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TMI Blog2024 (7) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... fore me, which, thus, are left open. Appeal of the assessee is allowed. - SHRI RAVISH SOOD, JUDICIAL MEMBER For the Assessee : S/shri Sunil Kumar Agrawal Vimal Kumar Agrawal, CAs For the Revenue : Shri Satya Prakash Sharma, Sr. DR ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 31.05.2023, which in turn arises from the order passed by the A.O. under Sec. 143(3) of the Income-tax Act, 1961 (in short the Act ) dated 27.12.2017 for the assessment year 2015-16. The assessee has assailed the impugned order on the following grounds of appeal: 1. On the facts and circumstances of the case and in law, ld. CIT(A) has erred in sustaining addition of Rs. 40,08,521/- u/s. 68 being amount credited/utilized for purchase of property. 2. The appellant craves leave to add, urge, alter, modify or withdraw any ground/s before or at the time of hearing Also, the assessee has raised additional grounds of appeal which reads as under: Additional Gr. No. 1 1. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in sustaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 143(3), is liable-to be quashed Additional Gr. No. 5: 5. On the facts and circumstances of the case and in law, assessment made u/s. 143(3) by ITO-4(2) is invalid; it is in violation of sec. 127(1) sec. 127(3); notice u/s. 143(2) issued by ITO-2(1); there is no mention of any order u/s. 127 by the PCIT for transferring the 'case' from ITO-2(1) to ITO-4(2); in absence of order passed u/s. 127 by PCIT, assessment made u/s. 143(3) by ITO-4(2) would be invalid as without having valid jurisdiction for making assessment u/s. 143(3), is liable to be quashed. 2. Before proceeding any further, I shall first deal with the maintainability of the additional grounds of appeal that have been raised before me. Ostensibly, as the assessee by raising the additional ground of appeal has sought my indulgence for adjudicating an issue involving purely a question of law which would not require looking any further beyond the facts available on record, therefore, I have no hesitation in admitting the same. My aforesaid view that where an assessee, had raised, though for the first time, an additional ground of appeal before the Tribunal which involves purely a question of law and requires no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion assumed by the A.O., i.e. ITO-4(2), Raipur for framing the assessment u/s. 143(3) of the Act dated 27.12.2017, therefore, I shall first deal with the same. 9. The Ld. AR for the assessee submitted that while for the notice u/s. 143(2) of the Act in the present case was issued by ITO-2(1), Raipur but the assessment was, thereafter, framed by the ITO-4(2), Raipur. Elaborating further on his aforesaid contention, the Ld. AR submitted that ITO-4(2), Raipur had in complete disregard of the mandate of Section 127(1) of the Act assumed jurisdiction without any valid transfer of the assessee s case to him from the ITO-2(1), Raipur. It was submitted by the Ld. AR that the case of the assessee was transferred from ITO-2(1), Raipur to ITO-4(2), Raipur without there being any order of transfer by the competent authority as was mandatorily required u/s. 127(1) of the Act. The Ld. A.R. submitted that as no valid notice u/s. 143(2) of the Act was issued by the A.O., i.e. ITO-4(2), Raipur who had framed the assessment in the present case, therefore, the impugned assessment was liable to be quashed. Based on the aforesaid facts, the Ld. AR submitted that as the A.O., i.e. ITO-4(2), Raipur had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit to cull out the provisions of Section 127 of the Act, which reads as under: 127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal 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 the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial areas specified in the notification. Nothing has been brought on record by the Ld. DR which would reveal that any notification vesting jurisdiction over the case of the assessee with the ITO-4(2), Raipur was issued after the notice u/s. 143(2), dated 29.07.2016 was issued by the ITO-2(1), Raipur. 15. Apropos the claim raised by the A.O., i.e. ITO-4(1), Raipur in his letter dated 10.05.2024 (supra) that as the jurisdiction over the assessee s case remained within the same range, therefore, there was no requirement for the Pr. CIT to pass any order of transfer u/s. 127 of the Act, the same is found to be both factually and principally wrong. The case of the assessee had been transferred from ITO-2(1), Raipur to ITO-4(2), Raipur, i.e. from Range 2 to Range 4. Be that as it may, as per the mandate of Section 127 of the Act transfer of any case from one A.O.. to any other A.O.. would mandatorily require recording of reasons for doing so on the part of the concerned authority, viz. Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. It is further provided in sub-section (1) of Section 127 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether 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 the same Director General or Chief Commissioner or Commissioner - (a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred 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, pass the order; (b) Where the Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is patently illegal since it has been held in this judgement that in case of transfer within the same city, locality or place although the opportunity of hearing as postulated in section 127(1) and (2) has been dispensed with, other statutory formalities which includes issuing an order are required to be complied with. Similarly transfer of files for the assessment years 2007-2008, 2008-2009 and the earlier years as intimated in the letter/notice dated 30th July, 2009 issued by the respondent No. 1 is also bad in law. The argument of the respondents that in case of intra city transfer no order is required to be passed, cannot be accepted in view of the settled position of law in Kashiram Aggarwalla (supra) and in S.L. Singhania (supra) wherein the validity of the orders were under challenge, meaning thereby an order recording transfer has to be on the records. The judgement in Subhas Chandra Bhaniramka (supra) where it has been held that in case of transfer of file under section 158BD resort has to be made to section 127 also applies in the instant case. The judgement in M.A.E.K.K. Verma (supra) relied on by the Revenue is not applicable as it dealt with the question whether in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 127 of the Act that wherever it is possible to do so the appropriate authority shall afford a reasonable opportunity of being heard in the matter to the assessee. Although subsection (3) of Section 127 of the Act dispenses with the requirement of affording a reasonable opportunity of being beard to the assessee in a case where the transfer of case is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place, but it does not dispenses with the statutory requirement of recording of the reasons for doing so by the concerned authority. As such, in the case before me, where jurisdiction over the case of the assessee had been transferred to ITO-2(1), Bhilai from ITO-1(4), Bhilai, i.e. within the same city, though no requirement of affording a reasonable opportunity of being heard to the assessee was required, but the pre-condition contemplated under sub section (1) of Section 127 of the Act, i.e., recording of reasons for doing so by the appropriate au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 the same Director General or Chief Commissioner or Commissioner - (a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred 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, pass the order; (b) Where the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place. (Emphasis supplied). It is evident that the respondent No. 2 had sought to justify his action by stating that the jurisdiction automatically gets vested with the jurisdictional officer and no order under section 127 is required to be passed. In my view, the letter/notice dated 21st October, 2009 is patently illegal since it has been held in this judgement that in case of transfer within the same city, locality or place although the opportunity of hearing as postulated in section 127(1) and (2) has been dispensed with, other statutory formalities which includes issuing an order are required to be complied with. Similarly transfer of files for the assessment years 2007-2008, 2008-2009 and the earlier years as intimated in the letter/notice dated 30th July, 2009 issued by the respondent No. 1 is also bad in law. The argument of the respondents that in case of intra city transfer no order is required to be passed, cannot be accepted in view of the settled position of law in Kashiram Aggarwalla (supra) and in S.L.Singhania (supra) wherein the validity of the orders were under challenge, meaning thereby an order recording transfer has to be on the records. The judgement in Subhas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vor of the assessee. For the sake of clarity, the observations of the Tribunal are culled out as under: 6. We find that no notice u/s. 143(2) was issued by ITO, Wd-6(1), Kolkata before completing the assessment. We note that ITO, Wd-34(2), Kolkata did not enjoy the jurisdiction over the assessee company by virtue of both the earlier Notification No. 228/2001 dated 31.07.2001(CBDT) as well as the latest Notification No. 50/2014 dated 22.10.2014 of CBDT as discussed above. Therefore, the assessment completed by ITO, Wd- 6(1), Kolkata on the strength of the notice issued u/s. 143(2) of the Act by ITO, Wd-34(2), Kolkata (who did not enjoy jurisdiction) is non-est in law and, therefore, is bad in law and consequently null in the eyes of law. Moreover, we also take note that Pr. CIT/CIT-12, Kolkata under whom ITO, Ward-34(2), Kolkata functioned has not issued any order of transfer of the jurisdiction as contemplated u/s. 127 of the Act to ITO, Wd-6(1), Kolkata. The Hon'ble jurisdictional High Court in Kusum Goyal (2010) 329 ITR 283 (Cal) has clearly spelt out that the ITO on its own cannot transfer the jurisdiction without order from the competent authority. In this case, we note tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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