2017 (7) TMI 861 - AT - Income Tax

Transfer of case from one Assessing Officer to another Assessing Officer - jurisdiction acquired by the JCIT - Held that - As u/s 120 the power vests with the Board i.e. Central Board of Direct Taxes but does not vest with the Joint Commissioner of Income Tax (JCIT) as in the present case. The JCIT has acquired the powers u/s 120 on himself without any order of the CBDT or any order of the Chief Commissioner or Pr. Commissioner of Income Tax u/s 127 of the Act. Accordingly the assessee correctly prayed that the jurisdiction acquired by the JCIT on him is extra jurisdictional and therefore the assessment order passed by the Assessing Officer was ab in initio void and deserves to be quashed. As in the case of Mega Corporation Ltd. vs. Addl.CIT Range 6, New Delhi reported in (2015 (10) TMI 2365 - ITAT DELHI) whereby the Delhi Bench of the Tribunal held that once authorities lack jurisdiction then it is well settled it cannot participate even on elapse of time. Thus, in the absence of jurisdiction, order made by Addl.CIT is a nullity. Further provisions contained in section 124 is of no help to the Revenue in as much as here is a case where the Addl.CIT lacks jurisdiction and is not a case of exercise of jurisdiction of territorial jurisdiction. The assessment has to be completed by the authority who has initiated the proceedings for making assessment and any another authority and take over the proceedings only after a proper order of transfer u/s 127(1) or 127 (2) of the proceedings. The Revenue has not brought any order for transfer of proceedings from Dy. CIT Circle -6, New Delhi to the Addl. CIT, Range-6, New Delhi and therefore this is quite evident that the Addl. CIT Range 6 took over the assessment proceedings without there being an order u/s 127(1). - Decided in favour of assessee.

Summary

Issues:
1. Jurisdictional issue regarding the notice issued under section 148 of the Act for the transfer of the case from one Assessing Officer to another Assessing Officer.

Detailed Analysis:
The appeal before the Appellate Tribunal ITAT Delhi arose from the order of the ld. CIT(A), Rewari for the assessment year 2007-08. The assessee raised multiple grounds of appeal challenging the assessment order. The primary contention was related to the jurisdictional issue concerning the transfer of the case from one Assessing Officer to another. The counsel for the assessee argued that the case was transferred without providing a reasonable opportunity for the assessee to be heard. The provisions of sections 120(1), 120(2), and 127(1) of the Income Tax Act were cited to support the argument. It was highlighted that the transfer was done without proper authorization, rendering the assessment order passed by the Assessing Officer without jurisdiction.

The Tribunal, after hearing both parties and examining the relevant provisions of the Act along with the facts on record, concluded that the assessment order passed by the Assessing Officer was without jurisdiction. The arguments put forth by the counsel for the assessee were found convincing, leading to the decision that the transfer of the case lacked proper authorization and was therefore deemed void ab initio. The Tribunal also referred to a previous decision by the ITAT "D" Bench in a similar case, emphasizing that lack of jurisdiction renders any order null and void. The Tribunal held that the assessment made by the Assessing Officer was illegal and without jurisdiction, ultimately quashing the assessment order.

In light of the jurisdictional issue and the lack of proper authorization for the transfer of the case, the Tribunal allowed the appeal of the assessee, thereby setting aside the assessment order dated 22.3.2013 passed by the Assessing Officer. The decision was pronounced in open court on 10.03.2017, providing relief to the assessee based on the jurisdictional irregularities identified in the case.