SONTHALIA BROTHERS,CUTTACK vs. DCIT,CIRCLE-2(1),CUTTACK, CUTTACK

IN THE INCOME TAX APPELLATE TRIBUNAL “CUTTACK BENCH, CUTTACK VIRTUAL HEARING AT KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA No.258/CTK/2026 Assessment Year: 2016-17

Sonthalia Brothers DCIT, Circle-2(1), Cuttack Vs Malgodown, Cuttack, Odisha- 753003 (PAN: AAEFS6000Q) (Appellant) (Respondent)

Assessee by : Shri Mohit Sheth, AR Revenue by : Shri Vijay Singh, Sr. DR Date of Hearing : 14.05.2026 Date of Pronouncement : 14.05.2026 ORDER PER BENCH: This is an appeal filed by the assessee against the order of the CIT(A)-2, Bhubaneswar [hereinafter referred to as the ‘CIT(A)’] in appeal no.CIT(A), Cuttack/10181/2018-19 dated 12.03.2026 for the assessment year 2016-17.

ITA No.258/CTK/2026

ITA No.258/CTK/2026

3.1 The Ld AR further drew our attention to the Instruction issued by CBDT No.1/2011 [F. NO. 187/12/2010-IT(A-D] dated 31.01.2011, which read as follows:

ITA No.258/CTK/2026

3.2 The submission of the ld. AR is that the Assessing Officer specifically mentioned that the returned income of the assessee is Rs.10,51,000/- which is below the threshold limit of Rs.15,00,000/- for the "NON-CORPORATE RETURNS" for Mofussil area and notice 143(2) were issued by ACIT, Circle-2(1), Cuttack which is invalid as the competent authority to issue such notices lies with ITOs of Income Tax. It was the submission that notice u/s.143(2) of the Act has been issued by the ACIT, Circle-2(1), Cuttack did not have the pecuniary jurisdiction

ITA No.258/CTK/2026 and consequently notice u/s.143(2) of the Act is invalid and consequential assessment order is liable to be quashed. The ld. AR in this respect has drawn our attention to decision of the Hon’ble Calcutta High Court in ITAT/39/2023 in the case of PCIT vs. M/s Shree Shoppers Ltd., wherein it was held as under:

“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), Kolkala 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 re1ates to invalid notice issued u/ 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 as issued by ITA, Ward-9(4), Kolkata dated 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 corporate declare income above Rs.30 1akh the jurisdiction of such corporate assessee will lie with the DCs/ACs. It is not in dispute chat as on the date of selecting the case for scrutiny, the very basis for having jurisdiction over the assessee is the returned income which was more than Rs.30 1akhs 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), Ko1kata. It is true that subsequently the assessment has been framed by DCIT, Circle-9(2), Kolkata but the point in dispute is that on date of issuing a notice u/s. 143(2) of the At, whether the ITO, ward-9(4), Kolkata was having a valid jurisdiction to issue such notice u/s. 143(2) of the Act.” 4. In reply, ld. Sr DR vehemently supported the order of the Assessing Officer and ld. CIT(A).

ITA No.258/CTK/2026 to pecuniary jurisdiction. In the present case, admittedly, the Assessing Officer who has issued the notice u/s.143(2) of the Act did not have the pecuniary jurisdiction in view of the instruction issued by CBDT (supra). This being so, respectfully following the principles laid down by Hon’ble Calcutta High Court in the case of Shree Shoppers (supra), it is held that notice issued u/s.143(2) of the Act is without jurisdiction and the same is invalid and consequential assessments are also held as bad in law.

Sd/- Sd/- [Rajesh Kumar] [George Mathan] लेखा सदस्य/Accountant Member न्याययक सदस्य/Judicial Member

Dated: 14.05.2026. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent – 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar/Sr. PS