2023 (6) TMI 1341 - AT - Income Tax

Validity of scrutiny assessment - Jurisdiction of authority who issued notice - whether there is valid notice issued u/s 143(2) for commencing the scrutiny assessment? - HELD THAT - ITO Ward-49(1) Kolkata had no valid jurisdiction over the assessee on the date of issuing notice u/s. 143(2) of the Act. Revenue has not controverted this fact by placing any other contrary material on record to indicate otherwise. Since a valid notice u/s. 143(2) has not been issued the assessment proceedings carried thereafter deserves to be quashed. We therefore respectfully following the ratio laid down by Hon ble jurisdictional High Court in the case of PCIT Vs. Shree Shoppers Ltd. 2023 (3) TMI 1432 - CALCUTTA HIGH COURT allow ground raised by the assessee and quash the assessment proceedings completed u/s. 143(3).

Summary

Issues Involved:
The issues involved in the judgment are the validity of notice u/s. 143(2) issued by the Income Tax Officer, jurisdictional aspect of the notice, addition made by the Assessing Officer u/s. 69A, and the charging of tax u/s. 115BBE.

Validity of Notice u/s. 143(2):
The appeal was filed against the order of the Ld. CIT(A) for passing an ex-parte order without giving the appellant a proper opportunity to be heard. The appellant challenged the validity of the notice u/s. 143(2) issued by the Income Tax Officer, Ward-49(1), Kolkata, stating that it was without jurisdiction and invalid. The Tribunal referred to a recent judgment by the jurisdictional High Court of Calcutta in a similar case, where it was held that the absence of a valid notice u/s. 143(2) renders subsequent proceedings invalid. The Tribunal concluded that the Income Tax Officer did not have valid jurisdiction over the assessee at the time of issuing the notice u/s. 143(2), leading to the quashing of the assessment proceedings under section 143(3) of the Income-tax Act, 1961.

Addition u/s. 69A:
During the assessment, the Assessing Officer made an addition of Rs. 6.20 lakhs u/s. 69A, considering it as unexplained money deposited during the demonetization period. The appellant contested this addition before the Ld. CIT(A), which was dismissed due to non-appearance. The Tribunal, after quashing the assessment proceedings based on the jurisdictional issue, did not adjudicate on the merits of the addition made u/s. 69A, deeming it academic in nature.

Charging of Tax u/s. 115BBE:
The appellant also contested the charging of tax u/s. 115BBE, arguing that it was unjustified and not in accordance with the law. The Tribunal, after quashing the assessment proceedings, did not delve into the grounds related to the charging of tax u/s. 115BBE, as they were considered academic in light of the jurisdictional issue. The appeal of the assessee was allowed based on the jurisdictional aspect, and the other grounds were not adjudicated upon.