TMI Blog2012 (5) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction to issue these notices u/s 147/148 and the subsequent transfer of jurisdiction dated 9-3-2004, is in contravention of Sec. 127, as statutory opportunity of hearing was not given to assessee. These issues have been raised by following grounds: On the facts and circumstances of the case the learned CIT(A) has erred:- 1. In confirming the order of the ACIT Circle Noida passed u/s 144/147 who lacked jurisdiction to issue notice u/s 148 dated 27-3-2003 for A.Y. 1996-97 to 2001-02 31-3-2003 for A.Y. 2002-03 and subsequent proceedings u/s 142(1) in pursuance thereto, before the transfer of jurisdiction over the assessee from Delhi to Noida w.e.f. 9-3-2004, thus making the order of reassessment passed by the AO Noida illegal/ ab initio void, as no notices u/s 148 were issued to the assessees after 9- 3-2004 when the jurisdiction over the assessee's case was transferred from ITO Ward 33(2) to ACIT Noida. 2. In ignoring the Chief Commissioner of Income tax Meerut letter dated 3-3-2004 regarding the jurisdiction status of the assessee in Delhi the need to get the jurisdiction transferred over the assessee from Delhi to Noida under specific order u/s 127 by the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i hereby transfer the case, the particulars of which are mentioned in Column Nos. 1 and 2 of the Schedule hereunder from the Assessing Officer mentioned in Column no. 3 to the Assessing Officer mentioned in Column no. 4 of annexure below:- Name of the assesse Address From To Shri Deepak Gupta 205, Kamal Plaza Building Karol Bagh, New Delhi. ITO Ward-, 33(2), New Delhi ACIT, Noida. This order has been passed for coordinated post search assessment with immediate effect. Sd/- (Commissioner of Income Tax) Delhi-XI, New Delhi. 3.1. A perusal of the order u/s 127(2) and record clearly reveals that: (i) It has not been disputed by department that prescribed opportunity of hearing before transfer was not given to assessee. (ii) Even if unsustainable transfer is assumed to be correct then the jurisdiction was vested in ACIT, Noida w.e.f. 19-3-2004. Notice u/s 147/148 were issued prior to that date i.e. 9-3-2003 31-3- 2003 (AY 2202-03) (iii) From the address given in the order it is clearly revealed that Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 to CIT Noida emphasized the need for a valid order for transfer of inter charge jurisdiction, which is as under: F.No. CIT-Tech./Approval/2003-04/Scrutiny/V-1529 Office of the Chief Commissioenr of Income tax, Meerut Vaishali, Ghaziabad. Dated: 03-03-2004. To The Commissioenr of Income Tax Ghaziabad. Sir, Sub:- Jurisdiction- Proposal for transfer of records of M/s Auram Jewellery Export Pvt. Ltd., 167, NEPZ, Noida and Sh. Deepak Gupta Smt. Urmila Gupta -Reg. Kindly refer to your letter dated 20-01-2004 and the queries raised by this office dated 25-01-2004 to ACIT, Noida. In this regard, I am directed to convey the following:- ACIT, Noida assumed jurisdiction over M/s Aurum Jewellery Export Pvt. Ltd., 167, NEPZ Noida by virtue of issue of notice u/s 148 dated 27-03-2002 for A.Y. 95-96. Thereafter in case of Mr. Deepak Gupta notice u/s 148 for the A.Y. 1996-97 to 2001-02 and notice u/s 142(1) for A.Y. 2002- 03 were issued on 27-3-2003 and in the case of Smt. Urmila Gupta also notice u/s 142(1) for the A.Y. 2002-03 was issued on 27-03-2003. from the perusal of the record it is seen that these notices were served by affixture and there was no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax (HQ) 3.8. ACIT Noida, subsequent to this letter requested CIT Ghaziabad for transfer the jurisdiction of the assessee's case from CIT, New Delhi to CIT, Ghaziabad and assign the jurisdiction to the ACIT Circle, Noida. It clearly demonstrates that transfer of jurisdiction was belatedly requested by ACIT, Noida himself after 3-3-2004. The jurisdiction was thereafter transferred within 5 days by above order u/s 127(2) on 9-3-2004 from one city to another without giving opportunity of hearing prescribed by Sec. 127(2)(a). 3.9. It is further emphasized that despite this legal position, ACIT, Noida arbitrarily proceeded with invalid 148 notices and framed the impugned ex parte assessments on 22-3-2004 in the case of Deepak Gupta and on 29-3- 2005 in the case of Smt. Alka Tiwari. 3.10. Thus all the 148 notices issued on the assessee are prior to the date of the purported transfer of jurisdiction and ab initio void and ACIT Noida had no jurisdiction to issue such notices u/s 148 and frame the impugned ex parte assessments. Consequently, all these notices and assessments being bad in law ab initio void deserve to be quashed. In this backdrop ld. counsel contends that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner's assessments are being properly framed by the officers of Noida falling in the jurisdiction of CIT, Ghaziabad. It was further held that DG((Inv.) had no reasonable ground to set up inquiry against any of the officers i.e. ACIT Noida and other respondents in the writ petition as they were not under his control and supervision. Thereafter, Hon'ble Allahabad High Court by an order dated 30th March 2010 again directed the CIT(A) to consider and decide petitioner's appeals expeditiously and preferably within a period of two months from the date of receipt of the certified copy of the order. CIT(A) was specifically directed to consider and adjudicate the question with reference to the jurisdiction of the ACIT, Noida, as raised by the assessee. 3.12. Assessee again vide letter dated 12-1-2004 requested ACIT, Noida to transfer his case to correct jurisdiction i.e. AO, New Delhi, which is as under:- Date: 12/01/2004 To, The Assistant Commissioner Income Tax Sector 20, Noida. Subject: Transfer my case from Noida to Delhi Income tax Department and also release the seized properties. Respected Sir, In reference to the above captioned matter, I wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee that he used to file the return of income with ITO, Ward-33(2), Delhi vide acknowledgement no. 8046 dated 10-9-2002 at the income of ₹ 1,02,540/-. The jurisdiction over the assessee has been assigned u/s 127 of the Income Tax Act from ITO, Ward- 33(2), New Delhi to the Undersigned (ACIT, Circle, Noida) vide order dated 29th March 2004 by the Commissioner of Income Tax, Delhi-XI, New Delhi. Since the return was filed by the assessee prior to issue of notice u/s 142(1), therefore, the proceedings initiated vide notice dated 27-3-2002 are hereby dropped as the same become infructuous. However, the proceedings u/s 147 if required shall be initiated separately. Sd/- (C.B. Singh) Asstt. Commissioner of Income Tax Circle, Noida. 3.14. CIT(A) thereafter by order dated 7-2-2011 though admitted that the assessee has been filing the returns of income till A.Y. 2002-03 with Ward 33(2), New Delhi. Nevertheless it was arbitrarily held that ITO, Ward 33(2) assumed jurisdiction on wrong representation of facts by assessee, therefore, the jurisdiction of AO, Delhi was ab initio illegal and that of ACIT, Noida valid. While ld. CIT(Appeals) projected as if asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant was fully aware of the fact that ACIT, Noida was proceeding to complete appellant's assessment and it was in appellant's knowledge that his case would be centralized with him but he could not furnish any justification of assuming jurisdiction in Delhi either before the ADIT(Inv.) or AO or even during appellate proceedings. (v) Further, opportunity is not needed even in view of section 127(3), which reads as under:- 127(3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. Noida and Delhi are, for all practical purposes, same locality or place and hence, in spirit, if not in letters, the assessee's jurisdiction was being transferred from one AO to another at same place. From this angle also, opportunity was not really needed to be given to the assessee. Thus the contention raised by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of this case from Ghaziabad to Delhi - Held yes . Whether, therefore, any specific order of Chief Commissioner, Kanpur transferring case of assessee to Delhi was required - Held, no- Whether jurisdiction order u/s 124(2) dated 10-04-1996 was a valid order as oral consent from Chief Commissioner, Kanpur had been obtained - Held, yes- Whether, in view of fact that Assessing Officer, Delhi had already got territorial jurisdiction over assessee, notices u/s 148 issued prior to passing of said order were not invalid and, therefore, assessment orders passed 08-03-1996 at Delhi were the only valid assessment orders- Held, yes . 3.17. Ld. counsel contends that the findings given by AO CIT(A) are contrary to law and facts on record as: (i) Assessee was not served with notice u/s 148 dated 27-3-2003. No proof of service is ever produced by department. Thus assessee at the first available opportunity on the knowledge about 148 notice submitted that first notice dated 27-3-2003 was not served on the assessee. This is clear from the record that again notice u/s 148 was issued on assessee on 17-7-2003 through Inspector, which was also not received by it. If there was a properly s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... himself assessing jurisdiction that too ignoring the objections of the assessee. 3.19. Apropos third finding, ld. counsel contends that ACIT, Noida took no pains for valid transfer of jurisdiction. Rather he slept on the legal procedure and assessee's objections. The transfer order again is bad in law as mandatory requirement of opportunity of being heard ws not given Reliance is placed on: - Melco India Pvt. Ltd. others V. CIT (2003) 260 ITR 450 (Del); - Anand Kumar Arya V. CIT (2009) 314 ITR 324 (Cal) - Singhal Enterprises Pvt. Ltd. Vs. CIT (2009) 315 ITR 246 (Cal) - Anil Kumar Kohari Vs. UOI (2010) 39 DTR 19 (Gau). 3.20. The clear scheme of Income-tax Law provides that when an officer has jurisdiction over the assessee, the same cannot be transferred and assumed by another officer unless there is an appropriate order passed by the Competent Authority transferring the jurisdiction from one city to other after giving an opportunity of hearing to assessee. 3.21. Coming to the reliance on the order of DGIT (Inv.), reliance is wholly misplaced as DGIT (Inv.) himself has observed in his order that he had no role in deciding the issue of jurisdiction and on o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO but keeping in view the fact that the present is a case where there is total lack of jurisdiction in respondent No. 2, we are interfering in the matter. There is no gainsaying the fact that the petitioner was posted at Pune when he was in the service of the Army and for the assessment year in question he filed his return of income with the ITO there and the same stands assessed. The proceedings had been completed and the tax found payable had been deposited/accounted for. Thereafter, if the assessment proceedings are to be re-opened or if the income for the relevant assessment year is to be reassessed, it is the ITO who assessed the same in the first instance alone has the jurisdiction to proceed in the matter under section 147 read with section 148 unless the case has been transferred by a competent authority to another Assessing Officer under section 127 of the Act and in that event the latter will have jurisdiction to proceed. Section 127 which is relevant for our purpose is reproduced hereunder for facility of reference :- Power to transfer cases - (1) The Director General or Chief Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed on or before such date, and includes also all proceedings under this Act which may be commended after the date of such order or direction in respect of any year. Under the aforesaid provision, the Director General or Chief Commissioner or Commissioner can transfer any case at any stage of the proceedings from one Assessing Officer subordinate to him to another. If both the Assessing Officers are not subordinate to the same Director General or Chief Commissioner or Commissioner, then the transfer can be made on the respective Directors General or Chief Commissioners or Commissioners agreeing and in the event of disagreement, by the Board or any such Director General or Chief Commissioner or Commissioner authorised by it. The section expressly provides that on such a transfer it is not necessary to re-issue any notice when the same has already been issued by the Assessing Officer from whom the case is transferred and the Assessing Officer to whom the case is transferred is entitled to proceed from the stage at which he receives the case from his predecessor. It is also provided that wherever it is possible to do so, the assessee shall be given a reasonable opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). Though Hon'ble High Court has not commented on this aspect, it is noteworthy that a cost of Rs. One thousand has been imposed on the department for enforcing illegal transfer of jurisdiction. Hon'ble Court has held that unless a proper transfer order is passed by the Competent Authority u/s 127, the jurisdiction cannot be assumed by another officer. 3.27. Ld. counsel thus pleads that 148 notices issued by ACIT, Noida are bad in law and the order of CIT, Delhi dated 9-3-2004, transferring jurisdiction, is also bad in law and they should accordingly be quashed. 4. Ld. DR relies on the order of lower authorities and contends that the jurisdiction is defined in Section 124, which implies that the principal place of business will determine the jurisdiction of assessment. In this case the assessee's principal place of business was at Noida, therefore, the CIT, Noida had jurisdiction to issue 148 notices. 4.1. Assessee has obtained PAN no. from Noida only and deliberately filed earlier returns at Delhi instead of his correct jurisdiction i.e. Noida. 4.2. The transfer of jurisdiction/ record are administrative proceedings and cannot be interpreted in such a manner t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till 3-3-2004 the assessee and his wife have been filing their returns regularly with AO, Delhi and were assessed by ITO Delhi. There is no accusition in this letter that the Delhi jurisdiction was based on misrepresentation of facts. This letter further clarifies that the assessment of jurisdiction assumed by ACIT Noida was not on good grounds and he should not have issued the notice without the prescribed procedure of inter charge change of jurisdiction between two regions of income tax department with the endorsement of both the Commissioners. This letter clinches the issue and belies the observations of CIT(A) that Delhi and Noida are practically same locality and that the assessee wrongly got himself assessed at Delhi. With this authoritative communication of CIT, Delhi on the record issued to all the officers, we are unable to sustain any finding of the AO or ld. CIT(Appeals). There cannot be any hesitation in holding that by the time 148 notices were issued by ACIT, Noida, he had no jurisdiction, whatsoever on the assessee, therefore, all the notices issued /s 148 are invalid as per the provisions of Income-tax Act. This ground of the assessee is allowed. 6.2. Coming to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r transfer of jurisdiction is dated 22-3-2004 and the transfer order of jurisdiction u/s 127(2) was passed within three days i.e. 26-3-2004. There may be small variation in the date of notice u/s 148, however, facts and circumstances are similar that ACIT, Noida issued notice u/s 148 prior to jurisdiction transfer. Following our orders in the case of Deepak Gupta (supra), we allow the appeal in the case of Smt. Alka Tiwari also quashing 148 notice, reassessment and 127(2) order. 8. Before parting we may mention that the assessee's objections about jurisdiction been ignored by the departmental authorities without any lawful justification. It is trite law that India is governed by rule of law and income- tax Act is part of our system of rule of law. If the law provides clear statute governing an eventuality in that case the departmental authorities must respectfully carry out the words of the statute. The assessee has seen put to seek multiple proceedings before various authorities and had to file writ petitions in Hon'ble Allahabad High Court. In our humble opinion, it would be desirable that departmental authorities should follow the provisions of Income tax Act diligent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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