The Supreme Court recently in the case of DCIT(E) v Kalinga Institute of Industrial
Technology [2023] 454 ITR 582 (SC) had an occasion to consider the aspect
regarding the jurisdiction of an AO issuing a notice u/s.143(2). In the facts of that
case, the assessee filed a writ petition challenging the notice issued u/s.143(2) by an
Officer without jurisdiction. The High Court allowed the writ petition on the premise
that a non-jurisdictional officer could not issue the notice u/s.143(2). The Supreme
Court on the appraisal of facts found that the assessee has participated in the
proceedings pursuant to the notice and has not questioned the jurisdiction of the AO.
The Supreme Court therefore concluded hat section 124(3)(a) precluded an
assessee from questioning the jurisdiction of an AO if he does not do it within 30
days from the date of receipt of the notice. Thus one can see that if the jurisdiction of
an Assessing Officer is to be questioned, the same has to be questioned in
accordance with section 124 and cannot be questioned thereafter.
However, there have been instances where AO’s after issuing notices u/s.143(2)
have transferred files to other officers on the basis that the jurisdiction does not lie
with the Officer issuing notices but with a different officer. It is felt that in such cases
the decision of the Supreme Court cannot be an impediment on questioning the
jurisdiction of an AO even though the timelines in section 124 have lapsed. If the
communication from the AO having issued the notice, to the AO having jurisdiction is
within the timelines in section 124, the issue of questioning the jurisdiction within
timelines u/s.124 would definitely not arise since the AO issuing notice himself has
conceded that no jurisdiction ever vested with him.
In any case, the issue of questioning the jurisdiction within timelines may become
redundant in the light of notices being issued and assessments being conducted in
faceless manner.
section 124, # section 143(2), # jurisdiction of AO, # validity of assessment
