Transfer of Income Tax Jurisdiction Without issuing Order u/s 127 Held Invalid: ITAT quashes Entire proceedings [Read Order]
The bench said that where jurisdiction is shifted from one Assessing Officer to another not otherwise vested with jurisdiction under Sections 120 or 124, an order under Section 127 is mandatory.
Transfer - Income Tax Jurisdiction - Taxscan
Transfer - Income Tax Jurisdiction - Taxscan
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed assessment proceedings holding that the transfer of jurisdiction between Assessing Officers without a valid order under Section 127 of the Income-tax Act, 1961, is invalid and renders the entire proceedings void.
The assessee, Ramesh Kumar Gupta challenged the assessment framed under Section 144, arguing that the case was initially under the jurisdiction of ITO Ward 39(4), Delhi, but was later transferred to Ward 36(4) and finally to Ward 36(6), Delhi.
The notices under Section 143(2) and 142(1) were issued by different officers, and the final assessment was passed by Ward 36(6). However, the transfer of jurisdiction was recorded only through an order of the Joint Commissioner under Section 120(5), without any order under Section 127.
The bench, depending on the Delhi High Court’s ruling in Raj Sheela Growth Fund (P) Ltd. v. ITO, said that where jurisdiction is shifted from one Assessing Officer to another not otherwise vested with jurisdiction under Sections 120 or 124, an order under Section 127 is mandatory. In the absence of such an order, the succeeding officer does not acquire lawful jurisdiction.
The Tribunal observed that “In this regard, we find force from the decision of Hon’ble jurisdictional High Court in the case of Raj Sheela Growth Fund (P) Ltd (supra) wherein it is held that where the case was transferred from one AO having jurisdiction over the assessee to another AO who otherwise did not have jurisdiction in terms of the direction of the Board under Section 120 and 124 of the Act, then transfer order under Section 127 is mandatory, without which the jurisdiction of the AO cannot be conferred to pass any assessment order.”
Accordingly, the ITAT held that the Assessing Officer, Ward 36(6), Delhi, lacked valid jurisdiction to frame the assessment in the absence of an order under Section 127, and thus quashed the proceedings in entirety.
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