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2023 (2) TMI 531 - ORISSA HIGH COURTJurisdiction of ACIT Bhubaneswar consequent to transfer of case - Opposite Party No.1 can exercise jurisdiction over the Petitioner-VRL which is a non-resident company incorporated in UK - ACIT at Bhubaneswar exercising jurisdiction over the Petitioner - HELD THAT:- A perusal of Section 127 (2) indicates that it envisages transfer of cases of an Assessee to an AO not subordinate to the same Commissioner, who originally exercises jurisdiction over the Assessee. In the present case, it is CIT (IT)-1, New Delhi who would have to pass orders transferring jurisdiction of the cases of VRL to O.P. No.1 in Bhubaneswar. The latter is not subordinate to the CIT (IT)-1, New Delhi, but to his counterpart in Kolkata. In such event u/s 127(2)(a), no such transfer of jurisdiction can take place without affording the Assessee a reasonable opportunity of being heard in the matter. Department in the present case has not been able to produce any such order, transferring the jurisdiction vis-à-vis VRL from the CIT (IT)-1, New Delhi to Opposite Party No.1 in Bhubaneswar. While in terms of Section 120 of the Act, it might be possible for the CIT (IT), New Delhi to transfer jurisdiction from one Assessing Officer to another within his jurisdiction, there is no power u/s 120 of the IT Act to transfer jurisdiction to an AO who is not subordinate to the CIT (IT), Delhi. For that purpose, it is only Section 127(2)(a) of the IT Act that could apply. In similar circumstances, the Delhi High Court in an order in Louis Dreyfus Company Asia Pte. Ltd. v. Commissioner of Income Tax (International Taxation-2 [2022 (5) TMI 1505 - DELHI HIGH COURT] quashed the notices issued to the Petitioner by the DCIT in Mumbai when in fact that case was subject to the jurisdiction of the DCIT (IT) in New Delhi. For the aforementioned reasons, the Court is not satisfied that the Department has been able to explain the legal basis for Opposite Party No.1 i.e. ACIT at Bhubaneswar exercising jurisdiction over the Petitioner and issuing the impugned notices under Section 148 - The Court, therefore, concludes that the impugned notices were issued by O.P. No.1 without jurisdiction and, therefore, are unsustainable in law. The impugned notices and all proceedings consequent thereto are hereby quashed. This will however not preclude the Department from proceeding hereafter in accordance with law.
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