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2023 (5) TMI 404 - AT - Income TaxValidity of assessment order passed u/s 147 r.w.s. 144C - transferring the case of the Assessee without serving any notice u/s 127 - case of the Assessee was stated to have been transferred by ACIT, Circle-1, Moradabad to DDIT / ADIT (International Tax), Lucknow, considering the NRI status of the Assessee - HELD THAT:- The mandate of section 127 of the Act is that before transferring the jurisdiction from one Assessing Officer to another, who is not subordinate to the same Commissioner, it needs must be ensured (i) that the Commissioners to whom the respective Assessing Officers are subordinate are in agreement inter se regarding the transfer, (ii) that reasons are recorded for transferring the jurisdiction, (iii) that a reasonable opportunity of hearing is provided to the affected Assessee, and (iv) that an order is passed u/s 127 of the Act . In the present case, as per the jurisdiction order No. 3/2020 dated 22.12.2020, passed by the Pr . CCIT and furnished on record by the Revenue, the superior head of the ACIT / DCIT (International Tax), Lucknow is the Commissioner of Income Tax (International Taxation), Delhi, whereas, vide Corrigendum dated 27.08.2020 [Sr. No. (viii) of Notification No. S.O. 2755(E), dated 13.8.2020], it was clarified that the PCIT, Bareilly exercised jurisdiction over the Assessee who was assessed / assessable with the jurisdiction of the Pr. CIT / CIT, Moradabad - Ground Nos.1 and 2 raised by the Assessee are accepted. Assessment u/s 144C - Whether AO erred in passing a draft assessment order u/s 144C (1) without appreciating that the Assessee did not qualify as an ‘eligible assessee’ u/s 144C(13), where no variation had been proposed by the AO and the Assessee was not a foreign company? - HELD THAT:- As per section 144(15)(b), ‘eligible assessee’ means any person in whose case a variation prejudicial to the interest of such person is proposed to be made by the AO, which variation arises in consequence of the TPO’s order, and any foreign company. Section 144(1) requires a draft of the proposed assessment order to be forwarded by the AO to such eligible assessee. In the present case, vide the assessment order dated 28.6.2022, the Assessee has been held to be a resident in India, as a consequence whereof, salary income earned by the Assessee in Singapore has been taxed in India. Then, in the Assessee’s case, no variation prejudicial to his interest, at the hands of the AO, has arisen as a consequence of the order passed by the TPO under section 92CA(2) of the Act , nor is the Assessee a foreign company. Therefore, neither of the conditions prescribed by section 144C (15) (b) stands fulfilled and as such, the Assessee is not an ‘eligible assessee’ within the meaning of section 144C (15). Hence, as correctly contended, there was no question of the AO passing a draft proposed assessment order under section 144C(1). Further still, the Assessee being an individual , even in case he were to be held to be a non-resident , he would not fall within the definition of ‘eligible assessee’, as prescribed by section 144C(15). Assessment barred by limitation - Assessee was not an ‘eligible assessee’ and no draft order was to be forwarded to him, as observed by us herein-before. Therefore also, the requirement of section 144C (12) could not have been complied with. Once this is so, the limitation to pass the assessment order would be one provided under section 153(2) of the Act, prescribes for the proviso to section 153(2) provides that the time limit to pass an assessment order u/s 147 is twelve months from the end of the financial year in which notice u/s 148 was served. Herein, the notice u/s 148 was issued on 3.7.2019. Thus, the limitation would have been 31.3.2021. This stood extended up to 30.09.2021, by virtue of the ‘Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act , 2020’, read with Notification S.O. 2580(E) [No. 74/2020/F.No.370142/35/2020-TPL], dated 25.6.2021. The assessment order, however, was passed on 28.06.2022. The same is, hence, clearly barred by the limitation provided u/s 153(2) of the Act. The same is, accordingly, held to be void ab initio for this reason also. Assessee appeal allowed.
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