The Income Tax Appellate Tribunal ( ITAT ), Delhi Bench, has quashed an assessment order passed by the Income Tax Officer ( ITO ), Ward 50(2), Delhi, under Section 144 of the Income Tax Act, 1961, for the Assessment Year 2017-18.
The appellant, Sangeeta Wahi, had challenged the order passed by the Commissioner of Income Tax (Appeals), CIT(A)
The important issue in this case was the transfer of the appellant’s file from one Income Tax Officer to another without following the procedural requirements laid down under Section 127 of the Act. The appellant argued that the initial notice under Section 142(1), dated 09.03.2018, was issued by the ITO, Ward 52(2), Delhi.
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However, the case was later transferred to the ITO, Ward 50(2), without the issuance of a formal order under Section 127, which mandates that cases can only be transferred between Assessing Officers after due procedural compliance.
The appellant contended that the transfer of the file from ITO Ward 52(2) to ITO Ward 50(2) was not in accordance with the statutory provisions and, therefore, the assessment was void. The appellant’s counsel further highlighted that this transfer occurred before the introduction of faceless assessments, which began on 13.08.2020, and no transfer order under Section 127 was issued.
The Tribunal noted that the department, in response to the appellant’s application under the Right to Information Act (RTI), had acknowledged that the transfer was due to the merging of faceless assessments and not based on the statutory procedure under Section 127 of the Act. As per the appellant’s submissions and the information received, it was evident that the procedural requirements had not been met.
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The Tribunal cited the judgment in Raj Sheela Growth Fund (P) Limited v. Income-tax Officer (2024), which held that transfers without a Section 127 order lead to jurisdictional errors.
Considering the facts and the judgment cited, the Single Bench of Madhumitha Roy (Judicial Member) held that the transfer of the case from Ward 52(2) to 50(2) without a valid order under Section 127 rendered the assessment proceedings void. As a result, the assessment was quashed.
In conclusion, the ITAT ruled in favor of the appellant, allowing the appeal and setting aside the assessment order on grounds of jurisdictional error.
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