Assessment Proceedings and Validity of Section 143(2) Notices: Jurisdictional Clarity and Monetary Limit

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..... ional Calcutta High Court in the case of PCIT vs. Shree Shoppers Ltd. and the decision of ITAT in the case of Shivam Finance vs. ACIT We will provide a detailed analysis of the case, covering key issues, discussions, findings, and their implications. Background: The case involves a dispute regarding the jurisdiction assumed by the Income Tax Officer (ITO), Ward-49(1), Kolkata, for issuing a notice under Section 143(2). The crux of the matter revolves around the validity of this notice and its impact on the subsequent assessment proceedings. Key Issues Involved: * Validity of Notice under Section 143(2): The primary issue in this case is whether the notice issued under Section 143(2) by the ITO, Ward-49(1), Kolkata, was valid. The not .....

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..... sessing Officer does not negate the requirement for a valid notice at the initiation of scrutiny. One crucial aspect highlighted in the judgment was the jurisdiction of the Assessing Officer based on the returned income of the assessee. The instruction from the Central Board of Direct Taxes (CBDT) specified that in case of metro cities, for corporate assesses declaring income above a certain threshold, the jurisdiction would lie with the DCs/ACs. In this case, the returned income exceeded the specified limit, and therefore, the jurisdictional Assessing Officer should have been the DCs/ACs. However, the notice under Section 143(2) was issued by the ITO, Ward-49(1), Kolkata, who did not have the jurisdiction. Despite the subsequent assessme .....

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..... lidity of notices, jurisdictional issues, and monetary limits. Conclusion: This case serves as a reminder of the critical role that valid notices play in taxation matters. It reaffirms the principle that the non-issuance of a valid notice under Section 143(2) can be fatal to assessment proceedings. Taxpayers should be vigilant about the jurisdictional aspects of their cases, including adherence to monetary limits, and tax authorities must adhere to the statutory requirements to avoid challenges and adverse judgments. This judgment has far-reaching implications, ensuring that the integrity of the assessment process remains intact within the boundaries of the law. Full Text: 2023 (9) TMI 1409 - ITAT KOLKATA
TMI Short Notes , Experts c .....

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