Its case had been centralised after a search, so the company said only one officer could send it notice. The Court disagreed

Acting Chief Justice P. Sam Koshy and Justice Narsing Rao Nandikonda held that an officer notified under Rule 12E can issue a scrutiny notice even where the case stands centralised with a different assessing officer.

After a 2020 search, a Hyderabad pharmaceutical company's tax files were moved to a central circle and handled there for six years. When its 2025-26 return was picked for scrutiny, the notice came from a different officer in New Delhi. The company argued that only its own assessing officer could issue that notice, and that because he had not done so within the statutory deadline, the assessment could not go ahead. A division bench of the Telangana High Court has rejected the argument and called the petition premature.

A search, a centralised file, and a notice from Delhi

Fusion Health Care Private Limited manufactures and markets pharmaceutical formulations. A search and seizure under Section 132 was conducted on 22 December 2020 in the Yashoda Healthcare Services group cases, and the company was covered by it.

On 5 March 2021 a proposal recommended moving eight of the group's cases to the Assistant Commissioner, Central Circle 2(2), Hyderabad, for coordinated investigation and assessment. The company was sixth on the list, with its jurisdiction shown as Circle 8(1) and the reason given as "covered under Section 132". Its PAN was migrated. Since then the central circle has handled all of its proceedings: search assessments under Section 153A for 2015-16 to 2020-21, a scrutiny assessment for 2021-22, and reassessment for 2013-14 and 2014-15. The company says the transfer order under Section 127 was never served on it.

For 2025-26 it filed its return on 2 December 2025, declaring income of ₹12,06,27,060 and paying about ₹3.16 crore in tax, interest and fee. On 19 June 2026 a notice under Section 143(2) was issued, not by the central circle but by an officer at New Delhi who had been notified as the prescribed income-tax authority. The company uploaded audited accounts in response on 29 June, saying it did so without prejudice. The central circle then issued notices under Section 142(1) on 30 July and 1 September 2026, the second one attaching the Delhi notice.

The argument from three words

Section 143(2) says the notice is to be served by “the Assessing Officer or the prescribed income-tax authority, as the case may be”. The company read "as the case may be" as distributive. In its reading, one authority or the other acts depending on the circumstances, and the two do not have interchangeable powers that the Revenue can use as it chooses. Otherwise, it said, the phrase would mean nothing.

The company argued that on 19 June 2026 only the central circle could issue the notice, so the Delhi notice was void. A valid notice under Section 143(2) is the foundation of an assessment under Section 143(3), not a procedural formality. The company also said the time limit for issuing the notice ran out on 30 June 2026, and since the jurisdictional officer had issued none by then, the defect could no longer be fixed.

Along the way the company dropped one point. Its reply to the first Section 142(1) notice had said no Section 143(2) notice had been received in time. It later said that statement was made without checking the e-proceedings record and did not press it.

What the sub-section actually says

The Bench read the provision plainly. It names two authorities: the assessing officer and the prescribed income-tax authority. The Central Board of Direct Taxes' power to designate the second comes from the statute read with Rule 12E of the Income-tax Rules. The company's own affidavit said the Delhi officer had been notified by the Board under that rule. The company did not challenge the notification, did not say it was beyond the Board's power, and did not say it excluded the company's case. Its only point was that the notice should have come from someone else.

The Bench held that the text does not support that point. The sub-section does not say the prescribed authority may act only when the assessing officer is unavailable, and it does not exclude centralised cases. Once the Board has notified an officer under Rule 12E, that officer can issue the notice. Limiting the officer to a fallback role would add words Parliament did not use.

The Revenue relied on the Delhi High Court's decision in Ambience (P) Ltd. v. CIT, and the Bench agreed with it. In that case the Board had authorised a named officer under a notification of 28 May 2022. The Delhi court rejected the argument that the officer lacked jurisdiction, and also two further arguments: that apart from the assessing officer only National Faceless Assessment Centre officers could issue such notices, and that the prescribed authority could serve a notice but not issue one.

The Bench added a broader point. The company had come to court too early. An assessee who receives a notice calling for information is expected to answer it and complete the proceeding before the authority. The writ jurisdiction is not meant to supervise every preliminary step in an assessment, especially on a ground the statutory authorities and appellate forums are fully competent to decide.

Order

The Court held that the 19 June 2026 notice could not be called without jurisdiction on the grounds raised, and that no interference was warranted with the Section 142(1) notices at the show-cause stage. The writ petition was dismissed and the question of law was answered in favour of the Revenue. The company may use its statutory appellate remedies after the assessment is complete. There was no order as to costs. Mr Naga Deepak appeared for the company, and Mr N. Praveen Reddy, Senior Standing Counsel, for the Income Tax Department. The matter was reserved on 22 September and decided on 13 October 2026.