Valid 143(2) notice survives transfer of jurisdiction; sales-reversal claim under project accounting needs verification.

A scrutiny assessment remained valid where notice under section 143(2) was issued within limitation by the Assessing Officer having jurisdiction at that time; a later transfer of jurisdiction on administrative restructuring did not require a fresh notice, and the successor officer could continue the proceedings. The objection to jurisdiction therefore failed. By contrast, a claim based on reversal of sales under the project accounting method, arising from cancellation of bookings, required factual verification to determine whether the amount had already been reduced from sales and whether allowance would result in a double deduction. That issue was restored for fresh examination, with relief contingent on verification.

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Issues: (i) Whether a scrutiny assessment was invalid for want of a fresh notice under section 143(2) after transfer of jurisdiction to another Assessing Officer. (ii) Whether the claim arising from reversal of sales under the project accounting method was allowable without further verification.

Issue (i): Whether a scrutiny assessment was invalid for want of a fresh notice under section 143(2) after transfer of jurisdiction to another Assessing Officer.

Analysis: A notice under section 143(2) was issued within limitation by an Assessing Officer who had jurisdiction on the date of issue. The later transfer of the case on account of administrative cadre restructuring did not nullify the earlier valid notice. Once scrutiny jurisdiction had been validly assumed, the transferee Assessing Officer could continue the proceedings without issuing a second notice under section 143(2). The relied-upon precedent was distinguished on facts because there the original notice itself had been issued by an lacking jurisdiction.

Conclusion: The assessment was not invalid, and the objection to jurisdiction failed.

Issue (ii): Whether the claim arising from reversal of sales under the project accounting method was allowable without further verification.

Analysis: The claim arose from cancellation of bookings and reversal of revenue already recognised in an earlier year under the percentage completion method. Such reversal can affect taxable income in the year of cancellation, but the allowability depends on the accounting treatment and on whether the same amount had already been reduced from sales in the profit and loss account. Factual verification was therefore necessary to determine whether the claim represented a genuine current-year reversal or a double deduction.

Conclusion: The matter required verification and was restored for fresh examination, with relief to be granted only if no double deduction resulted.

Final Conclusion: The jurisdictional challenge was rejected, while the sales-reversal claim was sent back for verification, leaving the appeal only partly successful.

Ratio Decidendi: A notice under section 143(2) issued by the jurisdictional Assessing Officer within limitation remains valid despite a subsequent transfer of jurisdiction, and no fresh notice is required merely because another Assessing Officer completes the assessment thereafter.

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