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2023 (6) TMI 1389 - AT - Income TaxValidity of assessment proceedings completed u/s. 143(3) r.w.s 147 by non- jurisdictional ACIT - validity of the notice issued u/s 143(2) by ACIT, Circle-33, Kolkata - HELD THAT - ACIT, Circle-31, 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 in the case of PCIT Vs. Shree Shoppers Ltd. 2023 (3) TMI 1432 - CALCUTTA HIGH COURT allow the additional grounds raised by the assessee and quash the assessment proceedings completed u/s. 143(3) r.w.s 147 of the Act. Decided in favour of assessee.
Issues Involved:
The issues involved in this case are jurisdictional challenges regarding the assessment proceedings conducted u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961, specifically related to the validity of the notice issued u/s 143(2) and the jurisdiction of the Assistant Commissioner of Income Tax (ACIT) over the assessee. Grounds Raised by the Assessee: The assessee raised multiple grounds challenging the assessment order. These include contentions related to lack of jurisdiction by the Ld. Commissioner of Income Tax (Appeals), failure to apply mind in reopening the case u/s 147, mechanical approval u/s 151, ignorance of transaction nature by the Ld. Assessing Officer, pre-conceived notion by the Ld. AO, and erroneous additions made u/s 68 and 69 of the Act. Additional Grounds Taken by the Assessee: The assessee further challenged the jurisdiction of the ACIT based on the total income being below 20 Lakhs, as per CBDT Instruction No. 1/11, dated 31.1.2011. The notice issued u/s 143(2) by ACIT, Circle 31, Kolkata was deemed illegal and bad-in-law due to lack of jurisdiction, as it should have been issued by the jurisdictional Income Tax Officer. Assessment and Decision: The Tribunal found that the ACIT, Circle-31, Kolkata lacked valid jurisdiction over the assessee when issuing the notice u/s 143(2) of the Act, as the returned income was below the prescribed threshold of 20 Lakhs. Citing a similar judgment by the Hon'ble jurisdictional High Court, the Tribunal quashed the assessment proceedings, as the absence of a valid notice u/s 143(2) rendered the subsequent proceedings invalid. The additional grounds raised by the assessee were allowed, leading to the quashing of the assessment proceedings u/s 143(3) r.w.s 147 of the Act. Consequently, the appeal of the assessee was allowed, and the merits of the case were not adjudicated upon. Conclusion: The Tribunal upheld the jurisdictional challenge raised by the assessee, leading to the quashing of the assessment proceedings due to the invalid notice issued u/s 143(2). The decision was based on the lack of valid jurisdiction of the ACIT over the assessee, as the returned income was below the prescribed threshold. As a result, the appeal of the assessee was allowed, and the assessment proceedings were deemed void-ab-initio. This summary provides a detailed overview of the legal judgment, focusing on the jurisdictional challenges and the subsequent decision by the Tribunal.
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