Top Stories AO is “Prescribed Income Tax Authority” to issue Notices u/s 143(2) and 142(1): Delhi HC [Read Order] The Petitioner sought to challenge the jurisdiction and powers exercisable by the Assessing Officer By Avinash Kurungot – On October 21, 2024 6:12 pm – 2 mins read The Delhi High Court recently dismissed a petition challenging Notices issued by the Assistant Commissioner of Income Tax under Sections 143(2) and 142(1) of the Income Tax Act, 1961, affirming the stature of an Assessing Officer ( AO ) as a “Prescribed Income Tax Authority” authorized to issue the above-mentioned Notices under the Act and Rules therein.

The Petition was lodged by Ambience Towers Private Limited, a subsidiary of Ambience Group challenging impugned Notices issued under Section 143(2) and Section 142(1) of the Income Tax Act, 1961 against the financials of the Petitioner for the Assessment Year (A.Y.) 2023-24. Get a Copy of Direct Taxes Law and Practices Including Tax Planning with Free E-Book Access, Click Here Petitioner raised the contention that the Assessing Officer, Central Circle 20, Delhi (AO) does not qualify to be a ‘prescribed income-tax authority’ capable of “issuing” a notice but is only capable of ‘merely serving a notice’. The Petitioner also laid claims of expiry of permitted limitation period to issue said notices.

N.P. Sahni appearing for the Petitioner, laid reference to the provisions of Section 143(2) of the Income Tax Act, 1961 and averred that in the event the jurisdiction to issue Notices lies with the Assessing Officer, then that officer alone can issue such notice, disentitling any other ‘prescribed income tax authority’ to conduct such issuance. In response, Vipul Agrawal, Senior Standing counsel for the Respondent Revenue,  along Gibran Naushad and Sakashi Shairwal exemplified their stance though Section 12E of the Income Tax Rules, 1962 which empowers the Central Board of Direct Taxes (CBDT) to authorize an Income Tax Officer to act as an Income Tax Authority for the purposes of duties listed in Section 143(2) of the Income Tax Act, 1961.

The Respondent Counsel further alluded to CBDT Notification No.56/2022 dated 28.05.2022 authorizing the ‘the Assistant Commissioner of Income Tax/ Deputy Commissioner of Income Tax (International Taxation), Circle -1(1)(1), Delhi to act as the ‘Prescribed Income-tax Authority’ for the purpose of issuance of notice under sub- section (2) of section 143 of the Act.’

The two-member Bench of the Delhi High Court constituted by Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed the lack of merit in the Petitioner’s contention rebuking the jurisdiction exercisable by the Respondent. Get a Copy of Direct Taxes Law and Practices Including Tax Planning with Free E-Book Access, Click Here Additionally, the Bench held the submission seeking disentitlement of the Respondent to ‘issue’ Notices, rather just being able to ‘serve’ them as unsubstantial while holding that once the jurisdiction of AO to issue a notice has been accepted, the AO may adopt all proceedings required to complete the assessment. In light of observations made, the Delhi High Court dismissed the Petition and allied applications on its lack of merit. To Read the full text of the Order CLICK HERE