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2022 (5) TMI 1528 - AT - Income TaxValidity of Assessment order passed by the ITO, Ward-2, Rourkela - procedural defect - valid jurisdiction of office who had initiated the proceedings - jurisdiction of the JCIT in respect of transfer of the case from ACIT Rourkela Circle, Rourkela to the ITO Ward-2, Rourkela - HELD THAT - A perusal of the assessment order shows that a notice u/s.143(2) of the Act had originally been issued by the ACIT, Rourkela Circle, Rourkela, who had the jurisdiction to do the assessment of the assessee. Procedural defect occurred when the JCIT, Rourkela Range, Rourkela transferred the file of the assessee from the ACIT, Rourkela Circle, Rourkela to the ITO Ward-2, Rourkela. This procedural defect is incurable and at the point of defect the proceedings would have to be cut. As valid proceeding had been initiated by the ACT, Rourkela Range, Rourkela, the assessment order is being set aside and the assessment is restored to the file of ACIT, Rourkela Circle, Rourkela for completion of the assessment insofar as the proceedings had been validly initiated but the proceedings had been disposed off by an officer having no jurisdiction. This does not mean that proceedings came to an end. The proceedings can validly be completed and finalized by an officer who has valid jurisdiction and who had initiated the proceedings. This view of ours find support from the decision of Shivkumar Agrawal 1990 (7) TMI 105 - ORISSA HIGH COURT . Thus the assessment order passed by the ITO, Ward-2, Rourkela in the case of the assessee for the A.Y.2010-2011 is set aside. Consequently, the order of the ld. CIT(A), who was adjudicated the appeal against the said assessment order passed by the ITO Ward-2, Rourkela, is also set aside.
Issues Involved:
1. Jurisdiction of JCIT to transfer the case. 2. Validity of the assessment order passed by ITO Ward-2, Rourkela. 3. Compliance with Section 124(3) of the IT Act regarding jurisdictional challenges. Issue-Wise Detailed Analysis: 1. Jurisdiction of JCIT to Transfer the Case: The primary legal ground raised by the assessee was that the JCIT, Rourkela Range, Rourkela did not have the power under Section 127 of the IT Act to transfer the case for the assessment year 2010-2011 from the ACIT, Rourkela Circle, Rourkela to the ITO Ward-2, Rourkela. The assessee argued that this transfer was without jurisdiction, rendering the subsequent assessment order and the CIT(A)'s order void ab initio. 2. Validity of the Assessment Order Passed by ITO Ward-2, Rourkela: The assessee submitted that the assessment order passed by the ITO, Ward-2, Rourkela was nullity in law due to the lack of jurisdiction of the JCIT to transfer the case. The ld. CIT-DR contended that the assessee did not challenge the jurisdiction within the time frame provided under Section 124(3) of the Act and that all officers within the same range hold concurrent jurisdiction. The Tribunal noted that while the JCIT issued the transfer order, the procedural defect occurred when the JCIT, who lacked the power to transfer, moved the case from the ACIT to the ITO Ward-2. This procedural defect was deemed incurable, necessitating the setting aside of the assessment order passed by the ITO Ward-2. 3. Compliance with Section 124(3) of the IT Act Regarding Jurisdictional Challenges: The ld. CIT-DR argued that the assessee was precluded from challenging the jurisdiction as it was not done within the stipulated period under Section 124(3) of the Act. The Tribunal, however, observed that the JCIT did not have the power to transfer the case, and this fundamental jurisdictional issue could be raised at any stage, as supported by the Supreme Court's ruling in Saurav Jain and Ors. The Tribunal emphasized that the assessment proceedings initiated by the ACIT, Rourkela Circle, were valid, but the subsequent transfer and completion of the assessment by the ITO Ward-2 were not. Conclusion: The Tribunal concluded that the JCIT, Rourkela Range, did not have the authority to transfer the case from the ACIT, Rourkela Circle, to the ITO Ward-2. Consequently, the assessment order passed by the ITO Ward-2 was set aside due to the procedural defect. The Tribunal restored the assessment proceedings to the file of the ACIT, Rourkela Circle, Rourkela, for de novo assessment in accordance with the law. Result: The appeal of the assessee was partly allowed for statistical purposes, and the assessment order passed by the ITO Ward-2, Rourkela, along with the CIT(A)'s order, was set aside. The case was remanded to the ACIT, Rourkela Circle, for completion of the assessment. Pronouncement: The order was dictated and pronounced in the open court on 31/05/2022.
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