Assessment Void Where Notice Issued by Officer Lacking Pecuniary Jurisdiction: Calcutta High Court

The Calcutta High Court has held that assessment void where notice issued by officers lacking pecuniary jurisdiction. The Bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar dismissed an appeal filed by the Principal Commissioner of Income Tax-9, Kolkata, against an order of the Income Tax Appellate Tribunal (ITAT) that had quashed an assessment on the ground of lack of jurisdiction. At the outset, the Court allowed the Revenue’s application seeking condonation of a 57-day delay in filing the appeal, finding sufficient cause for the delay. With the procedural hurdle cleared, the Court proceeded to examine the merits of the case and the questions of law proposed by the Revenue. The dispute stemmed from an assessment framed under Section 143(3) of the Income Tax Act, 1961, in the case of assessee Mintu Das. The assessee had filed a return of income declaring ₹16.50 lakh. Despite the income being below the monetary threshold prescribed for Assistant Commissioners of Income Tax (ACIT), the notice under Section 143(2) and the final assessment order were both issued and passed by the ACIT, Circle-28, Kolkata. Before the ITAT, the assessee contended that, in terms of CBDT Circular No. 1/2011 dated 31 January 2011, cases with returned income below ₹20 lakh fell within the jurisdiction of the Income Tax Officer (ITO) and not the ACIT. This jurisdictional defect, it was argued, vitiated the entire assessment proceedings. Accepting this contention, the ITAT held that issuance of a valid notice under Section 143(2) by the competent Assessing Officer is a sine qua non for framing an assessment under Section 143(3). Since the notice and assessment were issued by an officer lacking pecuniary jurisdiction, the proceedings were declared invalid and unsustainable in law. Challenging the Tribunal’s order, the Revenue proposed multiple substantial questions of law. It argued that the assessee had participated fully in the assessment proceedings without raising any objection under Section 124(3) of the Act and was therefore barred from questioning jurisdiction at a later stage. The Revenue also contended that CBDT Instruction No. 1/2011 was merely administrative in nature and could not override statutory provisions governing jurisdiction. Further, reliance was placed on Section 292BB of the Act to submit that any defect in service of notice stood cured due to the assessee’s participation. On merits, the Revenue highlighted that the additions were made under Sections 68 and 69 read with Section 115BBE in relation to alleged penny stock transactions, asserting that the Tribunal failed to apply the test of human probabilities. After examining the Tribunal’s order and the material on record, the High Court concurred with the ITAT’s reasoning. The Court noted that the assessee’s returned income clearly fell within the jurisdiction of the ITO and not the ACIT. Issuance of notice under Section 143(2) by an officer lacking jurisdiction was not a curable irregularity but a fundamental defect going to the root of the assessment. The Bench observed that the Tribunal had rightly held the assessment proceedings to be invalid and bad in law due to violation of the jurisdictional mandate under CBDT Circular No. 1/2011. It further held that, once the assessment itself was void for want of jurisdiction, questions relating to participation, Section 292BB, or the merits of penny stock additions did not survive for consideration. Concluding that the jurisdictional issue had been correctly decided by the Tribunal, the Court held that no substantial question of law arose from the appeal. Consequently, the Revenue’s appeal was dismissed, along with the connected stay application. Case Details Case Title: Principal Commissioner Of Income Tax-9, Kolkata Vs. Mintu Das Case No.: ITAT/167/2025 Date: 14/01/2026 Counsel For Petitioner: Prithu Dudhoria Counsel For Respondent: None Click Here To Read Order Read More: DRP Assessments Invalid If Passed Beyond Limitation Under Section 153: ITAT

Assessment Void Where Notice Issued by Officer Lacking Pecuniary Jurisdiction: Calcutta High Court

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