ASHIKA STOCK BROKING LIMITED,KOLKATA vs. DCIT, CC-2(1), KOLKATA, KOLKATA

The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-20, Kolkata, dated 12.05.2022 passed under section 250 of the Income Tax Act, 1961 for A.Y. 2014-15.

First of all, we would like to decide the legal issue raised by the assessee in ground no. 2 which is extracted below: “2. For that the statutory Notice u/s 143(2) of the Income Tax Act, 1961 was issued by an Assessing Officer who did not have jurisdiction over the case of the Appellant, hence, the notice is bad in law and the Assessment Order passed on the basis of a defective Statutory Notice is also bad in law and should be quashed.”

Brief facts of the case are that the assessee filed the return on 19.11.2014 declaring total income of Rs. 32,94,950/-. The case of the assessee was selected for scrutiny under CASS and notice u/s 143(2) & 142(1) of the Act were duly issued and served upon the assessee. However, the notice u/s 143(2) of the Act was issued by ITO, Ward-12(3), Kolkata, No. WBG-W-112(3) on 31.08.2015 whereas the assessment was framed by ACIT, Central Circle-2(1), Kolkata. The assessee challenged the issuance of notice u/s 143(2) of the Act dated 31.05.2015 on the ground that the said notice was not issued by the jurisdictional Assessing Officer. Ld. A/R submitted that in terms of CBDT Circular No. 1/2011 [F.No. 187/12/2010-IT(A-1)] the monetary limit has been provided for issuance of notice u/s 143(2) of the Act. The said circular provides that in case of corporate assessee in metro cities where the income exceeds Rs. 30 lakhs, the notice has to be issued by DCs/ACs and in case of income up to 30 lakhs by the ITO whereas in the present case, the notice has been issued by the ITO, Ward-12(3), Kolkata which is invalid and consequently the assessment framed is also invalid and may be quashed as the same has been framed in violation of the CBDT Circular as referred to above.

Ld. A/R in support of this argument relied upon various decisions including the judgment of Hon'ble Jurisdictional High Court in the case of PCIT vs Shree Shoppers in ITAT/39/2023 in IA No. GA/1/2023 wherein the issue has been decided in favour of the assessee. Ld. A/R also pointed out that the Coordinate Bench of Kolkata in the case of Shivam Finance vs. ACIT in order dated 21.06.2023 for AY 2017-18 followed the said order of the Hon'ble High Court and thus decided in favour of the assessee. Ld. A/R submitted that the appeal of the assessee may kindly be allowed by quashing the assessment framed as being without jurisdiction.

On the other hand, ld. D/R relied on the orders of the authorities below.

We have heard the rival contentions and perused the material available on record and find that the issue raised by the Ld. Counsel on the jurisdictional aspect in respect of notice issued u/s. 143(2) of the Act by the ITO, Ward-12(3), Kolkata whereas the assessment was framed by ACIT, Central Circle-2(1), Kolkata. It is a settled position of law that for carrying out an assessment proceedings u/s. 143(3) of the Act, statutory requirement of serving a valid notice u/s. 143(2) of the Act is a must and in absence of which the subsequent proceedings become invalid. In the present case before us, it is a fact that assessee has reported total income of Rs.32,94,950/- which exceeds the threshold prescribed in the CBDT Instruction no. 1/2011 read with revised monetary limit for issuing notices by ITO/DCs/ACs. Through this instruction, it stated that in case of metro cities, in case of