Facts of the Case

The petitioner, Ambience Farms Private Limited, filed a writ petition challenging a notice dated 23.06.2024 issued under Section 143(2) of the Income Tax Act, 1961, along with subsequent notices dated 10.07.2024 and 06.09.2024 issued under Section 142(1) for Assessment Year 2023-24.

The principal challenge was that the notice under Section 143(2) was issued by an officer who, according to the petitioner, was not a “prescribed income-tax authority” and therefore lacked jurisdiction. It was further contended that even if such authority existed, the officer could only “serve” and not “issue” the notice. On this basis, the petitioner also argued that the subsequent notices under Section 142(1) were barred by limitation and without jurisdiction.

Issues Involved

Whether a notice under Section 143(2) of the Income Tax Act can be validly issued by a “prescribed income-tax authority” authorised by the CBDT under Rule 12E, and whether such authority is competent to issue (and not merely serve) the notice.

Petitioner’s Arguments

The petitioner argued that the expression “as the case may be” in Section 143(2) implies that only the Assessing Officer having jurisdiction over the assessee could issue the notice. It was contended that the prescribed income-tax authority could not issue the notice and, at best, could only serve it. The petitioner further submitted that the impugned notice was not issued by officers of the National Faceless Assessment Centre and therefore was contrary to the scheme of faceless assessment.

Respondent’s Arguments

The Revenue submitted that Section 143(2) expressly permits issuance of notice by either the Assessing Officer or the prescribed income-tax authority. It was pointed out that under Rule 12E of the Income-tax Rules, 1962, the CBDT is empowered to authorise income-tax officers to act as prescribed authorities. The Revenue relied on CBDT Notifications dated 12.05.2022 and 28.05.2022, which authorised the concerned Assistant Commissioner/Deputy Commissioner of Income Tax (International Taxation), Circle-1(1)(1), Delhi, to issue notices under Section 143(2).

Court Order / Findings

The Delhi High Court examined Section 143(2) and Rule 12E and held that the statute clearly permits issuance of notice by either the Assessing Officer or the prescribed income-tax authority. The phrase “as the case may be” does not restrict issuance solely to the jurisdictional Assessing Officer.

The Court held that Rule 12E explicitly authorises the CBDT to empower income-tax officers to act as prescribed authorities, and the notifications issued by the CBDT validly conferred such authority on the officer who issued the impugned notice. The contention that the prescribed authority could only “serve” and not “issue” the notice was found to be without merit.

The Court further rejected the argument that only officers of the National Faceless Assessment Centre could issue notices under Section 143(2), holding that neither the Act nor the Rules impose such a limitation.

Important Clarification

The Court clarified that once a notice under Section 143(2) is validly issued by a competent prescribed authority, the Assessing Officer is fully empowered to proceed with assessment and issue subsequent notices under Section 142(1). The scheme of faceless assessment does not invalidate jurisdiction otherwise lawfully conferred by statute and rules.

Final Outcome

The writ petition was dismissed. The Delhi High Court upheld the validity of the notice dated 23.06.2024 issued under Section 143(2) and the consequential notices under Section 142(1), holding that they were issued within jurisdiction and limitation. All pending applications were also disposed of.

link to download the order- https://www.mytaxexpert.co.in/uploads/1770112676_AMBIENCEFARMSPRIVATELIMITEDVsASSISTANTCOMMISSIONEROFINCOMETAXANR..pdf 

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