2022 (11) TMI 1383 - HC - Income Tax

Revision u/s 263 - validity of order passed by AO - Lack of jurisdiction - Whether the order passed by AO/ITO Ward-5 (III) Kolkata in pursuance of the direction issued u/s 263 is devoid of jurisdiction? - HELD THAT - When it is an admitted fact that the Assessing Officer namely the Income Tax Officer Ward 5(III) was divested of the jurisdiction on or after 28th August 2012 the order passed under Section 263 of the Act could not have been given effect to. Tribunal has assigned the following reason which in our opinion is both factually and legally correct which says once the order u/s 127(2) was passed by the Ld. CIT-II Kolkata unconditionally transferring the jurisdiction over the appellant s case to the charge of DCIT/ACIT Central Circle-XVII Kolkata; then by virtue of such an order the jurisdiction enjoyed by ITO Ward-5(3) Kolkata in terms of Section 124 read with Section 120(1) (2) stood abrogated.No substantial question of law arising for consideration in this appeal.

Summary

Issues: Jurisdiction of Assessing Officer under Section 263 of the Income Tax Act

Analysis:
The High Court of Calcutta heard an appeal by the revenue under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal for the assessment year 2008-09. The main issue revolved around whether the order passed by the Assessing Officer, Income Tax Officer, Ward-5(III), Kolkata, pursuant to a direction under Section 263 of the Act, was devoid of jurisdiction. The Court noted that the substantial questions of law suggested by the revenue were irrelevant and reframed the question to focus on the jurisdiction of the Assessing Officer.

Upon reviewing the Tribunal's order, the Court found that the Tribunal had provided detailed reasons to support its conclusion that the Assessing Officer's order lacked jurisdiction. The Tribunal's analysis highlighted the transfer of jurisdiction from the ITO, Ward-5(III), Kolkata to DCIT, Central Circle-XVII, Kolkata, as per an order dated 28th August, 2012, issued by the Ld. CIT-II, Kolkata. This transfer of jurisdiction rendered the order passed under Section 263 ineffective, as the Assessing Officer no longer had the requisite authority.

The Court agreed with the Tribunal's findings, stating that once the jurisdiction was unconditionally transferred to another authority, the Assessing Officer's jurisdiction under Section 124 read with Section 120(1) & (2) was nullified. As a result, the Court concluded that there was no substantial question of law to consider in the appeal. Consequently, the appeal was dismissed, and the application for stay was also rejected.

In summary, the judgment focused on the crucial issue of jurisdiction concerning the Assessing Officer's authority under Section 263 of the Income Tax Act. The Court upheld the Tribunal's decision, emphasizing the legal implications of the jurisdiction transfer and the impact on the validity of the Assessing Officer's actions. The judgment clarified the legal position and provided a detailed analysis of the factual and legal aspects surrounding the jurisdictional issue, leading to the dismissal of the appeal.