue notices, finding these arguments unsupported by statutory language.

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Issues:
Jurisdiction of the officer issuing notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961.

Analysis:
The petitioner challenged the notices dated 23.06.2024, 10.07.2024, and 06.09.2024 issued under Sections 143(2) and 142(1) of the Income Tax Act, claiming they were issued without jurisdiction. The petitioner contended that the officer issuing the notice under Section 143(2) was not a prescribed income-tax authority and lacked the jurisdiction to issue the notice. Additionally, the petitioner argued that the notice under Section 142(1) was beyond the period of limitation as it was based on the invalid notice under Section 143(2) issued by an officer without jurisdiction.

The High Court analyzed the provisions of Section 143(2) of the Act, which allows either the Assessing Officer or the prescribed income-tax authority to issue a notice. The court rejected the petitioner's argument that only the Assessing Officer could issue the notice in cases where jurisdiction vested with them, clarifying that the prescribed income-tax authority could also issue such notices. The court referred to Rule 12E of the Income-Tax Rules, which authorizes the Central Board of Direct Taxes to designate Income-tax Officers as prescribed authorities under Section 143(2).

In this case, the CBDT had authorized the Assistant Commissioner of Income Tax/ Deputy Commissioner of Income Tax (International Taxation) to act as the prescribed income-tax authority for issuing notices under Section 143(2). The court concluded that the Income Tax Officer who issued the impugned notice had the necessary jurisdiction based on the CBDT's authorization. The court dismissed the petitioner's contention that only authorized Income Tax Officers of the National Faceless Assessment Centre could issue such notices, emphasizing that Rule 12E did not restrict the CBDT's power to designate only NaFAC officers as prescribed authorities.

The court also rejected the argument that the prescribed income tax authority could only serve but not issue a notice under Section 143(2), deeming it insubstantial. Ultimately, the court held that the Assessing Officer had the jurisdiction to issue the impugned notices under Section 142(1) and that they were not beyond the period of limitation. The court dismissed the petition, stating that once it was established that the Assessing Officer had jurisdiction to issue the notice under Section 143(2), they were not at fault for proceeding with the assessment. The court declined to address the issue of jurisdiction under Section 144B raised by the petitioner as it was not part of the petition's grounds.

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