A notice issued under Section 143(2) of the Income Tax Act by an assessing officer lacking pecuniary jurisdiction, as defined by CBDT monetary limits, constitutes an inherent and incurable jurisdictional defect, rendering the resulting assessment proceedings and order invalid.

O R D E R

Per Rahul Chaudhary, Judicial Member:

1. The present appeal preferred by the Assessee is directed against the Order, dated 14/08/2025, passed by the Additional/Joint Commissioner of Income Tax (Appeals), Agra [hereinafter referred to as the ‘CIT(A)’] whereby Learned CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 22/02/2016, passed under Section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], for the Assessment Year 2013-2014.

2. When the appeal was taken up for hearing the Learned Authorized Representative for the Assessee pressed into service the following Additional Ground raised vide Letter, dated 16/03/2026:

Additional Ground of Appeal

The statutory notice issued under section 143(2) of the Act and the consequential assessment proceeding are bad in law.

1. The notice dated 13.09.2014 issued by the Income Tax Officer under section 143(2) of the Act is without jurisdiction and bad in law. The returned income of the Appellant is Rs.34,09,725/- which exceeds Rs.20 Lacs. Thus, in light of the Instruction No.1/2011 [F.No.187/12/2010-IT (A-1). Dated 31.01.2011, the jurisdiction to issue the statutory notices and complete the assessment lies with the Deputy Commissioner of Income Tax/Assistant Commissioner of Income. Hence, the notice under section 143(2) of the Act issued by the ITO and consequential assessment proceedings are bad in law and the same may be quashed.”

3. The Learned Authorised Representative for the Assessee submitted that the assumption of jurisdiction by the Assessing Officer for framing assessment under Section 143(3) of the Act for the Assessment Year 2013-2014 was bad in law since the notice under Section 143(2) of the Act was issued by Income Tax Officer whereas the jurisdiction has been vested in the Assistant Commissioner or Deputy Commissioner of Income Tax in terms of Instruction No.1 of 2011 issued by Central Board of Direct Taxes (CBDT). Reliance was also placed on judicial precedents forming part of the paper-book.

4. Per contra Learned Departmental Representative opposed the admission of the additional ground and submitted that the additional ground was being raised for the first time before the Tribunal. Learned Departmental Representative submitted that the raise ground was raised belatedly and should not be entertained.

5. In rejoinder, the Learned Authorised Representative reiterated the submission and submitted the legal contention raised by the Assessee did not require inquiry into new facts and therefore, the Tribunal could entertain and adjudicate the same in view of judgment of the Hon’ble Supreme Court in the case of Thermal Power Co. Ltd. Vs. CIT: 229 ITR 383.

6. We have considered the rival submissions and have perused the relevant material on record. Keeping in view the judgment of the Hon’ble Supreme Court in the case of Thermal Power Co. Ltd. Vs. CIT: 229 ITR 383, we admit the additional ground raised by the Assessee since the same is a legal grounds which can be adjudicated on the basis of material on record without inquiring into new facts.

7. On perusal of Instruction No.1 of 2011 issued by CBDT, we find that same provides revised monetary limits for assumption of jurisdiction and/or assigning cases to Income Tax Officers and Deputy Commissioners/Assistant Commissioners and read as under:

“References have been received by the Board from the large number of taxpayers especially from moffssil areas, that the existing monetary limit