What did the Tribunal hold?

The Tribunal held that the assessment order was invalid because the notice under Section 143(2) was issued by a non-jurisdictional officer, violating CBDT instructions. Consequently, the assessment proceedings were quashed.

The assessee filed a return of income declaring 'nil' income. The case was selected for scrutiny, and an assessment order was passed by the AO making additions. The CIT(A) upheld the AO's order.

What were the issues?

Whether an assessment framed without a valid notice under Section 143(2) issued by a jurisdictional officer is invalid. Whether the AO had the proper jurisdiction to issue the notice based on CBDT instructions.

Haran Chandra Cold Storage P… vs A.C.I.T., Circle - 23(1), Hooghly | s.143(2), 143(3) | ITAT Kolkata 2026

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

For Appellant: Shri Somnath Ghosh, AR

For Respondent: Shri Ambrish Mishra, DR

Hearing: 20.08.2026Pronounced: 16.09.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 28.10.2025 for the AY 2017-18.

The assessee has challenged the order of ld. CIT(A) upholding the assessment order which is passed by the AO(ACIT) in violation of C.B.D.T. Instruction F.No.1/2011 {F.No.187/12

ITA No. 3236/KOL/2025 Haran Chandra Cold Storage P. Ltd.; A.Y. 17-18 /2010-IT(A-I)} dated 31.01.2011 or Dehors any valid notice u/s 143(2) of the Act.

The facts in brief are that the assessee filed the return of income for the impugned assessment year on 29.10.2017, declaring total income of ₹nil. The case of the assessee was selected for scrutiny through Computer Assisted Scrutiny Selection (CASS). Accordingly, notice u/s 143(2) & 142(1) of the Act along with questionnaire were issued, calling for various documents, details and evidences. In response, assessee filed various details and evidences. Finally, the ld. AO after taking into consideration the evidences framed the assessment u/s 143(3) of the Act dated 31.12.2019, by making additions thereby assessing the total income at ₹1,23,49,899/-

The ld. CIT (A) in the appellate proceedings confirmed the action of the AO and dismissed the appeal of the assessee.

After hearing the rival contentions and perusing the materials available on record, we find that the case of the assessee was selected under scrutiny and undisputedly, notice u/s 143(2) of the Act was issued by ITO Ward 24(1), a copy of which is available at page no.94 of the Paper Book of the assessee, whereas the assessment was framed by the ACIT Circle 23(1), Kolkata, without following the CBDT instruction No.1/2011 (F. No. 187/12/2010-IT(A-1), Dated 31.01.2011. Therefore, we find merit in the contention of the ld. Counsel for the assessee that the assessment framed without issuing notice u/s 143(2)

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ITA No. 3236/KOL/2025 Haran Chandra Cold Storage P. Ltd.; A.Y. 17-18 of the Act is invalid and nullity as the notice was issued by the ITO Ward 24(1) Kolkata on 24.09.2018. According to the said instruction, the ITO has pecuniary jurisdiction where the income is upto 20 lacs in the Metro Cities and 15 lacs in Mofussil areas whereas the DC/AC have jurisdiction above 20 lacs in Metro cities and above 15 lacs in the Mofussil areas. The said instructions reads as under:-:-

In the present case, the assessee filed the return of income 29.10.2017, declaring total income as Nil. We note that assessment was framed by ACIT Circle 23(1), Kolkata which is in violation of the CBDT Instruction No.1/2011 (F. No. 187/12/2010-IT(A-1), Dated 31.01.2011. Therefore, the said assessment has been issued by non-jurisdictional AO which is invalid and cannot be sustained. The case of the assessee find support from the decision of the Hon'ble Calcutta High Court in the case of PCIT vs. M/s Shree Shoppers Ltd. in ITAT 39/2023, IA No. GA/1/2023, dated 15.03.2023, wherein the Hon'ble Court has decided the issue in favour of the assessee

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ITA No. 3236/KOL/2025 Haran Chandra Cold Storage P. Ltd.; A.Y. 17-18 by upholding the order of the Tribunal. The Tribunal in ITA No. 865/KOL/2018 for A.Y. 2012-13 in case of M/s Shree Shoppers Ltd. Vs. DCIT has held that notice issued by ITO, Ward 39(4), Kolkata, u/s 143(2) of the Act was without valid jurisdiction and therefore the consequent assessment framed by the DCIT, circle 9(2), Kolkata is invalid. The Hon'ble Tribunal followed the decision of jurisdictional High Court in case of PCIT vs. Nopany& Sons (2022) 136 taxmann.com 414 (Cal), while passing the order. The Hon'ble court vide order dated 15.03.2023, has held as under:-

“We have heard Ms. Smita Das De, learned standing counsel for the appellant/revenue. Though the respondent has been served and affidavit of service filed, none appears for the respondent. The short issue which falls for consideration in the instant case is whether there is valid notice issued under Section 143 (2) of the Act for commencing the scrutiny assessment. The Tribunal has noted the facts and rendered a finding that on the date when the case was selected for scrutiny, the authority who issued the notice namely, the Income Tax Officer, Ward No.9(4), Kolkata did not have jurisdiction and the jurisdiction. was with the Deputy Commissioner of Income Tax. The following factual finding has been recorded by the Tribunal: "Therefore, the legal ground stands to be admitted and the same relates to invalid notice issued u/s. 143 (2) of the Act. It is a settled position of law that for carrying out the assessment proceedings u/s. 143 (3) of the Act, the statutory requirement of serving of valid notice u/s. 143 (2) of the Act is must and in absence thereof the subsequent proceedings become invalid. In the case of assessee, the facts are that the assessee has declared income of Rs.48,47,180/- in the e-return filed on 26.09.2012. For selecting the case for scrutiny notice u/s. 143 (2) of the Act was issued by ITO, Ward-9(4), 23.09.2013. The Central Board of Direct Taxes (CBDT vide Instruction No.1/2011 supra) revised the monetary limit for issuing notice by ITO/DCS/ACs. Through this instruction it stated that in case of metro cities in case of corporates declare income above Rs.30 lakh the jurisdiction of such corporate assessee will lie with the DCs/ACs. It is not in dispute that as on the date of selecting the case for having Kolkata dated scrutiny,

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ITA No. 3236/KOL/2025 Haran Chandra Cold Storage P. Ltd.; A.Y. 17-18 the very basis for jurisdiction over the assessee is the returned income which was more than Rs.30 lakhs and the same was lying with the DCs/Acs but the notice u/s. 143 (2) of the Act has been issued by ITO, Ward-9(4), Kolkata. It is true that subsequently the assessment has been framed byDCIT, Circle-9(2), Kolkata but the point in dispute is that on date of issuing a notice u/s. 143 (2) of the Act, whether the ITO, Ward-9(4), Kolkata was having a valid jurisdiction to issue such notice u/s. 143 (2) of the Act." The above factual position recorded by the Tribunal is not in dispute. Therefore, we are of the clear view that the Tribunal rightly allowed the assessee's appeal and quashed the scrutiny proceedings as defect in issuance of notice is incurable as it goes to the root of the matter. Thus, we find no ground to differ with the findings recorded by the learned Tribunal. In the result, the appeal filed by the revenue (ITAT/39/2023) is dismissed and the substantial questions of law are answered against the revenue. Consequently, the connected application for stay (IA No.GA/2/1/2023) also stands closed.” 7. Similarly, the case of the assessee also find support from the decision of Hon'ble Jurisdictional High Court Calcutta in case of PCIT Vs. Mintu Das in ITAT/167/2025, IA No. GA/1/2025, GA/2/2025 vide order dated 14.01.2026, wherein it has held as under:-

“We, after hearing the rival submissions of the parties and perusing the materials available on record note that the return of income of the assessee was of Rs.16,50,920/ which falls under the jurisdiction of the ITO, Ward- 28(2), Kolkata but notice u/s 143(2) of the Act was issued by ACIT, Circle-28, Kolkata and also the assessment order was duly framed by ACIT, Circle-28. Kolkata, which is clearly a violation of the jurisdictional mandate under CBDT Circular No. 1/2011 dated 31.01.2011. We note that this procedural irregularity rendered the assessment proceedings invalid and bad in law." This Court observes that the jurisdictional issue has rightly been determined by the learned Tribunal and no substantial questions of law arises in this appeal. In view of the above, we dismiss the appeal. Accordingly, the stay petition (GA/2/2025) is also dismissed.”

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ITA No. 3236/KOL/2025 Haran Chandra Cold Storage P. Ltd.; A.Y. 17-18 8. Considering the facts and circumstances of the case and also relying on the above decisions, we quash the assessment framed by the ld. AO as invalid.

In the result, the appeal of the assessee is allowed.

Order pronounced on 16.09.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 16.09.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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HARAN CHANDRA COLD STORAGE P. LTD.,KOLKATA vs. A.C.I.T., CIRCLE - 23(1), HOOGHLY

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