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2023 (11) TMI 1149 - AT - Income TaxValidity of assessment u/s. 143(3) by change in incumbent but without issuance of order u/s. 127 - Violation of mandatory procedural provision - Assumption of jurisdiction by AO in competing the assessment proceedings u/s. 143(3) - assumption of jurisdiction by the ITO ward 1(4) without issuing any valid notice u/s. 143(2) - whether an order u/s. 127 was issued by the Ld. PCIT in the present case or not to effect the change of incumbent? - HELD THAT:- Admittedly, in the present case a notice u/s. 143(2) were issued by ITO ward 1(1) who is not having a valid jurisdiction in the case of assessee, however, subsequently the case was transferred to ITO ward 1(4), who is the jurisdictional AO for the assessee. For change of incumbent no order u/s. 127 was issued by the Ld. PCIT having jurisdiction over such officers and the assessee’s case. From the report of the ITO ward 1(1) regarding issuance of order u/s. 127, mentioning that “it is not necessary an order u/s. 127 should be passed. Thus, does not mean that the Assessing Officer whether the return of income were earlier filed seized to have jurisdiction, provided the assessee has residence in his area place of business, class, income etc. residence can mean permanent residence as well as current or temporary residence of some permanence”, such explanations by the Ld. AO itself proves that no order u/s. 127 was issued by Ld. Principal Commissioner of Income Tax (PCIT). In a case where the assessment proceedings are initiated by an Assessing Officer and the same are later on transferred to another AO then according to section 127(4) an order u/s. 127(1) & (2), irrespective of with or without concurrent jurisdiction, has to be issued at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Assessing Officers from whom the case is transferred. Identical issue as been dealt in the case of Shri Bangalore Narayan [2023 (3) TMI 1403 - ITAT BANGALORE] as decided the issue of validity of assessment u/s. 143(3) by change in incumbent but without issuance of order u/s. 127, following the guiding principle of law laid down in the case of CIT vs Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT] wherein it is held that, issue of a legally valid notice u/s. 143(2) is mandatory for usurping jurisdiction to frame scrutiny assessment u/s.143(3) of the Act and absence of a valid notice u/s. 143(2) is not a curable defect. The view taken in the case of Hotel Blue Moon (supra) was reiterated by Hon'ble Supreme Court in another case of CIT vs Laxman Das Khandelwal [2019 (8) TMI 660 - SUPREME COURT] Issuance of notice u/s. 143(2) by the non-jurisdictional AO - Also issuance of a notice u/s. 143(2)(a) of the Act by the jurisdictional AO within the prescribed time limit is mandatory, without which the assessment order passed following such proceedings in violation of provisions of section 143(2)(a) is liable to be set aside. See S.K. industries [2017 (5) TMI 1800 - DELHI HIGH COURT] Thus assessment proceedings in absence of an order u/s. 127 for change of incumbent embedded with no notice issued u/s. 143(2) by jurisdictional AO, cannot be validated merely because the notice was issued earlier by an AO not having valid jurisdiction over the case of assessee. Violating mandatory procedural provision of the Act, which is prerequisite for framing an assessment u/s. 143(3) rendered the entire assessment proceedings and the assessment order passed u/s. 143(3) of the Act without jurisdiction - Decided in favour of assessee.
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