A.H. CHEMICALS PVT. LTD., ,KOLKATA V. DCIT, CIRCLE 10(1), , KOLKATA

ITA 1149/KOL/2025

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A.H. Chemicals Pvt. Ltd. appealed against the assessment order for the assessment year 2015-16, which was challenged on the grounds of jurisdictional error and procedural impropriety. The primary contention was the non-issuance of a valid notice under section 143(2) of the Income Tax Act, 1961, by the appropriate authority as mandated by CBDT Instruction No.1/2011. The Tribunal examined the procedural compliance in issuing notices and the subsequent framing of the assessment order, referencing decisions from the Calcutta High Court and other precedents to support the appellant's position.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779947 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 27-05-2025
• Other Referred Cases: Raghvendra Mohta Vs. ACIT, PCIT Vs. Raghvendra Mohta, Bhagyalaxmi Conclave (P) Ltd. vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRATA AICH
• Assessee Lawyers: SOMNATH GHOSH
• Section: 143(3); 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA No.1149/KOL/2025 (Assessment Year:2015-16) A.H. Chemicals Pvt. ltd. C/o S.N. Ghosh & Associates, Advocates 2, Garstin Place, 2 nd Floor, Suite No.203, Off hare Street, Kolkata-700001, West Bengal Vs. DCIT, Circle 10(1), Kolkata Aaykar Bhawan Poorva, P-7, Chowringhee Square, Third Floor, Kolkata-700069, West Bengal (Appellant) (Respondent) PAN No. AAACL4363J Assessee by : Shri Somnath Ghosh, AR Revenue by : Subrata Aich, DR Date of hearing: 18.09.2025 Date of pronouncement: 15.10.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 04.03.2025 for the AY 2015-16. 02. The assessee has raised following ground no.1: - “1. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. failed to appreciate that none of the conditions precedent existed for and/or were fulfilled by the Ld. Deputy Commissioner of Income Tax. Circle 10(1). Kolkata for his specious action of assuming jurisdiction to frame the assessment order u/s. 143(3) of the Income Tax Act, 1961 de hors any valid notice issued u/s. 143(2) of the Act in that respect and the specious assessment order dated 24- 12-2017 framed thereunder is therefore ab initio void, ultra vires and ex-facie null in law.” Printed from counselvise.com Page | 2 ITA No.1149/KOL/2025 A.H. Chemicals pvt. Ltd; A.Y. 2015-16 03. The assessee has challenged the assessment framed by the ld. AO on the ground of non-issuance of notice u/s 143(2) of the Act by the ld. ACIT. 04. The facts in brief are that the assessee filed the return of income on 30.11.2025, declaring total income at ₹64,26,560/-. The case of the assessee was selected under scrutiny through Computer Assisted Scrutiny Selection (CASS). Accordingly, notice u/s 143(2) of the Act was issued on 08.04.2016 by ITO Ward 11(2), Kolkata and was duly served upon the assessee, whereas the assessment was framed by the DCIT, Circle 10(1), Kolkata. In our opinion, the notice issued by the ITO, Ward 11(2), u/s 143(2) of the Act is invalid as same is not in accordance with the CBDT instruction no.1/2011 (F.No.187/12/2010- IT(A-1), dated 31.01.2011, which is extracted below: - “Instruction No.1/2011 [F.No.187/12/2010-ΙΠ(A-1), DATED 31-1-2011 References have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCS/ACs is causing hardship to the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. Income declared (mofussil areas) Income declared (metro cities) ITOs Acs/ DCs ITOs DCs/ Acs Corporate returns Upto ₹20 lcs Above ₹20 lacs Upto ₹30 lacs Above ₹30 lacs Non-corporate returns Upto ₹15 lacs Above ₹15 lacs Upto ₹20 lacs Above ₹20 lacs An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011.\"” Printed from counselvise.com Page | 3 ITA No.1149/KOL/2025 A.H. Chemicals pvt. Ltd; A.Y. 2015-16 05. Therefore, though the assessment was framed by the DCIT dehors issuance of notice u/s 143(2) of the Act is bad in law. The case of the assessee find support from the decision of RaghvendraMohta Vs. ACIT in ITA no. 2416/KOL/2017 for A.Y. 2014-15, which was affirmed by the Hon'ble Jurisdictional High Court in case of PCIT Vs. RaghvendraMohta in ITAT/51/2025 in IA no. GA/1/2025, GA/2/2025, wherein the Hon'ble High Court has held as under: - “We have heard Mr. PrithuDudhoria, learned advocate for the appellant and Mr. AbhratoshMazumder, learned senior counsel assisted by Mr. Avra Mazumder, learned advocate for the respondent. The assessee preferred appeal before the learned Tribunal challenging the order passed by the Commissioner of Income Tax (Appeals)-10, Kolkata (CIT(A)] dated 26.9.2017. One of the grounds urged before the learned Tribunal was that the Assessing Officer, who passed the assessment order did not have jurisdiction over the case of the assessee and, therefore, the notice as well as the assessment order are bad in law. The learned Tribunal took note of the facts and circumstances of the case and found that the assessee filed its return of income declaring the income to be nil. Subsequently, notice under section 143(2) was issued on 10.9.2015 and notice under section 142(1) dated 13.6.2016 was issued along with the questionnaire. The assessee contended that the notices were without jurisdiction and relied upon section 120 of the Act. In this regard, the assessee referred to the notification issued by the CBDT in Instruction No.1 of 2011. The learned Tribunal took into consideration the facts of the case and found that the assessment has been framed by the Assessing Officer, who inherently lacks jurisdiction to do so. The learned Tribunal took note of the decision of a Co-ordinate Bench of the learned Tribunal in the case of Bhagyalaxmi Conclave (P) Ltd. us. DCIT dated 3.2.2021. Apart from other decisions and allowed the assessee's appeal, the revenue had challenged the order passed in the case of Bhagyalaxmi Conclave (P) Ltd. before this court in ITAT/221/2022 etc. and by a judgment reported in 2022 (12) TMI 1514, the appeal filed by the department was dismissed wherein one of the questions framed is identical to the substantial questions of law suggested by the revenue in the instant case. Thus, we find that the learned Tribunal was right in allowing the assessee' appeal and setting aside the order passed by the Assessing Officer on the ground of lack of inherent jurisdiction. For the above reason, the appeal is dismissed and the substantial questions of law are answered against the revenue.” 06. Therefore, following the decision of the Hon'ble Calcutta High Court, we quash the assessment framed by the learned AO on the Printed from counselvise.com Page | 4 ITA No.1149/KOL/2025 A.H. Chemicals pvt. Ltd; A.Y. 2015-16 ground of lack of inheritance jurisdiction. The ground no.1 of the assessee is allowed. 07. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 15.10.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 15.10.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "