The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the assessment orders for Amit Kumar Gupta for the assessment years 2011-12 and 2012-13, noting a jurisdictional lapse in the transfer of the case. The tribunal found that the Principal Commissioner of Income Tax (Pr. CIT) in Bilaspur had transferred the assessee’s case from the Income Tax Officer (ITO) in Ambikapur to the ITO in Korba without providing the assessee an opportunity to be heard, as required by law.
In this case, the ITO in Korba initiated reassessment proceedings against the assessee under Section 147 of the Income Tax Act, 1961, based on information that the assessee had deposited Rs. 17,05,824 in cash into his bank account during the financial year 2010-11 (relevant to the assessment year 2011-12) but had not filed his income tax return.
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The ITO issued a notice under Section 148 of the Income Tax Act on 23-3-2018 and later transferred the case to the ITO in Korba following an order from the Pr. CIT in Bilaspur on 7-9-2018.
The assessee contended that the transfer was made without giving him an opportunity to be heard, as required under Section 127 of the Income Tax Act.
The assessee had failed to respond to multiple notices issued by the ITO in Korba, leading the officer to proceed with an ex parte assessment under Section 144 of the Act. The ITO treated the entire cash deposit of Rs. 17,05,824 as unexplained money under Section 69A of the Income Tax Act and assessed the assessee’s income accordingly.
The assessee, who was aggrieved by the above order, appealed before the Commissioner of Income Tax (Appeals) [CIT(A)], challenging the jurisdiction of the ITO in Korba and the validity of the assessment order. The CIT(A) upheld the assessment order, stating that the CIT(A) was not the appropriate forum to challenge the transfer order under Section 127.
The assessee contended that the transfer of his case was invalid as it was done without his consent or an opportunity to be heard.
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The ITAT observed that the Pr. CIT in Bilaspur had failed to provide the assessee with an opportunity to be heard before transferring the case, which was a violation of Section 127(3) of the Income Tax Act.
The bench noted that the CIT(A) should have adjudicated the assessee’s challenge to the jurisdiction of the ITO in Korba, rather than dismissing it on procedural grounds. The ITAT set aside the assessment orders and restored the matter to the CIT(A) for fresh adjudication, directing the CIT(A) to address the jurisdictional issue raised by the assessee. The ITAT, comprising Ravish Sood (Judicial Member), allowed the assessee’s appeal for statistical purposes.
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