Facts of the Case

The petitioner, Ambience Towers 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) of the Act for Assessment Year 2023-24.

The principal grievance of the petitioner was that the notice under Section 143(2) had been issued by an officer who was allegedly not a “prescribed income-tax authority”, and therefore lacked jurisdiction. On this basis, the petitioner further contended that the consequential notices under Section 142(1) were invalid and beyond limitation.

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 phrase “as the case may be” in Section 143(2) implies that where jurisdiction vests in the Assessing Officer, only such Assessing Officer can issue the notice. It was contended that the prescribed income-tax authority could, at best, only serve the notice and not issue it.

It was further argued that notices under Section 143(2) should be issued only by officers of the National Faceless Assessment Centre (NaFAC), and issuance by any other officer defeats the scheme of faceless assessment. On this premise, it was submitted that the subsequent notices under Section 142(1) were also without jurisdiction and barred by limitation.

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 relied on Rule 12E of the Income-tax Rules, 1962, which empowers the CBDT to authorise income-tax officers to act as prescribed authorities.

The Revenue placed reliance on CBDT Notifications dated 12.05.2022 and 28.05.2022, which authorised the Assistant Commissioner/Deputy Commissioner of Income Tax (International Taxation), Circle-1(1)(1), Delhi, to issue notices under Section 143(2). It was contended that the impugned notice was therefore issued with full jurisdiction.

Court Order / Findings

The Delhi High Court examined the statutory scheme under Section 143(2) and Rule 12E and held that a notice under Section 143(2) can validly be issued by either the Assessing Officer or the prescribed income-tax authority, as the case may be.

The Court rejected the interpretation advanced by the petitioner and held that the phrase “as the case may be” does not restrict issuance solely to the jurisdictional Assessing Officer. The Court further held that Rule 12E expressly empowers the CBDT to authorise 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 only NaFAC officers could issue notices under Section 143(2) was found to be unsupported by the statutory framework. The argument that the prescribed authority could only “serve” and not “issue” the notice was also rejected as insubstantial.

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 consequential notices under Section 142(1). The faceless assessment scheme does not override jurisdiction expressly 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 by a competent authority within jurisdiction and limitation. All pending applications were also disposed of.

link to download the order- https://www.mytaxexpert.co.in/uploads/1770112727_AMBIENCETOWERSPRIVATELIMITEDVsASSISTANTCOMMISSIONEROFINCOMETAXANR..pdf 

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