Legal necessity of passing transfer order under Section 127 cannot be foregone even if transfer made at request of assessee, so was held by the Income Tax Appellate Tribunal (ITAT), Jaipur.
The assessee, Brijesh Sharma is an NRI, who was a resident of Hongkong, decided to shift to India along with his family. The assessee filed his return of income for assessment year 2012-13 on 27.07.2012 declaring total income of Rs. 1,55,660/-. The return of income was processed u/s 143(1) and was picked up for scrutiny by issuing notice u/s 143(2) of the I.T. Act, 1961 on 12.08.2013.
Account of change of jurisdiction a fresh notice u/s 143(2) of the Act was issued on 20.10.2014 which was duly served upon the assessee. During the assessee submitted to the AO vide letter dated 12.11.2014 that the assessee had purchased a plot of land situated in Jaipur for disclosed consideration of Rs. 5,21,000/- which was paid by cheque. The AO issued summon u/s 131(2) the seller.
In her statement recorded on oath u/s 131 before AO on 07.01.2015, she stated that the said plot was sold by her to the assessee for a consideration of Rs. 12,21,000/- out of which, Rs. 5,21,000/- was received through cheque and Rs. 7,00,000/- through cash. The AO noted that cash was given by the assessee on 01.10.2011 much before the date of agreement executed on 11.01.2012.
It was, therefore not possible that cash was paid before the date of agreement to resolve the dispute as the assessee had earlier submitted that the dispute had arisen after the agreement. The AO therefore, concluded that the payment of Rs. 7,00,000/- was made out of the undisclosed income and added the same. Aggrieved with the assessment, the assessee has filed this appeal.
The Counsel for the assessee, Praveen Saraswat submitted that Notice u/s 143(2) dated 12/08/2013 was received thru e-mail on 03/09/2013 from DDIT, International Taxation, New Delhi. DDIT, New Delhi did not enjoy either the territorial jurisdiction u/s 124 or by virtue of section 120 of the Act. Therefore, the assessee requested vide e-mail, on 03/09/2013 for change of jurisdiction to Jaipur. Thereafter, assessee was not served any notice of hearing u/s 127(3) or order of transfer u/s 127(1)/(2).
The Tribunal observed that “In this case, assessee himself has requested for transfer of his case from Delhi to Jaipur, which can be deemed to be no-objection from the side of assessee. However, the necessity of passing order u/s 127 cannot be dispensed with. It is undisputed fact that the AO at New Delhi had transferred the file to the AO at Jaipur and, therefore, even if they are both under the jurisdiction of the same Director-General or the Pr. CIT, the notice u/s 127(1) was to be given to the assessee and order u/s 127(3) was to be passed by Director-General or Pr. CIT who can transfer the case u/s 127 of the Act.
No such procedure has been followed by the revenue. Therefore, we are of the opinion that the notice u/s 143(2) by DDIT, Jaipur is without jurisdiction and authority, and consequently the order passed u/s 143(3) is held to be void ab-initio.”
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