The Income Tax Appellate Tribunal (ITAT) Chennai Bench held that the assessee cannot question the power of transferring cases of authorities from one jurisdiction to another. Therefore, the bench upheld the assessment order passed by the lower authorities.
Assessee Natural Food Products is a Private Limited Company and is engaged in the business of trading of eggs, dhal, oil and sugar.
The main product supplied by the appellant during the period was Egg (hen) which was supplied as per the terms of the contract entered with ICDS and Noon Meal Scheme of Govt. of Tamil Nadu. The assessee Company has filed return of income under Section 139(1) of the Income Tax Act, 1961 for all assessment years.
A search and seizure, under Section 132 of the Income Tax Act was conducted on 5-7-2018 in the premises of the appellant. During the course of search a statement under Section 132(4) Income Tax Act is said to have been recorded from Mr.T.Gnanasekaran Accounts Manager.
After concluding the search, a notice under Section 153C of the Income Tax Act was issued to assessee. In response to this notice assessee filed return of income on 22-07-2019 for Asst. Years 2015-16 to 2018-19 and for Asst. year 2010-11 on 03-08- 2021 and declared total income which has been declared in the return of income filed under Section. 139(1) of the Act for all assessment years.
Thereafter, the assessee case was selected for scrutiny. After making certain additions the AO passed the assessment order.
By challenging the assessment order passed by the AO under Section 143(3) r.w.s. 153C of the Income Tax Act, on various grounds, including legality of search conducted and consequent assessment proceedings, jurisdiction of the AO in assessing the income of the assessee, for assessment years 2010-11, 2015-16 to 2018-19, the assessee filed an appeal before the Commissioner of Income Tax (Appeal) {CIT(A)}, who dismissed the appeal. Accordingly, against the order the assessee filed an appeal before the tribunal.
Before the bench, the assessee challenged the legality of search conducted under the Section 132 of the Income Tax Act, and consequent assessment proceedings in light of jurisdiction of the assessing officer and transfer of case from one assessing officer to another officer in violation of relevant provisions.
During the proceedings D. Anand, counsel for the assessee submitted that a notification was issued by PCIT, Salem,under Section 127 of the Income Tax Act, transferring appellant’s case. However, it was noticed that there was no agreement evidenced in the said notification, as arrived between officers of equal rank for transferring the jurisdiction as mandated under section 127(2)(a) of the Income Tax Act.
Thus, it was found that no agreement existed between officers of equal rank, which is against law and the transfer is non-exist as per law.
Therefore, the order passed by the Assessing Officer without determining the valid jurisdiction as per the provisions of the law.
M. Rajan, Counsel for Revenue, supported the decision of lower authorities and argued that the Department has followed due procedure in conducting search, impounding incriminating documents and recording statements.
Further, on the issue of jurisdiction of the Assessing Officer and transfer of case from one Assessing Officer to another Assessing Officer, the Department has followed due procedure provided under Section 124 and 127 of the Income Tax Act, which is evident from the fact that the appellant case has been transferred from PCIT, Trichy to DGIT, Central, Chennai by passing a valid order in terms of Section 127 of the Income Tax Act.
It was observed by the tribunal that under provisions of section 127 of the Income Act, it was very clear that the power to transfer cases from one Assessing Officer to another Assessing Officer rests with the Principal Director General or Principal Chief Commissioner.
Thus, the assessee could not call in question the powers vested with the authorities to transfer the cases in a manner convenient to the Department
After reviewing the facts and submissions of the both parties, the two-member bench of V. Durga Rao, (Judicial Member) and Manjunatha. G, (Accountant Member) dismissed the appeal and upheld the assessment order passed by the lower authorities.
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