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2018 (11) TMI 1695 - AT - Income TaxTime limit for issue of statutory notice u/s 143(2) - transfer of jurisdiction without passing an order u/s 127 - HELD THAT - AO who issued notice on 30.09.2014 had no jurisdiction to assess the assessee and, therefore, he transferred the case to DCIT-2, Kanpur who though had jurisdiction to assess the assessee but issued notice u/s 143(2) only on 07.09.2015 by which date period for issuance of notice had expired. No order u/s 127 of the Act was passed by the AO to transfer the case from Kanpur-4 to Kanpur-2. AO who had jurisdiction to assess the assessee issued notice u/s 143(2) only on 07.09.2015 which was beyond the prescribed time limit for issuance of such notice. Therefore, the notice issued u/s 143(2) by DCIT, Kanpur-2 beyond the statutory period of time is without jurisdiction and therefore, any order passed in consequence of such notice is also liable to be quashed.
Issues:
1. Admission of additional grounds of appeal based on legal nature. 2. Jurisdictional issue regarding the issuance of notice u/s 143(2) by different Assessing Officers. 3. Compliance with statutory time limit for issuing notice u/s 143(2). 4. Validity of assessment order based on the jurisdictional issue. 5. Transfer of case from one Assessing Officer to another without a proper order u/s 127. Analysis: Issue 1: Admission of additional grounds of appeal based on legal nature The appellant filed an appeal against the order of Ld. CIT (A)-I, Kanpur and sought admission of additional grounds. The Ld. AR argued that these additional grounds were legal in nature, citing the judgment of the Hon’ble Supreme Court in the case of ‘NTPC Ltd. Vs. CIT’. The Tribunal admitted the additional grounds as they were found to be of legal nature, allowing the Ld. AR to proceed with the arguments. Issue 2: Jurisdictional issue regarding the issuance of notice u/s 143(2) by different Assessing Officers The crux of the legal grounds presented by the Ld. AR involved the issuance of notices u/s 143(2) by different Assessing Officers. It was highlighted that the initial notice was issued by DCIT-IV, Kanpur, followed by a subsequent notice from DCIT-2, Kanpur, due to a jurisdictional transfer. The Ld. AR argued that the initial notice was unlawful as DCIT-IV lacked jurisdiction, and the subsequent notice by DCIT-2 was time-barred. The Ld. DR, however, relied on the lower authorities' orders. Issue 3: Compliance with statutory time limit for issuing notice u/s 143(2) The Tribunal noted that the assessment order was passed by DCIT-2, Kanpur, who issued the notice u/s 143(2) on 07.09.2015. However, the statutory time limit for issuing such a notice had expired on 30.09.2014. It was established that the Assessing Officer who issued the initial notice lacked jurisdiction, leading to a transfer to DCIT-2, who then issued a notice beyond the prescribed time limit. Issue 4: Validity of assessment order based on the jurisdictional issue Due to the jurisdictional discrepancies in the issuance of notices, the Tribunal found that the notice issued by DCIT-2, Kanpur, beyond the statutory period was without jurisdiction. Consequently, any order resulting from such a notice was deemed liable to be quashed. The Tribunal agreed with the arguments presented by the Ld. AR, leading to the allowance of additional grounds of appeal. Issue 5: Transfer of case from one Assessing Officer to another without a proper order u/s 127 It was highlighted that no order u/s 127 was passed by the Assessing Officer to transfer the case from Kanpur-IV to Kanpur-II. This lack of proper procedure further contributed to the jurisdictional issues surrounding the assessment process. In conclusion, the Tribunal partly allowed the appeal filed by the assessee based on the jurisdictional discrepancies in the assessment process, ultimately leading to the quashing of the assessment order.
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