RAJESH JALAN,KOLKATA vs. ITO, WARD 49(1),, KOLKATA

ITA 1173/KOL/2026Status: DisposedITAT Kolkata16 October 2026AY 2015-20164 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the non-service of the notice under Section 143(2) is a fatal defect, rendering the assessment order dated 22.12.2017 a nullity in the eyes of law. It was noted that the notice issued on 01.08.2016 was returned by postal authorities with the comment 'Left', and thereafter, the database did not indicate how it was served. This failure to serve the notice goes to the root of the matter. Furthermore, the Tribunal found that the notice under Section 143(2) was issued by the ACIT, whereas the assessee's declared income was below the threshold stipulated in CBDT Circular 1/2011 for assessment by the ITO. This action was considered a violation of the circular and the jurisdictional High Court's decision in Kusum Goyal vs. ITO & ors. Consequently, the assessment framed by the AO was quashed on both grounds. The appeal of the assessee was allowed.

What were the facts?

The assessee, Rajesh Jalan, filed his return of income for Assessment Year 2015-16 declaring Rs. 1,96,740/-. The case was selected for scrutiny. The Assessing Officer (AO) treated long-term capital gains from the sale of equity shares of M/s Jackson Investments Ltd. as bogus and added it to the assessee's income. The assessee's appeal before the Ld. Commissioner of Income Tax (Appeals)-Addl/JCIT(A)-2, Gurugram, was dismissed, confirming the AO's assessment framed under Section 143(3). The assessee's primary contention was that the assessment was framed without a mandatory notice under Section 143(2) and that the notice, if issued, was not properly served and was issued in violation of CBDT circulars regarding pecuniary jurisdiction.

What were the issues?

1. Whether the assessment framed under Section 143(3) is valid when the mandatory notice under Section 143(2) was not properly served on the assessee, rendering the assessment a nullity? 2. Whether the assessment framed by the Income Tax Officer (ITO) is bad in law due to the notice under Section 143(2) being issued by the Assistant Commissioner of Income Tax (ACIT), thereby violating the pecuniary jurisdiction stipulated by CBDT Circular 1/2011? Assessee's Contentions: - The notice under Section 143(2) was not served on the assessee, as indicated by the postal authority's remark 'Left' and subsequent inability to trace service. - The issuance of notice by the ACIT, Circle 62, Kolkata, for an assessee with declared income below Rs. 15 Lacs, violates CBDT Circular 1/2011, which mandates assessment by the ITO in such cases. - Reliance was placed on the jurisdictional High Court decision in Kusum Goyal vs. ITO & ors. regarding the necessity of proper service and adherence to jurisdictional instructions. Revenue's Contentions: - The judgment records no specific contentions for the revenue on these issues.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 143(2),Section 119

AI-generated summary — verify with the full judgment below

आयकर अपील"य अ"धकरण, कोलकाता पीठ “एसएमसी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH: KOLKATA "ी राजेश कुमार, लेखा सट"य के सम" [Before Shri Rajesh Kumar, Accountant Member]

Assessment Year: 2015-16 Rajesh Jalan Vs. ITO, Ward-49(1), Kolkata

(PAN: ADAPJ 6706 H) ( अपीलाथ" ) Respondent / ""यथ" Appellant / Date of Hearing / सुनवाई 16.10.2026 क" "त"थ Date of Pronouncement/ 16.10.2026 आदेश उ"घोषणा क" "त"थ For the Appellant/ Shri Somnath Ghosh, Advocate "नधा"रती क" ओर से For the Respondent/ Shri Sobhan Sutradhar, Sr. DR राज"व क" ओर से

ORDER / आदेश

This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-Addl/JCIT(A)-2, Gurugram (hereinafter referred to as the “Ld. CIT(A)”] dated 07.01.2026 for the AY 2015-16. 2. The issues raised by the assessee during the hearing were against the order of Ld. CIT(A) confirming the assessment framed u/s 143(3) dated 22.12.2017 de hors the Assessment Year: 2015-16 Rajesh Jalan mandatory notice u/s 143(2) of the Act and also the said notice is issued in violation of of the CBDT circular 1/2011 [F. No. 187/12/2010-IT(A-I)] dated 31.01.201

The order continues below.

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