A notice issued under Section 143(2) of the Income Tax Act by an officer lacking the requisite pecuniary jurisdiction as per CBDT instructions is inherently defective and legally invalid, rendering the entire subsequent assessment proceedings under Section 143(3) void ab initio.

O R D E R

PER VIMAL KUMAR, JM:

The appeal filed by the Assessee is against order dated 18.03.2019 of Learned Commissioner of Income Tax (Appeals)-28, New Delhi [hereinafter referred to as ‘the Ld. CIT(A)’] passed u/s 250 of the Income Tax Act, 1961, [hereinafter referred to as ‘the Act’] arising out of assessment order dated 26.12.2017 of Ld. Assessing Officer/Assistant Commissioner of Income Tax, Circle-70(1), New Delhi for Assessment Year 2015-16.

2. Brief facts of the case are that assessee filed return of income on 30.08.2015 declaring total income of Rs.99,47,310/-. The case was selected under Limited Scrutiny through CASS. Notice u/s 143(2) of the Act dated 19.09.2016 was issued. Notice u/s 142(1) dated 08.08.2017 along with questionnaire was issued to the assessee. Sh. Rajat Barnwal, FCA & AR of the assessee attended the assessment proceedings and filed submissions. On completion of proceedings, Ld. AO vide order dated 26.12.2017 made addition of Rs. 3,92,00,000/- as LTCG. Against order dated 26.12.2017 of Ld. AO, the assessee filed appeal before the Ld. CIT(A) which was dismissed vide order dated 18.03.2019.

3. Being aggrieved appellant assessee preferred present appeal on following grounds

“1. (i) That the order of the Ld. Commissioner of Income Tax Appeals 28 (hereinafter called CIT (A)) dismissing the appeal is illegal, unjust, opposed to facts and suffers from the vice of arbitrariness.

(ii) That each ground of appeal is an independent ground, without prejudice to each other.

2. That on the facts and circumstances of the case and in law, the Same as order of the CIT (A) is bad in the eyes of law, since, Ld. AO in-spite of being informed that the value assessed by the stamp valuation authority is far in excess of fair market value, did not refer the valuation, in terms of section 50C(2) of the IT Act. The Assessment so framed is illegal and the same be annulled.

3. That on the facts and circumstances of the case and in law, the order of the CIT (A) is bad in the eyes of law, since Ld. AO has adopted the fair market value of stamp valuation authority of Union Territory of Delhi whereas section 50C refers to the value assessed by the authority of State Government and not of Union Territory.

4. That on the facts and circumstances of the case and in law, the order of the Ld. AO and confirmation by CIT A are both bad in the eyes of law, since the assessment has been made under a wrong jurisdiction whereas the assessee being a director of a company, the jurisdiction of the appellant lies with the assessing officer of the company.

5. That on the facts and circumstances of the case and in law, the order of the Ld. AO is bad in the eyes of law, since sufficient opportunity to file explanation against show cause notice dt. 18.12.2017 was not provided. It is a case of miscarriage of justice.

6. That the net income of the appellant be reduced by Rs.3,92,00,000/-.”

4. Through application dated 10.01.2024, assessee pleaded following additional grounds:

“1) That the assessment made by ACIT Circle-70(1) New Delhi is without issue of any valid notice u/s 143(2) is an illegal assessment and the same be annulled. Notice u/s 143(2) dated 19.09.2016 issued by ITO Ward-7(1) Kolkata is a notice issued by a non-jurisdictional AO who had no jurisdiction to assess income of Rs. 99,47,310/-.

2) i. That the assessment made u/s 143(3) by ACIT Circle - 70(1) is made by a non-jurisdictional AO. The correct jurisdiction of the appellant falls under the Corporate Charge with ACIT Circle-5 (2) having jurisdiction over the company Crown Timber and Foods Pvt. Ltd. in which the appellant is a director and has drawn salary of Rs. 6,30