Case summary

Balaji Enterprise vs CIT

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The assessee firm which was assessed under Range-3, Gauhati by intimation u/s. 143(1) of the Act for earlier as well as this assessment year and subsequent assessment years. According to Ld. CIT(A), neither such facts as regards any challenge to the assumption of jurisdiction has been noted in the assessment order nor the assessee has placed on record any material in this regard thereto.Therefore, according to Ld. CIT(A), in view of the express provision of section 124(3)(b) of the Act the assessee is precluded now to challenge the assumption of jurisdiction of the AO.

Without there being valid issuance of notice u/s 143(2) of the Act, the framing of assessment order u/s 143(3) of the Act by AO Gauhati is bad in law as held by the Hon’ble Supreme Court in CIT V Hotel Blue Moon wherein the Hon’ble Supreme Court has held that issue of a legally valid notice u/s. 143(2) is mandatory for usurping jurisdiction to frame scrutiny assessment u/s. 143(3) and absence of a valid notice u/s 143(2) is not a curable defect. This view was reiterated by the Hon’ble Apex Court in the case of CIT Vs Laxman Das Khandelwal. Since in the present case no valid notice u/s 143(2) was issued by the AO who held jurisdiction over the case of the appellant, the consequent order passed u/s 143(3) was legally unsustainable and therefore is null in the eyes of law and therefore quashed. In the result, the appeal of the assessee is allowed.

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