An assessment order is void ab-initio if the initiating notice under Section 143(2) of the Income Tax Act is issued by a non-jurisdictional Assessing Officer, and the case file is transferred between officers without an order passed under Section 127 of the Act.

O R D E R

PER S. RIFAUR RAHMAN, AM :

1. This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [“Ld. CIT(A)”, for short] dated 29.05.2025 for the Assessment Year 2015-16 raising following grounds of appeal :-

“1. That the limited scrutiny notice issued u/s 143(2) of the Act is further illegal and not tenable under the law as the reasons for selection of the case for limited scrutiny were not incorporated in the notice issued under section 143(2) of the Act.

2. That the assessment order passed u/s 143(3) of the Act is further illegal and void ab initio under the law because of unauthorized expansion of scope of limited scrutiny.

3. That the additions of Rs.5,15,35,068/- made by Ld. AO u/s 69 of the Act is illegal and not tenable under the law.

4. That the addition of Rs.5,15,35,068/- made by Ld. AO is not sustainable under the law because no Show Cause notice allowing opportunity of being heard proposing stilted addition was issued by Ld. AO during the course of assessment proceedings.

5. That the Ld. AO grossly erred in law and in facts of the case in making addition and Ld. CIT(A) grossly erred in confirming the addition of Rs.5,15,.35,068/- u/s 69 of tile Act ignoring the evidences and explanations filed by the assessee for explaining the source of the investment without bringing any evidence on record to the contrary OR placing the same before the assessee for his rebuttal.

6. That the assessment order passed by Ld. AO u/s 143(3) of the Act and the appellate order passed by Ld. CIT(A) are bad in law and are passed in contravention of prevailing law as well as facts of the case, therefore liable to be annulled.

7. That the assessment proceedings undertaken and completed in case of assessee u/s 143(3) of the Act is void-ab-initio invalid due to issue of notice u/s 143(2) of the Act by non-jurisdictional AO.

8. That the assessment proceedings undertaken and completed in case of assessee u/s 143(3) of the Act is further not sustainable under the law because of change of jurisdiction over the case of assessee without any order being passed u/s 127 of the Act after giving notice to the assessee.

9. That the Ld. AO has acted against the law and facts by ignoring the evidences filed by the assessee for explaining the source of the investment without bringing any evidence on record to the contrary OR placing the same before the assessee for his rebuttal. Thus, the AO violated the principles of natural justice and the addition is made merely on suspicion and presumption.

10. That Ld. AO grossly erred ill law and in facts of the case in disallowing Short-Term Capital Loss of Rs.16,65,15,162/- from quoted shares alleging the same to non-genuine.

11. That Ld. AO grossly erred in law and in facts of the case in disallowing Short-Term Capital Loss of Rs.16,65,15,162/- from quoted shares while accepting LTCG of Rs.17,96,65.643/- from sale of unquoted shares as such.”

2. At the time of hearing, ld. AR of the assessee specifically pressed the legal ground raised in Ground No.7. Ld. AR brought to our notice page 47 of the paper book which is the notice issued under section 143(2) of the Income tax Act, 1961 (for short ‘the Act’) on 28.09.2016 by ACIT, CIRCLE 4 (1), Gurgaon for making limited scrutiny. Further he brought to our notice page 53 of the paper book which is the letter submitted by the assessee to the Assessing Officer, Circle 4, Gurgaon in response to final opportunity given to the a