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2022 (8) TMI 515 - AT - Income TaxJurisdiction of AO to issue notice u/s 143(2) - notice u/s 143(2) was issued by one AO and the assessment has been completed by another AO - HELD THAT - As notice u/s 143(2) has been issued by one AO and the assessment has been concluded by an another AO, which means that the AO who issued the notice under section 143(2) did not complete the assessment and, therefore, the argument with regard to concurrent jurisdiction is not tenable. As a natural corollary, therefore, the order passed by the AO is also not tenable in view of the fact that the notice under section 143(2) was issued by one AO and the assessment has been completed by another AO. Transfer of case u/s 127 - Power to transfer cases is contained in section 127 and the analysis of above provisions, as contained in section 127(1), demonstrates that the Principal Director General/ Principal Chief Commissioner or Chief Commissioner or Commissioner, may, after recording his reason for doing so, transfer any case from one or more Assessing Officers to another Assessing Officers subordinate to them. Sub section (4) of Section 127 empowers such Officer to transfer a case under subsection (1) or (2) at any stage of the proceedings and any such transfer shall not render necessary reissuance of any notice already issued by the Assessing Officer from whom the case is transferred. The provisions of sub-section (4) of section 127 will be applicable only when there is an order under section 127 of the Act. Since the Department was not able to show any order passed under section 127 of the Act, this argument of the ld. Counsel for the assessee is also accepted. Grounds no. 1 to 3 taken by the assessee are allowed. As such, the assessment order is held to be void ab initio and is quashed. Nothing further thus survives for decision and the rest of the Grounds are rejected as infructuous.
Issues Involved:
1. Validity of the assessment order due to lack of proper jurisdiction. 2. Transfer of jurisdiction without an order under section 127. 3. Addition of Rs. 27,01,500/- under section 69A of the Income Tax Act. 4. Violation of principles of natural justice. Detailed Analysis: 1. Validity of the Assessment Order Due to Lack of Proper Jurisdiction: The appellant contended that the notice under section 143(2) was issued by the ACIT, Circle-1, Bareilly, who did not have jurisdiction over the assessee. The jurisdiction was transferred to ITO, Ward 1(1), Bareilly, without issuing a new notice under section 143(2). The Tribunal found that the notice under section 143(2) was indeed issued by an officer without jurisdiction, making the assessment order invalid. The Tribunal cited the case of 'Valvoline Cummins Ltd. vs. Dy. CIT' to support the argument that the same authority who initiates the proceedings must conclude them. 2. Transfer of Jurisdiction Without an Order Under Section 127: The appellant argued that no order under section 127 was passed to transfer the case from ACIT, Circle-1, Bareilly to ITO, Ward 1(1), Bareilly. The Tribunal agreed, stating that without an order under section 127, the transfer of jurisdiction was invalid. The Tribunal emphasized that section 127(4) provisions apply only when there is an order under section 127, which was not present in this case. 3. Addition of Rs. 27,01,500/- Under Section 69A of the Income Tax Act: The appellant challenged the addition of Rs. 27,01,500/- made under section 69A, arguing that sufficient evidence was provided to explain the cash deposits. The Tribunal did not address this issue in detail as the assessment order was already deemed void due to jurisdictional errors. 4. Violation of Principles of Natural Justice: The appellant claimed that the assessment order was passed in violation of the principles of natural justice, without providing an adequate opportunity to be heard. The Tribunal did not need to delve into this issue, as the assessment order was quashed on jurisdictional grounds. Conclusion: The Tribunal quashed the assessment order, deeming it void ab initio due to the lack of proper jurisdiction and the absence of an order under section 127 for transferring the case. Consequently, the other grounds raised by the appellant became infructuous. The appeal was allowed, and the assessment order dated 20.12.2019 was set aside.
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