Pecuniary Jurisdiction: notices issued by non jurisdictional officers are void and resulting assessments may be quashed.

Notice under Section 143(2) issued by an officer lacking pecuniary jurisdiction is void and any consequent assessment under Section 143(3) is invalid where the jurisdictional Assessing Officer did not serve the statutory notice within the statutory period. Instruction No. 1/2011 allocating cases by pecuniary limits governs which Assessing Officer may issue scrutiny notices; transfers under the competent transfer provision must be recorded and authorised. Section 292BB may cure defects in service where a departmental notice exists but does not validate a complete absence of a statutory notice or a notice issued by an officer without jurisdiction. Result: appeal allowed for the assessee.

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Issues: Whether the notice issued under Section 143(2) of the Income-tax Act, 1961 by a non-jurisdictional Assessing Officer and the consequential assessment under Section 143(3) of the Income-tax Act, 1961 are void for want of pecuniary jurisdiction and failure of the jurisdictional Assessing Officer to issue the statutory notice.

Analysis: The tribunal applied Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)] dated 31.01.2011, and provisions of the Income-tax Act, 1961 including Sections 119, 127, 143(2), 143(3), 147, 148 and 292BB. The instruction fixes pecuniary limits for allocation of cases between ITOs and ACs/DCs, thereby determining which Assessing Officer has jurisdiction for scrutiny where returned income falls within specified monetary limits. Prior decisions of co ordinate benches were followed holding that service of notice under Section 143(2) by the officer having jurisdiction is a prerequisite to a valid assessment under Section 143(3), and that a notice issued by an officer without pecuniary jurisdiction is null. Section 292BB was examined and construed as curing infirmities in service where a notice has emanated from the department; it does not validate complete absence of a statutory notice or a notice issued by an officer who had no jurisdiction to issue it. Reliance was placed on precedent establishing that transfer of cases under Section 127 must be by competent authority and supported by records; absent such valid transfer, actions by the non jurisdictional officer are void. The facts showed issuance of the statutory notice by an officer who lacked pecuniary jurisdiction and no valid notice by the jurisdictional Assessing Officer was on record within the statutory period.

Conclusion: The notice issued under Section 143(2) of the Income-tax Act, 1961 by a non jurisdictional Assessing Officer and the consequential assessment under Section 143(3) of the Income-tax Act, 1961 are void for want of pecuniary jurisdiction and for failure of the jurisdictional Assessing Officer to issue the statutory notice; the appeal is allowed in favour of the assessee.

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