Pecuniary jurisdiction under Instruction No.1/2011 limits AO power; notices issued beyond it invalidate ensuing assessments.

The note addresses limits on issuing notices under Section 143(2) where CBDT Instruction No.1/2011 allocates cases by pecuniary thresholds; it states that a notice issued by an assessing officer outside the monetary jurisdiction prescribed by that instruction is invalid and any consequential assessment under Section 143(3) is vitiated. The key legal point is that allocation of cases by monetary limits determines competence to issue statutory notices, and actions taken by a non jurisdictional AO pursuant to those limits render resulting assessments liable to be quashed.

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Issues: Whether notice under Section 143(2) of the Income-tax Act, 1961 issued by ITO, Ward 7(1), Kolkata in the present case was beyond the pecuniary jurisdiction prescribed by Instruction No.1/2011, and whether the consequent assessment framed under Section 143(3) is invalid.

Analysis: The Tribunal examined the filing details showing the return of income for AY 2015-16 declared at Rs. 49,24,210 and considered the CBDT Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)], dated 31-01-2011 issued under Section 119 of the Income-tax Act, 1961 which prescribes monetary limits for allocation of cases between ITOs and DCs/ACs for metro and mofussil areas. The Tribunal noted that under the instruction the pecuniary jurisdictional thresholds determine which authority may issue notices under Section 143(2). The notice dated 11-04-2016 was found to have been issued by ITO, Ward 7(1), Kolkata despite the return amount falling within the threshold assigned to DC/AC under the Instruction. The Tribunal considered and followed relevant decisions of the Calcutta High Court and coordinate benches which held that issuance of notice by a non-jurisdictional AO pursuant to the Instruction renders the notice and consequent assessment invalid.

Conclusion: The notice under Section 143(2) issued by ITO, Ward 7(1), Kolkata was beyond the pecuniary jurisdiction prescribed by Instruction No.1/2011 and therefore the assessment framed under Section 143(3) is invalid and is quashed; decision in favour of the assessee.

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