2019 (8) TMI 1764 - AT - Income Tax

Non issuance of notice u/s.143(2) - notice served u/s.143(2) of the Act was by different Assessing Officer having no jurisdiction on the assessee - Whether transfer of case u/s 127 proved? - HELD THAT - Assessment u/s.143(3) of the Act was completed by the ITO, Ward 2(4), Aurangabad whereas, the notice u/s.143(2) of the Act was issued to the assessee by the ITO, Ward 2(1), Aurangabad. As the assessment was completed without issuing the notice u/s.143(2) of the Act by ITO, Ward 2(4), Aurangabad. Moreover, if at all, there was change of jurisdiction from ITO, Ward 2(1), Aurangabad to ITO, Ward 2(4), Aurangabad, provision of section 127 of the Act is absolutely clear that a reasonable opportunity of hearing should be given to the assessee which was not done in the present case. In the present case of the assessee, when one Officer has issued notice u/s.143(2) of the Act, his jurisdiction was transferred and another Officer has been placed for framing assessment. First of all on this transfer of case, the assessee should have been informed and hearing should have been taken place. Secondly, the Officer who ultimately completed the assessment, should have issued notice u/s.143(2) of the Act to the assessee again. In this case, notice has been issued by the ITO, Ward 2(1), Aurangabad and assessment was completed by the ITO, Ward 2(4), Aurangabad which is not permissible within the scope and ambit of the Act. Appeal of the assessee is allowed.

Summary

Issues: Jurisdictional issue regarding notice u/s.143(2) of the Income Tax Act and transfer of case between Assessing Officers.

Analysis:
1. The appeal challenged the assessment order as void-ab-initio due to a jurisdictional issue. The notice u/s.143(2) was served by a different Assessing Officer than the one who completed the assessment u/s.143(3), leading the assessee to claim lack of jurisdiction.

2. The Revenue argued that a change in the incumbent of the office was duly notified to the assessee, and the assessment order was in compliance with the law, even without granting a hearing upon internal transfer of the case between Assessing Officers with concurrent jurisdiction.

3. The assessee contended that the transfer of jurisdiction from one Assessing Officer to another should involve informing the assessee and recording their submissions, as per Section 127 of the Act. The absence of notice u/s.143(2) by the Assessing Officer who completed the assessment rendered the order void-ab-initio.

4. The assessee relied on the Supreme Court's ruling in ACIT & Anr. Vs. Hotel Blue Moon, emphasizing the mandatory requirement of notice u/s.143(2) for the Assessing Officer's jurisdiction.

5. The Tribunal analyzed the case records and arguments, highlighting the discrepancy between the officer issuing the notice u/s.143(2) and the one framing the assessment. It emphasized the necessity of providing a reasonable opportunity of hearing during the transfer of cases, as per Section 127 of the Act.

6. Upholding the importance of notice, service, and hearing in tax jurisprudence, the Tribunal deemed the assessment order null and void-ab-initio due to the lack of compliance with the provisions regarding transfer of jurisdiction and notice issuance.

7. Consequently, the Tribunal set aside the lower authorities' orders and ruled in favor of the assessee, allowing the appeal based on the jurisdictional issue. Other grounds on merits were deemed academic and dismissed.

8. The decision was pronounced on August 6, 2019, in favor of the assessee, declaring the assessment order null and void-ab-initio.