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TMI Blog2020 (6) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... t is bad in law.Admittedly, the Assessing Officer has not disposed off these objections by way of a speaking order, as mandated by the Hon ble Supreme Court in the case of G.K.N. Driveshafts (India) Ltd. [ 2002 (11) TMI 7 - SUPREME COURT ] before the completion of assessment. No notice of reopening u/s 148 of the Act was given by the Assessing Officer having jurisdiction over the assessee. No reasons were recorded by the jurisdiction so that he believes that income subject to tax has escaped assessment. The notice issued u/s 148 of the Act was by an AO who had no jurisdiction. Hence it is null and void. It is not a legal notice in the eyes of law. Thus, on this count also, the assessment order passed u/s 143(3) of the Act on 13/12/2016, is bad in law. Addition u/s 68 - AO has not discharged the onus that lay on the revenue to prove that the assessee had earned the income in question. The letter from NSE states the facts which are not controverted by the Assessing Officer. When the NSE states that the assessee has not earned income from derivative transactions, the question of making addition on this ground does not arise. Thus, we delete the addition made. - Decided in favour of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the Assessing Officer, which triggered the re-opening, was factually incorrect and the Assessing Officer should have conducted preliminary verification of the same before recording reasons on incorrect facts that he believes that income subject tax has escaped assessment. He relied on the following case-law for the propositions that under such circumstances, the reopening of assessment is bad in law :- PCIT vs. Meenakshi Overseas P. Ltd. (2017) 395 ITR 677 (Del.) PCIT vs. RMG Polyvinyl (I) Ltd. (2017) 396 ITR 5 (Del.) PCIT vs. G G Pharma India Ltd. (2016) 384 ITR 147 (Del.) 4.1. He further argued that, the letter of the DCIT, Hqs.-1, Kolkata, on behalf of the ld. Pr. CIT-1, Kolkata addressed to the Addl. CIT/Jt. CIT Range-1, Kolkata, dt. 30/31.03.2016, make it clear that this approval letter was issue by the ld. Pr. CIT on 30/31.03.2016 from the stamp of the receipt section, it is clear that the approval was received by the Assessing Officer on 01/04/2016 and whereas notice u/s 148 of the Act was issued on 30/03/2016. This shows that the notice was issued much prior to the receipt of the approval of the ld. Pr. CIT by the Assessing Officer. He argued that the reopening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Market and Currency Derivatives Segment . Thus, he submits that the additions which are made in contravention of this evidence is bad in law. He prayed for relief. 6. The ld. D/R, on the other hand, controverted the arguments of the ld. Counsel for the assessee and submitted that the information was received from ADIT, Inv. Unit-1(3), Ahmedabad, that the assessee company was a beneficiary by way of CCM and that the net benefit was ₹ 15,31,700/-. He submitted that based on this information, the Assessing Officer recorded reasons that he believes that income subject to tax has escaped assessment and thereafter issued notice u/s 148 of the Act, reopening the assessment. He relied on the order of the ld. CIT(A) and submitted that the original return was processed u/s 143(1) of the Act and it is not a case of change of opinion. He relied on the case-law cited by the ld. CIT(A) in his order and submitted that at the stage of recording of reasons, the Assessing Officer need not, with proof, come to a conclusion that income subject to tax has escaped assessment. On the issue of jurisdiction, he submitted that the assessee has not raised this contention before the Assessing Officer an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... code modification details during the period from April 01, 2008 to March 31, 2009 in Capital Market and Currency Derivatives Segment. Please find the client code modification details for Futures Options Segment as Annexure A. 8.2. A perusal of this communication reveals that the reasons recorded by the Assessing Officer that the assessee was beneficiary by way of CCM in derivative transactions was factually incorrect. This shows non application of mind by the I.T.O to the information received by the Assessing Officer from the ADIT (Inv.), Unit-1(3), Ahmedabad. The law requires that the Assessing Officer prima facie applies his mind to the information received, prior to forming a reasonable belief, that income subject to tax has escaped assessment and thereafter record reasons. When reasons are based on wrong facts, which were not verified, then it is a clear case of non-application of mind by the Assessing Officer to the material received. Thus, there is no direct nexus between the tangible material received and the formation of belief that income had escaped assessment and hence the reopening of assessment is bad in law. 8.3. The Hon ble Delhi High Court in the case of Signature H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the Assessing Officer, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the assessee, which must have been tendered along with the return, which was processed under section 143(3).Without forming a prima facie opinion, on the basis of such material, it was not possible for the Assessing Officer to have simply concluded that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries. Thus, the reassessment order was not valid. 9. Applying the propositions of law laid down in the above case-law to the facts of the case on hand, I have to hold that the reopening is bad in law. 10. I also find that the assessee has filed objections against the reopening by way of letters dt. 18/07/2016 and 28/10/2016. Admittedly, the Assessing Officer has not disposed off these objections by way of a speaking order, as mandated by the Hon ble Supreme Court in the case of G.K.N. Driveshafts (India) Ltd. (supra) before the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order without disposing of such objections - Whether Assessing Officer acted without jurisdiction in initiating proceedings for reassessment in spite of nonexistence of required conditions specified under Act and, therefore, reassessment proceedings and consequent reassessment order were to be quashed [Emphasis ours] 10.4. Similar view was taken by the Hon ble Gujarat High Court in the case of Arvind Mills Ltd. v. Assistant Commissioner of Wealth-tax [2004] 141 TAXMAN 210 (GUJ.) 11. As the Assessing Officer has not disposed off the objections raised by the assessee to the reopening of assessment till date. Hence the reassessment order is bad in law. 12. On the issue of jurisdiction, I find that it is admitted fact that the ITO, Ward-4(3), Kolkata, has jurisdiction over the assessee. While so, the reasons for reopening was recorded by ITO Ward-1(1), Kolkata. Notice of reopening of assessment was issued by this officer i.e., ITO Ward-1(1), Kolkata. This Bench of the Tribunal in the case of M/s. Rungta Irrigation Limited vs. ACIT in ITA No. 1224/Kol/2019, order dt. 06/09/2019, under similar circumstances held as follows:- 13. For understanding the legal position with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply. (6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official Gazette,, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income- tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification. 124. Jurisdiction of Assessing Officers (1) Where by virtue of any direction or order issued under sub- section (1) or sub- section (2) of section 120, the Assessing Officer has beenvested with jurisdiction over any area, within the limits of such area, he shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub- section (1) or sub- section (2) of section 120.] 127. Power to transfer cases (1) The Pr. Director General or Director General or Pr. Chief Commissioner or Chief Commissioner or Pr. 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 without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard. 14. A bare reading of the foregoing provisions reveal that an Assessing Officer (AO) has been vested with the jurisdiction by virtue of the directions or orders issued by the Board under sub-section (1) or sub-section (2) of section 120 of the Act. The direction u/s. 120(1) is given by the Board, for the exercise of the powers and performance of the functions by all or any of the Income Tax Authorities, as specified u/s. 116 of the Act. As per sub-section (2) of Section 120 of the Act, the Board may delegate its powers to Income tax authorities as specified in Section 116, for issuing the orders in writing, for the exercise of the powers and performance of the functions by all or any of the other Income Tax Authorities who are subordinate to that authority. We also note that the concurrent jurisdiction can be vested in more than one AO, which is discernible by a conjoint reading of Section 120(5) with Section 120(2) of the Act. Section 124(1) of the Act confers jurisdiction on an AO, by virtue of jurisdiction vested by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the action of an AO is limited to the income accruing or arising or received within the limits of his territorial area as conferred to him (AO) by order under sub-sec. (1) or (2) of sec. 120 of the Act and not otherwise. So, this saving provision will come into play only in the first place the AO is vested with the jurisdiction by an order/direction issued under subsec. (1) or (2) of sec. 120 of the Act. Thus, as per the scheme of the Act, it can be seen that sections 120 and 124 vest jurisdiction on Income Tax Authorities and on AO respectively and, therefore, both sections i.e. sections 120 and 124 of the Act must be read in conjunction and harmoniously to decide the territorial jurisdiction which is prescribed by the direction or orders by the CBDT under sub-sec. (1) or (2) of sec. 120 of the Act. 15. Having taken note of the provisions of Section 120 124, we however find that Section 127 is a separate code of its own. Section 127(1) empowers, the Pr. Director General or Director General or Pr. Chief Commissioner or Chief Commissioner or Pr. Commissioner or Commissioner, as stipulated therein, to transfer any case from one or more AO subordinate to him. In other words, under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) or (2) of section 127 of the Act who had the jurisdiction over an AO who in turn had jurisdiction over the assessee/person/entity, by virtue of direction/order issued under section 120(1) or (2) of the Act, then the entire assessment of the person i.e. pre-transfer and post-transfer as on date of transfer will stand transferred and thereafter for all purposes of the Income Tax Act, the AO of the assessee to whom the case is transferred, will be the Assessing Officer in respect of the said the assessee for pre and post proceedings from the date of transfer. In other words, once transfer order of a case of an assessee is issued u/s. 127 of the Act the effect will be that (i) all the proceedings of the assessee under the Act in respect of any year which may be pending on the date of such order will stand transferred, (ii) all the completed assessment order of the assessee on or before the date of transfer will stand transferred and (iii) all proceedings under the Act in respect of the assessee which may be commenced after the date of such transfer order have to be undertaken by the transferred new AO. 16. In the light of the above discussion, we now examine the facts involved in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been vested with jurisdiction by virtue of the directions or orders issued under sub- section (1) or sub- section (2) of section 120. Sec. 127(4):- The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation: In section 120 and this section, the word case , in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 18. From a plain reading of sub-sec. (5) of sec. 124 of the Act, it is noted that though it is an over-riding provision yet it has inherent limitation as prescribed in law. If one carefully reads sub-section (5) of sec. 124 of the Act, then it will be noted that it starts with the words Notwithstanding anythin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held. CIT-V, Delhi u/s. 127 dated 08.10.2008, the case of the assessee was transferred with immediate effect. Pursuant to such an order, the DCIT, Central Circle Ranchi became the AO who alone had valid jurisdiction over the appellant s case till even he was divested of such jurisdiction by virtue of an order passed u/s. 127(2)by thePr.CIT, Central, Patna dated 03.11.2017 as per which the jurisdiction stood transferred to the ACIT, Central Circle 3(1) Kolkata. We are therefore of the firm opinion that in June 2016 when the notice u/s 143(2) was issued, it was the ACIT, Central Circle 1, Ranchi alone enjoyed sole jurisdiction over the appellant s case and in that view of the matter it was only this AO who could have issued a valid notice u/s 143(2) for the relevant AY 2015-16. We therefore have no quarrel with the proposition put forth by the ld. CIT, DR that when the ACIT, Central Circle 3(1), Kolkata received the case records in terms of the order u/s 127(2) dated 03.11.2017, he had no obligation to issue a fresh notice u/s 143(2) because he could have continued with the assessment proceedings from the stage at which his predecessor would have left. However this legal proposition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by sub-section (3) of sec. 124 of the Act. We however note that sub-section (3) of section 124 of the Act will come into play only when a question arises as to whether an AO has jurisdiction to assess any person u/s. 124 of the Act and the AO derives his powers from the direction or order issued by CBDT and/or authorities under sub-section (1) or (2) of sec. 120 of the Act respectively. It is true that when a question of jurisdiction arises in the event an AO assumes jurisdiction u/s. 124 of the Act by virtue of the jurisdiction vested by direction or order issued by CBDT and/or other authorities under sub-section (1) or (2) of sec. 120 of the Act respectively, then assessee is estopped from raising an objection to the jurisdiction, after the time period prescribed under sub-section (3) of sec. 124 of the Act lapses. This however is not the fact of the appellant s case. Admittedly the AO at Delhi who had enjoyed jurisdiction u/s. 124 of the Act by virtue of direction or order issued by CBDT and/or authorities under sub-section (1) or (2) of section 120 of the Act was legally divested of his jurisdiction over the appellant s case by virtue of the order u/s. 127 of the Act dated 08.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1, Ranchi succeeded to the jurisdiction of the assessee and the jurisdiction continued to vest in him (AO Ranchi) till it was legally taken away by order u/s. 127 dated 03.11.2017 by Pr. CIT, Central Patna and transferred to ACIT, Central Circle-3(l), Kolkata. Therefore, as per the discussions (supra) there was no necessity for the assessee to have questioned the jurisdiction of AO at Delhi, as envisaged under subsec. (3) of sec. 124 of the Act since in the first place AO at Delhi legally enjoyed jurisdiction u/s. 124 of the Act over the assessee s case. In our considered opinion Section 124(3) of the Act does not in any way help the Department to justify the action of AO at New Delhi in issuing under Section 143(2) to the assessee, which is an action without jurisdiction. So the challenge raised by the Ld CIT, DR fails. Therefore, we do not find any merit in the contention of the Ld. CIT, DR on this score. 22. During the course of hearing before us, the Ld. CIT, DR took pains to convince us that there are overlapping/concurrent jurisdiction in respect to the territorial and pecuniary jurisdiction of the AO and, therefore, the AO having territorial jurisdiction over the assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing to interfere in the assessment order passed by ITO, Wd-4(1), Kolkata dated 21st May, 2010 (AY 2008-09). 6. 26th March, 2013 CIT-II, Kolkata passed the order u/s. 263 setting aside the order of ITO, Wad-4(1) dated 21st May, 2010 for AY 2008-09. 23. The aforesaid order of CIT-II, Kolkata was challenged by the assessee [M/s Ramshila,] objecting to the jurisdiction of CIT-II, Kolkata who had issued Show Cause Notice u/s. 263 and thereafter passed order u/s. 263 dated 26th March, 2013 for AY 2008-09. The validity of the said revision order was upheld by this Tribunal in favour of the department, by observing as under: The definition of case for the purpose of sec.127 of the Act as given in the Explanation below sec.127 does not debar the Commissioner from transferring only a particular case, more so when the request for transfer was made in specific circumstances, such as proper co-ordination of search cases.The Commissioner transferring jurisdiction has power to transfer all proceedings under the Act, which are pending, completed or which may be commenced after the date of transfer, but that does not mean that he does not have powers to restrict his order of transfer only to a par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x remained unchanged. In other words, it is the jurisdiction of the trial court, which was changed. The jurisdiction of the appellate authority remained unchanged. Therefore, the order under challenge was validly passed by the Commissioner of Income-tax. 26. Per contra; in that case, the assessee contended that as per the Explanation appended to section 127 of the Act that the expression transfer of a case would mean all pending and future proceedings and in that case it was pointed out that Tribunal also agreed that only CIT, Central, Kolkata had jurisdiction over the pending cases as well as future cases. The Ld. AR of the assessee pleaded before the Hon ble High Court as under: Mr.Poddar, learned senior advocate, drew our attention to an order dated 3rd September, 2012 appearing at page 584 of the additional papers filed by him, which is an order passed under section 127 of the Income Tax Act by no other than the CIT, Kolkata-II, Kolkata, who passed the impugned order under Section 263, transferring the jurisdiction over five assessees including the appellant before us to the ACIT/DCIT, Central Circle XIX, Kolkata in the interest of revenue for better coordination, effective inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, it cannot be done. Negligence can neither be invoked as an alibi, nor can cure the infirmity or illegality, so as to rob the accused of his right under the rules. What can be done only by at least two learned Judges cannot be done by one learned Judge. Even if the decision is right on merits, it is by a forum which is lacking in competence with regard to the subject matter. Even a right decision by a wrong forum is no decision. It is non-existent in the eye of law. And hence a nullity. The judgment under appeal is therefore no judgment in the eye of law. This Court in State of Madhya Pradsh v. Dewadas (1982) 1 SCC 552 has taken a view which reinforces our view. We, therefore, allow the appeal, set aside the order passed by the learned Single Judge, and send the matter back to the High Court for being placed before a Division Bench of the High Court, which will afford reasonable opportunity of hearing to both the sides and dispose it of in accordance with law, expeditiously. He also relied upon a Division Bench judgement of this Court in the case of ITO Vs/. Ashoke Glass Works reported in (1980) 125 ITR491(Cal) wherein the following view was expressed (page 505): So when the jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en correct an obvious clerical mistake. See Mordue v Palmer, 6 Ch. App.22; Henfree v Bromley, 6 East, 309; Brooke v Mitchell, 6 M. W.473. See now Arbitration Act 1950 (c.27).s.17. Reference may also be made to the judgement in the case of Re V.G.M. Holdings, Ltd. 1941 (3) All England Law Reports, 417 wherein the following views were expressed: I think that it would be a strange position if a judge were at liberty to reconsider his decision and grant a stay of execution after he had made an order refusing it. I think that, when a judge has made an order such as that in the present case, the only remedy for the respondent, if he is dissatisfied with the order, is to go to the Court of Appeal A special bench in the case of Komal Chand versus The State of Madhya Pradesh, reported in AIR 1966 Madhya Pradesh 20 opined in this regard as follows: Section 35 of the Stamp Act, inter alia, says that no instrument chargeable with duty shall be registered by any public officer unless such instrument is duly stamped. This provision thus casts a duty on the registering officer to examine whether an instrument presented for registration is duly stamped. If, as section 36 says, an instrument charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub- In the present case, the Sub-Registrar purported to act under paragraph 232 of the Registration Manual when he made a report to the Collector that the Takseemnama was not duly stamped. But on reading paragraphs 231 and 232 it is clear that they do not say that after a document is admitted to registration, the registering officer can make a report to the Collector that it was not sufficiently stamped on the other hand, paragraph 231 expressly lays down a direction that before taking any further action, that is to say, in the matter of registration, the registering officer must see that the document is duly stamped. The words after registering the document occurring in paragraph 232 obviously refer to the entry of the document in the Register maintained of documents presented for registration. They do not mean that the registering officer can make a report about insufficiency of stamp after the document has been admitted to registration. In the case of SBI versus S.N. Goyal reported in 2009 (8) SCC92the following views were expressed: It is true that once an authority exercising quasi-judicial power takes a final decision, it cannot review its decision unless the relevant statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nals fix a day for pronouncement and pronounce their orders on the day fixed, many quasi-judicial authorities do not pronounce their orders. Some publish or notify their orders. Some prepare and sign the orders and communicate the same to the party concerned. A quasi-judicial authority will become functus officio only when its order is pronounced, or published/notified or communicated (put in the course of transmission) to the party concerned. When an order is made in an office noting in a file but is not pronounced, published or communicated, nothing prevents the authority from correcting it or altering it for valid reasons. But once the order is pronounced or published or notified or communicated, the authority will become functus officio. The order dated 18-1-1995 made on an office note, was neither pronounced, nor published/notified nor communicated. Therefore, it cannot be said that the appointing authority became functus officio when it signed the note dated 18-1-1995. Applying the law laid down in S.N. Goyal s (supra) case we are reinforced, in our opinion that the CIT Kolkata II, Kolkata had become functus officio prior to 18th March, 2013 because the transferee assessing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O, Delhi transferred the case records pertaining to reassessment for the AY 2003-04 to the charge of ITO, Kolkata. Taking recourse to provisions of Section 124(5), ITO Kolkata continued with the reassessment proceedings from the stage at which the case records were transferred from Delhi and thereafter passed the order u/s 147/143(3).Before this Tribunal, the assessee challenged validity of the proceedings and consequent order u/s 143(3)/147 on the ground that the notice u/s 148 was issued by an officer who did not hold valid jurisdiction over the assessee s case. The Tribunal upholding the assessee s objection, observed as under: 3. Briefly stated facts are that the assessee filed its return of income at Delhi in the office of ITO, Ward-3(3) Delhi on 02-12-2003. Subsequently, notice u/s. 148 of the Act was issued on 25-03-2010 with the permission of Addl. CIT, Range-3, New Delhi. But, in the meantime, CIT-1, Delhi passed an order u/s. 127(2) transferring the jurisdiction of this case vide its order No.CIT-1/Cent/09-10/1874 dated 04-01-2010 from ITO, Ward3(3), New Delhi to ITO, Ward-6(1), Kolkata. The assessee claimed before the AO as well as before CIT(A) that ITO, Ward-3(3), New ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransferred to the transferee AO, the jurisdiction lies with the Assessing Officer holding the charge over the case and all action as per the law is required to be initiated or taken by that jurisdictional AO only. Hence the jurisdictional AO at Delhi has rightly re-opened the case on approval from higher authority and issued notice u/s 148. On receiving the records on 30-11-10 the undersigned disposed off the case u/s. 147/144 as per the law after offering reasonable opportunities of being heard to the assessee. During the appellate proceedings on 16-02-2010, CIT(A) recorded following order sheet entry: Mr. Miraj D. Shah, Advocate attended the proceedings filed written submission of one paper along with the copy of reasons recorded, order sheet of 147 proceedings given. The appellant has submitted that file was transferred to Kolkata on 4-1-10 by order u/s 127. Copies of order u/s 127 and section 151 approved by Addl. CIT to be submitted tomorrow. The issue of jurisdiction of Delhi A.O. was not taken before the A.O. who completed the assessment. Adj. to 20-2-12. 4.CIT(A) discussed the issue and observed in paras 8 and 9 as under: 8. The appellant submitted during the appellate proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer or within the period of one month as is prescribed under section 124, the same could not be challenged subsequently. 18. The order u/s 127 was passed by Ld. CIT, Delhi-l, on 04-01-10, but before the time the records were not transferred to the transferee Assessing Officer, the jurisdiction lies with the Assessing Officer holding the charge over the case and all action as per the law is required to be initiated or taken by that jurisdictional Assessing Officer only as per the submissions of current Assessing Officer i.e. Income-tax Officer, Ward 6(1), Kolkata and he further submitted that the jurisdictional Assessing Officer at Delhi has rightly re-opened the case after due approval from his jurisdictional Joint commissioner of Income-tax and issued notice u/s 148 before actually transferring the case. 19. The appellant never raised the question of jurisdiction before the Assessing Officer either at New Delhi when the notice u/s 148 was issued or at the time of assessment with the Assessing officer at Kolkata. There was a possibility to the Assessing Officer at New Delhi to get the records transferred immediately to Kolkata and a fresh notice may have been issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by that jurisdiction AO only. Even the CIT(A) noted that the assessee has never objected regarding the jurisdiction of issuance of notice u/s. 148 of the Act by the AO of New Delhi or initiation/continuation of assessment proceedings by the ITO, Ward-6(1), Kolkata before the AO during the assessment proceedings. Whether such a plea can be accepted or not? Before us, Ld. Sr. DR heavily relied on the decision of Hon'ble Punjab Haryana High Court in the case of SubhashChander v. CIT [2008] 166 Taxman 307 wherein the non-objection as per section 124(2) read with section 124(4) of the Act, the jurisdiction assumed by AO was held to be valid. Further, there was reliance by Sr. DR on the case law of Hon'ble Allahabad High Court in the case of CIT v. British India Corpn. Ltd. [2011] 337 ITR 64 [2012] 20 taxmann.com 446, wherein assumption of jurisdiction, by AO for assessment, u/s. 124 of the Act that when the ITO had jurisdiction when assessment proceedings commenced and a draft assessment order was submitted to IAC but due to subsequent change in jurisdiction, unless the same brought to the notice of the authority concerned, the assessment would not be vitiated. We are wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss any specific provision is made in respect of any pending proceedings. Such consequence is inevitable when there is withdrawal of jurisdiction, which means automatic extinction of jurisdiction of one authority with simultaneous conferment of jurisdiction on another authority under the Act in respect of all pending and future proceedings. Explanation to section 127 of the Act makes it clear that the word case in relation to any person whose name is specified in the order of transfer means all proceedings under the Act in respect of any year which may be pending on the date of the transfer, and also includes all proceedings under the Act which may be commenced after the date of transfer in respect of any year. The word case is thus used in a comprehensive sense of including both pending proceedings and proceedings to be instituted in the future. Consequently, an order of transfer can be validly made even if there be no proceedings pending for assessment of tax and the purpose of the transfer may simply be that all future proceedings are to take place before the officer to whom the case of the assessee is transferred. 8. In view of the above principle regarding jurisdiction and fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred the powers to assess the petitioner from ACIT-10(1) Mumbai to DCIT, Circle-1(2) Pune. Thus, from 22.11.2011 ACIT-10(1) Mumbai did not have any power to assess or reassess the petitioner. 5. It is not in dispute that on transfer of the jurisdiction from Mumbai to Pune, the Additional CIT, (TP) Pune has assumed jurisdiction and accordingly issued a notice dated 29.03.2012 to the Petitioner under Section 92CA of the Act relating to Assessment year 2009-2010. 6. However, the ACIT-10(1) Mumbai has issued the impugned notice on 30.03.2012 under Section 14 8 of the Act with a view to reopen the assessment for A.Y. 2005-06. The assessee by its letter dated 24.04.2012 objected to the impugned notice by specifically stating that pursuant to the order of CIT dated 22.11.2011, the ACIT-10(1) would have no locus standi or jurisdiction to issue the impugned notice dated 30.03.2012. As there was no reply, the present writ petition is filed inter alia on the ground that once the jurisdiction to assess/reassess the petitioner vested in the ACIT-10(1) is divested by the order of the CIT-10 Mumbai dated 22.11.2011, the ACIT-10(1) Mumbai would cease to have power to assess or reassess the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the Revenue does not dispute that the corrigendum order was passed without issuing notice and without hearing the petitioner and further admits that the said corrigendum order was not served upon the petitioner till date and that he has tendered a copy of the said corrigendum order upon the counsel for the petitioner today in Court. However, he submits that once the corrigendum order was passed by the CIT-10 Mumbai on 27.03.2012 the ACIT-10(1) Mumbai was justified in issuing the impugned notice dated 30.03.2012. 14. In our opinion, the conduct of ACIT-10(1) Mumbai as well as CIT-10 Mumbai is highly deplorable. Once the jurisdiction to assess the petitioner was transferred by the CIT-10 Mumbai from ACIT-10(1) Mumbai to DCIT Circle-1(2) Pune by order dated 22.11.2011 it was totally improper on the part of ACIT-10(1) Mumbai to request the CIT-10, Mumbai to pass a corrigendum order with a view to circumvent the jurisdictional issue. Making such a request on the part of ACIT-10(1) Mumbai to the CIT-10 Mumbai in our opinion, was in gross abuse of the process of law. If there was any time barring issue, the ACIT-10(1) Mumbai ought to have asked his counterpart at Pune to whom the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the legally non-existent corrigendum order dated 27.03.2012 cannot be sustained. 32. Before us the ld. CIT, DR supported the AO s order by placing strong reliance on the decisions of the Hon ble Delhi High Court in the cases of Abhishek Jain VsITO (supra) and SS Ahluwalia (supra). As observed earlier, these decisions were rendered in totally different factual context and therefore the proposition laid down in these decisions cannot be applied. In the case of Abhishek Jain (supra), the AO at Noida had issued notice u/s 148 on the basis of cash deposits made in ICICI Bank, Noida. In that case the fact that the assessee was regularly assessed in Delhi was not intimated to the AO at Noida nor did the assessee mention his PAN with the ICICI Bank. Even the assessee s address available with the bank was that of Noida. In this case it was not brought on record by the assessee that his case was transferred to Delhi by virtue of an order u/s 127 passed by the competent authority under whom the AO at Noida was functioning. The Court further found that it was only after the period of limitation prescribed in Section 149 expired on 31st March, 2016, that the assessee intimated the AO a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Hon ble Court must be read in the context of the facts and the issues before the Hon ble Court for consideration. The Hon ble Supreme Court in the case of CIT Vs Sun Engineering Works (P) Ltd (198 ITR 297) has observed as follows: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a latter case, the Courts must carefully try to ascertain the true principle laid down by the decision of the Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by the Court, to support their proceedings. 35. Coming back to the admitted facts in the present case, we hold that the ACIT, Central Circle-3(1), Kolkata framed the assessment order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l leave under Article 136, and the same was granted, and hence this appeal. 13. The only question that arises for our consideration in this batch of appeals is: whether service of notice on the assessee under Section 143(2) within the prescribed period of time is a prerequisite for framing the block assessment under Chapter XIV-B of the Income Tax Act, 1961? 27. The case of the Revenue is that the expression so far as may be, apply indicates that it is not expected to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the Revenue, since we do not see any reason to restrict the scope and meaning of the expression so far as may be, apply . In our view, where the assessing officer in repudiation of the return filed under Section 158-BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143. 6. The question, however, remains whether Section 292BB which came into effect on and from 01.04.2008 has effected any change. Said Section 292BB is to the following effect:- 292BB. Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. 10. Since the facts on record are clear that no notice under Section 143(2) of the Act was ever issued by the Department, the findings rendered. by the High Court and the Tribunal and the conclusion arrived at were correct. We, therefore, see no reason to take a different view in the matter. 36. For the reasons set out above therefore, we uphold the objections raised by the appellant against the validity of the impugned order u/s 143(3) for AY 2015-16. We accordingly hold that since in the present case no valid notice u/s 143(2) was issued by the AO who held jurisdiction over the case of the appellant, the consequent order passed u/s 143(3) dated 29.12.2017 was legally unsustainable and therefore is null in the eyes of law and therefore quashed. The assessee accordingly succeeds on the preliminary legal issue raised before us. 13. In this case no notice o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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