2024 (10) TMI 599 - HC - Income Tax

Validity of notice issued u/s 143 (2) by an officer, who is not a 'prescribed income-tax authority - Period of limitation - also contended that even if it is assumed that the authority issuing the notice dated 23.06.2024 is a prescribed income-tax authority, he cannot issue a notice but can merely serve a notice - HELD THAT - A plain reading of Section 143 (2) of the Act clearly indicates that either of the two authorities either the 'Assessing Officer or 'the prescribed income-tax authority can issue a notice u/s 143 (2) - The expression 'as the case may be also indicates the same. In the present case, the CBDT had issued a notification dated 12.05.2022 and 28.05.2022, in exercise of powers under Rule 12E of the Rules, and had authorised the Assistant Commissioner of Income Tax/ Deputy Commissioner of Income Tax (International Taxation), Circle-1(1)(1) Delhi to act as the 'prescribed income-tax authority for the purpose of issuance of notice u/s 143 (2) In the present case, the impugned notice u/s 143 (2) has been issued by the Assistant Commissioner of Income Tax/ Deputy Commissioner of Income Tax (International Taxation), Circle-1(1)(1), Delhi. In view of the above, the contention that the said Income Tax Officer did not have the jurisdiction to issue a notice under Section 143 (2) of the Act, is devoid of any merit. The contention that other than the AO, only the authorised Income Tax Officers of the National Faceless Assessment Centre (NaFAC) can issue a notice u/s 143 (2) of the Act as the same would be in furtherance of automation of such process, is also unmerited. This proposition is not supported by the plain language of Section 143 (2) of the Act or Rule 12E of the Rules. Rule 12E of the Rules does not confine the power of the CBDT to authorise only the Income Tax Officers of the NaFAC as the prescribed authority for the purposes of Section 142 (1) of the Act. The contention that the prescribed income tax authority can only serve a notice u/s 143 (2) of the Act but cannot issue it, is insubstantial. We are unable to accept that the AO did not have the jurisdiction to issue the impugned notices dated 10.07.2024, 06.09.2024, 17.09.2024 u/s 142 (1) of the Act or that the same are beyond the period of limitation. Once it is accepted that the AO has the jurisdiction to issue a notice u/s 143 (2) of the Act which is also the contention of the petitioner in this case the AO cannot be faulted for proceeding to complete the assessment.

Summary

Issues:
1. Jurisdiction of the officer issuing notices under Income Tax Act, 1961.
2. Validity of notices issued under Section 143 (2) and Section 142 (1) of the Act.
3. Interpretation of Section 143 (2) and Rule 12E of the Income-Tax Rules, 1962.
4. Authority of Assessing Officer and prescribed income-tax authority to issue notices.

Analysis:

The petitioner challenged notices issued under Section 143 (2) and Section 142 (1) of the Income Tax Act, 1961, claiming lack of jurisdiction. The petitioner argued that the officer issuing the notice under Section 143 (2) was not a prescribed income-tax authority and exceeded the limitation period. Additionally, the petitioner contended that the Assessing Officer (AO) who issued the notice under Section 142 (1) was also beyond the limitation period due to the invalidity of the Section 143 (2) notice.

The court examined Section 143 (2) of the Act, which allows either the Assessing Officer or the prescribed income-tax authority to issue notices. The petitioner's argument that only the Assessing Officer could issue such notices was rejected. The court highlighted Rule 12E of the Income-Tax Rules, which authorized the CBDT to designate Income-tax Officers as prescribed authorities for Section 143 (2) notices. The court referenced a notification empowering the Assistant Commissioner of Income Tax/ Deputy Commissioner of Income Tax to act as the prescribed authority in this case.

The court dismissed the petitioner's claim that only authorized Income Tax Officers of the National Faceless Assessment Centre could issue Section 143 (2) notices for automation purposes. The contention that prescribed income tax authorities could serve but not issue notices under Section 143 (2) was also rejected as insubstantial. The court found that the AO had jurisdiction to issue the impugned notices under Section 142 (1) and that they were not time-barred.

The court emphasized that once the AO had jurisdiction to issue a notice under Section 143 (2), as contended by the petitioner, the AO was justified in proceeding with the assessment. The petitioner's argument regarding the jurisdiction of the AO under Section 144B was not addressed as it was not raised in the petition. Consequently, the petition was dismissed, and pending applications were disposed of.