Jurisdictional objection under section 143(2) barred by section 124(3); unexplained money addition upheld on cash book evidence.

A jurisdictional objection to a notice under section 143(2) was held barred because it was not raised within the time prescribed by section 124(3) and was first pressed only before the Tribunal after completion of assessment. On the merits, the addition for unexplained money was upheld because the cash book did not show any entry after 07.03.2019, while the cash was found on 14.03.2019, and there were no intervening entries evidencing availability of cash or business withdrawal. The assessment was sustained in full.

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Issues: (i) Whether the notice issued under section 143(2) of the Income-tax Act, 1961 was invalid for want of jurisdiction and whether that objection could be raised for the first time before the Tribunal; (ii) Whether the addition of Rs. 5,65,000 as unexplained money was justified on the facts.

Issue (i): Whether the notice issued under section 143(2) of the Income-tax Act, 1961 was invalid for want of jurisdiction and whether that objection could be raised for the first time before the Tribunal?

Analysis: The assessee challenged the notice on the footing that the original Assessing Officer had already proposed transfer of jurisdiction and later the case was transferred under section 127. The Tribunal noted that section 124(3) bars a jurisdictional challenge if it is not raised within the statutory time limit or before completion of assessment, whichever is earlier. The objection was raised only by way of additional ground before the Tribunal, after completion of assessment.

Conclusion: The jurisdictional challenge to the notice under section 143(2) was rejected and the objection was held to be barred by section 124(3).

Issue (ii): Whether the addition of Rs. 5,65,000 as unexplained money was justified on the facts?

Analysis: The assessee relied on the cash book and the statement recorded at the time of interception. The Tribunal found that the last cash book entry was dated 07.03.2019, whereas the cash was seized on 14.03.2019, and there were no intervening entries showing availability of cash on the date of seizure or withdrawal for business purposes. On that basis, the books did not establish satisfactory explanation for the cash found in possession of the assessee.

Conclusion: The addition of Rs. 5,65,000 was upheld.

Final Conclusion: The assessee failed on both the jurisdictional and merits grounds, and the assessment was sustained in full.

Ratio Decidendi: A jurisdictional objection to a notice under section 143(2) must be raised within the time prescribed by section 124(3), and where the assessee fails to do so, the objection cannot be entertained at the appellate stage.

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