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Facts
The assessee filed an income tax return for AY 2015-16 declaring income of ₹49,24,210. The case was selected for scrutiny, and a notice under section 143(2) of the Act was issued by the ITO, Ward 7(1), Kolkata. The assessee's appeal against the assessment order was dismissed by the CIT(A).
Held
The Tribunal held that the notice issued under section 143(2) by the ITO, Ward 7(1), Kolkata, was in violation of the CBDT Instruction No.1/2011 regarding pecuniary jurisdiction. The income declared by the assessee exceeded the limit for an ITO and should have been handled by a DC/AC.
Key Issues
Whether the notice issued under section 143(2) of the Act was valid, considering the pecuniary jurisdiction of the issuing authority as per CBDT instruction.
Sections Cited
143(2), 143(3), 139(1)
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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
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 08.05.2025 for the AY 2015-16.
The only issue raised by the assessee is against the notice issued u/s 143(2) of the Act by non-judicial AO and therefore, the notice itself as well as the consequential assessment framed u/s 143(3) of the Act dated 30.12.2017, is nullity and bad in law.
The facts in brief are that the assessee filed the return of income on 29.09.2015, declaring total income at ₹49,24,210. The case of the assessee was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS) and notice u/s 143(2) of the Act dated 11.04.2016
In the appellate proceedings, the ld. CIT (A) dismissed the appeal of the assessee by simply confirming the additions made by the ld. AO.
The ld. AR vehemently submitted before us that the return of income as per the return of income is ₹49,24,210/- and therefore the jurisdiction to issue notice u/s 143(2) in terms of CBDT instruction No.1/2011 (F. No. 187/12/2010-IT(A-1), Dated 31.01.2011 is with DCOT and not with the ITO, Ward 7(1), Kolkata, who has issued notice u/s 143(2). The ld. AR stated that notice u/s 143(2) of the Act by the ITO, Ward 7(1), Kolkata, which is in violation of pecuniary jurisdiction of the CBDT instruction No.1/2011 (F. No. 187/12/2010-IT(A-1), Dated 31.01.2011. 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 ld. AR therefore prayed that the notice u/s 143(2) dated 11.04.2016 is invalid and escaped the assessment framed by the ld. AO. The Ld. A.R in defense of arguments relied on the decision of the Jurisdictional High Court in the case of Kusum Goyal vs. ITO & ors in GA No. 81 of 2010 WP No. 1229 of 2009 wherein the Hon’ble Court has decided the similar issue in favour of the assessee. The ld. AR also submitted that even on pecuniary jurisdiction was not with the ITO, Ward 7(1), Kolkata as the income return was ₹49,24,210/- and accordingly the return of income was filed with DCIT. The ld. AR argued that the order passed by the ITO, Ward 7(1), Kolkata is invalid on this 5.1. The ld. DR on the other hand, submitted that the income is marginal above ₹20 lacs and assessee has never challenged the issue before the ld. AO or before the ld. CIT (A). The ld. DR submitted that the CBDT circular does not overtake the legislation framed by the Parliament. The ld. DR submitted that this is an administrative mater and therefore, the appeal may be restored to the file of the AO. The ld. DR relied on the decisions of CIT vs. Shankar Lall Goenka [2025] 174 taxmann.com 31 (Gauhati) vide order dated 25-04-2025 & C. Krishnan vs. ITO [2014] 52 taxmann.com 30 (Madras) dated 27-11- 2014.
5.2. After hearing the rival contentions and perusing the materials available on record, we find merit in the argument of the ld. AR that notice u/s 143(2) of the Act dated 11.04.2016, was issued by the ITO, Ward 7(1), Kolkata, which is in violation of pecuniary jurisdiction of the CBDT instruction No.1/2011 (F. No. 187/12/2010-IT(A-1), Dated 31.01.2011. 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:-
5.3. In the present case, the assessee filed the return of income u/s 139(1) of the Act on 29.09.2015, disclosing total income of ₹49,24,210/-. We note that notice u/s 143(2) was issued on 11.04.2016 by ITO, Ward 7(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 notice has been issued by non- jurisdictional AO while the assessment was framed u/s 143(3) of the Act 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
5.4. Considering the facts and circumstances of the case and also relying on the above decisions, we hold that the assessment framed by the AO, DCIT, Circle 7(1), Kolkata is invalid and is accordingly quashed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 14.01.2026.