CIT(A) cannot Transfer Jurisdiction from one Assessing Officer to another: ITAT [Read Order]

ITAT CBDT

While hearing the case between Deputy Commissioner of Income Tax and Subhash Gandhi, Amritsar bench of Income Tax Appellate Tribunal ( ITAT ) held that the Commissioner of Income Tax (Appeals) has no power to decide the validity of the order passed under section 127 of the Income Tax Act 1961, transferring the jurisdiction from one Assessing Officer to another since he cannot declare any order passed under the said section.

The Assessee in the present case is a proprietor of M/s K.C. Restaurant & Hotel assessed under the regular jurisdiction of Assessing Officer. Thereafter a search and seizure operation was carried out under section 132 of the Act at the premises of the assessee. In accordance to such search, the jurisdiction of the Assessee was transferred under the provisions of section 127 of the Act to Central Circle-II vide order by the competent authority and the competent authority restored the transfer to the Income Tax Officer. However, the jurisdiction was re-transferred to the competent authority and the assessment for the year was framed by Assistant Commissioner of Income Tax and compute the total income at Rs.2,03,480 as against income returned at Rs.1,00,406.

However, the Assessee was complied with the action of the authority and hold that the authority not granted an opportunity to the Assessee before the transfer of the jurisdiction and approached the CIT(A) on appeal. After analyzing the facts and circumstances of the issue CIT(A) accepted the contention of the Assessee and held that the order of transfer of the jurisdiction of the case passed under section 127 of the Act was invalid.

Aggrieved by the order passed by the CIT(A), the Revenue filed an appeal before the Tribunal by challenging the powers of the CIT(A) under section 246A of the Act and submitted that section 127 dealing with Power to transfer cases  provides through sub-section (1) that: `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. Thus it is evident that the power to transfer case lies with the Director General or Chief Commissioner or Commissioner.

After analyzing the facts and circumstances of the case deeply, the Tribunal bench including Judicial Member N.K.Choudhri and Vice President R.S.Syal objected the action of the CIT(A) and held that “since the first appellate authority has no jurisdiction to decide the validity or otherwise of an order passed under section 127, transferring the jurisdiction from one Assessing Officer to another, it is, but, natural that he cannot declare any order passed under the said section as invalid and consequently set aside the assessment order.”

The division bench further observed that “adverting to the facts of the instant case it can be concluded that CIT(A) crossed his jurisdiction in declaring the order under section 127 of the Act as invalid and as a fortiori, quashing the assessment. The impugned order is, therefore, overturned and the matter is restored to the file of the CIT(A) for deciding the appeal on merits, after allowing a reasonable opportunity of hearing to the assessee”. Therefore, the bench set aside the order passed by the CIT(A) while allowing the appeal filed by the Revenue for statistical purposes.

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