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TMI Blog2019 (4) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... t the issuance u/s 143(2) by the Dy. CIT (IT)-1, Hyderabad is without any authority and also beyond the period of six months from the date of filing of returns and therefore, is barred by limitation and hence, not sustainable and the consequent Assessment order passed by the Asstt. CIT (IT) Hyderabad is void ab initio. - ITA No.947/Hyd/2016 - - - Dated:- 18-4-2019 - Smt. P. Madhavi Devi, Judicial Member And Shri S.Rifaur Rahman, Accountant Member For the Assessee : Shri Ajay Gandhi For the Revenue : Shri Nilanjan Dey, DR ORDER PER SMT. P. MADHAVI DEVI, J.M. This is assessee s appeal for the A.Y 2011-12 against the order of the CIT (A)-10, Hyderabad, dated 24.03.2016. 2. Brief facts of the case are that the assessee, an individual, filed his return of income for the A.Y 2011-12 on 6.4.2012 admitting total income of ₹ 71,18,403/-. The return of income was processed u/s 143(1) and subsequently, the case was selected for scrutiny under CASS. Thereafter, the Additional CIT, Kurnool, vide letter dated 28.10.2013 transferred the files to Addl. CIT (IT-II) Hyder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t term capital gains towards discrepancies as per Form 26AS and the return of income. 5. The Commissioner of Income Tax has erred in sustaining the disallowed claim pertaining to set off of short term capital loss of ₹ 13,58,290. 6. The Commissioner of Income Tax has erred in sustaining the addition of ₹ 24,673 under the head 'Income from House Property'. 7. The Commissioner of Income Tax has erred in sustaining the addition of ₹ 54,00,000 as unexplained money uls 69A of the Income Tax Act. 8. The Commissioner of Income Tax has erred in sustaining the addition of Rs.l,74,400 as unexplained expenditure uls 69C of the Income Tax Act. 9. The Commissioner of Income Tax has erred in sustaining disallowance of deduction claimed u/s 80C of ₹ 20,296. 10. The Commissioner of Income Tax has erred in upholding the assessment of total income at ₹ 1,41,82,750. 11. The Commissioner of Income Tax has erred in upholding the demand raised of ₹ 27,91,360. 12. The Commissioner of Income Tax has erred in upho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has also filed a paper book supporting his contentions. 5. The learned DR, on the other hand, supported the orders of the Asstt. DIT (IT) Hyderabad and submitted that he has exercised his jurisdiction correctly. The written submission of the Dy.CIT-2 (IT) dated 13.06.2018 addressed to the Sr. AR, ITAT is also filed before us. In the said letter, it is stated that the first notice for scrutiny i.e. u/s 143(2) was issued by the Dy. CIT, Kurnool on 6.8.2013 and thereafter, it was found from the return of income that the assessee is an NRI and that the jurisdiction of the assessee vests at ITO-I Hyderabad and hence the Dy.CIT, Kurnool transferred the case to ITO-I Hyderabad on 26.10.2013 i.e. even before the commencement of the case. It is submitted therein that the jurisdiction over foreign entity including NRIs vested only with the AO attached to International Taxation Wing of the I.T. Deptt. and at the relevant point of time of the assessment proceedings such I.T. Officers were situated only at Hyderabad, Vizag, Kurnool and Nellore and prior to bifurcation of the States during 2014, the jurisdiction with regard to the ITO Kurnool was vested only at Hyderabad. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d responsible for the assessee s failures to apply for PAN migration for correct mapping of PAN consequent to change of his residence which was also in the case of the assessee. He relied upon the provisions of section 139A of the Act which casts obligation on every person who has not been allotted a PAN to apply for a PAN to the AO for the allotment of a PAN. He submitted that since the AO at Kurnool noticed that the assessee is a non-resident and that he should be assessed by the Dy.CIT (IT) Hyderabad, he transferred the records of the assessee to the ITO (IT) at Hyderabad for continuation of proceedings initiated by issuance of notice u/s 143(2) dated 6.8.2013. He submitted that the ACIT (IT) Hyderabad, issued another notice u/s 143(2) out of abundant caution and is only to be understood as an opportunity to the assessee, to explain his return of income before him, in continuation of proceedings triggered by issuance and service of notice dated 6.8.2013. He therefore, vehemently argued that this is not the case where there is a change in the jurisdiction of the AO and according to him, it is only a transfer of record to the correct jurisdictional AO. 7. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in conformity with the intent and purpose of the Act. According to the assessee, there is a change of jurisdiction from the AO at Kurnool to the AO at Hyderabad and as per the provisions of section 127(1) of the Act, it is only the Principal Director General or the Pr. CIT or Chief Commissioner of Income Tax or the Pr. CIT, who may, after giving the assessee a reasonable opportunity of being heard in the matter for doing so, transfer any case from one or more than one AO subordinate to him to other AO or AOs also subordinate to him. He submitted that the contentions of the learned DR that sub-section 3 of section 127 is applicable to the assessee s case is without any substance. Before applying the provisions of section 127 of the Act, we deem it proper to re-produce the same hereunder: Section 127 of the I.T. Act. (1) The Director General or Chief Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs under this Act which may be commenced after the date of such order or direction in respect of any year . 10. We find that u/sub-section 3 of section 127, it is provided that provisions of sub-section 1 2 are not applicable and no such opportunity is to be given to the assessee, where the transfer is from any AO, to any other AO where the Offices of such officers are situated in the same city, locality or place. We find that the AO at Kurnool had transferred the file to the AO at Hyderabad and therefore, even if they are both under the jurisdiction of the same Pr. CIT at Hyderabad, the notice u/s 127(1) has to be given to the assessee and it is only the Pr. Director General or the Pr. CIT or Pr. CIT who can transfer the case u/s 127 of the Act. No such procedure has been followed by the Deptt. Therefore, we are of the opinion that the issuance u/s 143(2) by the Dy. CIT (IT)-1, Hyderabad is without any authority and also beyond the period of six months from the date of filing of returns and therefore, is barred by limitation and hence, not sustainable and the consequent Assessment order passed by the Asstt. CIT (IT) Hyderabad is void ab initio. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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