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2020 (12) TMI 559 - AT - Income TaxValidity of reopening of assessment - jurisdiction of ITO, Ward-5(3) to frame re-assessment order - usurping the jurisdiction - whether the ITO, Ward-5(3) was empowered on 25.03.2014 to give effect to the order of Pr. CIT-II dated 28.03.2013 passed u/s. 263 ? - earlier order dated 28.03.2013 passed u/s. 127 of the Act, by the then CIT-II, Kolkata had transferred the jurisdiction over the assessee's case from ITO, Ward-5(3), Kolkata to the charge of DCIT/ACIT, Central Circle-XVII, Kolkata, on the request of CIT-I dated 8/14.12.2011 - HELD THAT:- In this case, we have noted that ITO, Ward-5(3) got back his power only on re-transfer of assessee's case to him when the order u/s. 127 was passed later on 31.05.2016, so the question of ITO, Ward-5(3), Kolkata giving effect to Pr. CIT-II order dated 28.03.2013 does not rise at all on 25.03.2014. Thus we find that in assessee's case the ITO, Ward-5(3) did not enjoy jurisdiction to assess the income of assessee as an AO between 28 December 2012 and 31 May 2016. ITO, Ward-5(3), Kolkata ceased to be AO of assessee after the transfer order was passed by Ld. CIT-II, Kolkata on 28.08.2012, so after such order by the competent authority (which fact is not disputed before us), then the ITO, Ward-5(3), Kolkata became functus officio and was divested of the jurisdiction. We hold that in the given facts of the case, the appellant's case was not saved by the provisions of Section 124(5) of the Act. Accordingly, the contentions of the Ld. CIT, DR are rejected being devoid of any merit in law as well as on facts. In the appellant's case, the provision of section 124(3) does not come into play since the case of the assessee was legally transferred by the competent authority u/s. 127 as far back as in the year 2012. In the circumstances therefore, as discussed above, once transfer of the case of the assessee is ordered u/s. 127 of the Act, the AO ITO, Ward-5(3), Kolkata who was vested with the jurisdiction by virtue of the direction or order issued under sub-section (1) or (2) of sec. 120 and section 124 of the Act stood divested of the same. As held by the Hon'ble jurisdictional High Court in M/s. Ramshila Enterprises Pvt. Ltd. (infra), [2016 (5) TMI 17 - CALCUTTA HIGH COURT] since the jurisdiction was divested of the earlier AO by virtue of transfer order u/s. 127 of the Act, the earlier AO, which in this case is AO i.e. ITO, Ward-5(3), Kolkata ceased to be Assessing Officer after the date of transfer i.e. 28.08.2012 and therefore he (i.e. ITO, Ward-5(3), Kolkata) ought not to have issued statutory notices upon the assessee unless he had been re-empowered or vested by a fresh transfer order u/s. 127 of the Act (i.e. from DCIT, CC-XVII, Kolkata to ITO, Ward-5(3), Kolkata), which is not the case of the Revenue and though it did later happen in this case (Re-transfer as on 31.05.2016). In the circumstances therefore, the ITO, Ward-5(3), Kolkata could not have usurped the jurisdiction when his jurisdiction was divested of it, by order dated 28.08.2012 by Ld. CIT-II, Kolkata u/s. 127 of the Act Section 124(3) of the Act does not come into play in this case and so in no way help the Department to justify the action of ITO, Ward-5(3), Kolkata in issuing statutory notices to the assessee, which action itself was without jurisdiction. So the challenge raised by the Ld CIT, DR fails. Therefore, we do not find any merit in the contention of the Ld. CIT, DR on this score. As the ITO-5(3) Kolkata, did not enjoy jurisdiction over the case of the appellant on 25.03.2014, the re-assessment order passed u/s. 263/143(3) dated 25.03.2014 was legally unsustainable and therefore is null in the eyes of law and therefore quashed - Decided in favour of assessee.
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