TMI Blog2020 (5) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment framed by the ITO Ward 6(2)(3), Bangalore is not in order on the simple reason that this was framed without giving notice u/s 143(2) of the Act. Before framing any assessment, there should be valid notice u/s 143(2) of the Act, as has been held in the case of ACIT And Another Vs. Hotel Blue Moon [ 2010 (2) TMI 1 - SUPREME COURT]. No valid notice u/s 143(2) was issued by the AO who held jurisdiction over the case of the appellant, the consequent order passed u/s 143(3) dated 29.12.2017 was legally unsustainable and therefore is null in the eyes of law and therefore quashed. - Decided in favour of assessee. - ITA No.1590/Bang/2018, CO No.41/Bang/2019 - - - Dated:- 27-4-2020 - Shri N.V.Vasudevan, Vice-President And Shri Chandra Poojari, Accountant Member For the Assessee : Sri. B. S. Balachandran, Advocate For the Revenue : Sri. Priyadarshi Mishra, JCIT-DR ORDER PER CHANDRA POOJARI, AM: This appeal by the Revenue and the cross objection by the assessee arise out of the order of the CIT(A), Bangalore-6, dated 08.01.2018, and they relate to the assessment year 2013-2014. 2. The Revenue has raised the following grounds: - 1. The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valid notice u/s 143(2) is void ab initio. No Estimation u/s 143(3) 3. The learned CIT(A) failed to appreciate that it is not permissible to estimate the income of an assessee without rejecting the books of account and framing the assessment u/s 144 of the Act. On the appeal of the Revenue 4.1 The Ground No.4 taken by the appellantrevenue is not maintainable as no new evidence was adduced before the learned CIT(A) and there was no contravention of the provisions of Rule 46A(3). 4.2 The Appeal of the revenue is devoid of any merit since the finding of fact recorded by the learned CIT(A) on various issues is not shown to the perverse and therefore, liable to be dismissed. 4.3 The appeal of the Appellant-Revenue is liable to be dismissed as none of the grounds taken by the appellant is maintainable on facts and in law. For these and other Grounds of Cross Objection that may be taken at the time of hearing, it is most respectfully prayed that the Hon ble ITAT may be pleased to dismiss the Appeal of the Revenue and allow the Cross Objections of the Respondent. 4. There was a delay of 134 days filing this Cross Objection by the assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income on 29.11.2014 for the assessment year 2013-2014. The return was processed u/s 143(1) of the I.T. Act. Subsequently, notice u/s 143(2) of the Act was issued and served on the assessee on 28.08.2015 by the Assessing Officer, i.e. ITO Ward 6(2)(2), Bangalore. In view of the change of jurisdiction, notice u/s 142(1) r.w.s. 129 of the Act dated 06.10.2015 was issued and the same was served on the assessee on 09.10.2015 by the Assessing Officer, i.e., ITO Ward 6(2)(3) Bangalore, requiring the assessee to produce the details of profit and loss account, balance sheet, business activities, books of account, ledger extract and details of bills / vouchers, additions made to fixed deposits for the financial year 2012-2013 relevant to the assessment year 2013-2014. Thereafter, the assessment was completed u/s 143(3) of the Act on 10.03.2016. The assessee went in appeal before the CIT(A) challenging that there was no proper notice issued u/s 143(2) of the Act. The CIT(A) observed that, perusal of records shows notice u/s 143(2) was issued by ITO Ward 6(2)(2) on 28.8.2015. It is noted that although assessment order was passed by ITO Ward 6(2)(3) due to transfer of cash u/s 129, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 143(2) was upto 30/09/2016 but the A.O. who was having the jurisdiction i.e; the ITO, Ward 6(4) Mohali issued the notice under section 143(2) alongwith the questionnaire under section 142(1) of the Act to the assessee on 22/05/2017. 13. On a similar issue, the Hon'ble Supreme Court in the case of ACIT And Another Vs. Hotel Blue Moon (2010) 321 ITR 362 (supra) held as under: If the Assessing Officer, for any reason, repudiates the return filed by an assessee in response to notice under section 158BC(a) of the Income Tax Act, 1961 relating to a block assessment, the Assessing Officer must necessarily issue notice under section 143(2) of the Act within the time prescribed in the proviso to section 143(2). It has further been held as under: Omission on the part of the assessing authority to issue notice under section 143(2) cannot be a procedural irregularity and is not curable. Therefore, the requirement of notice under section 143(2) cannot be dispensed with. 14. As regards to curing the defect under section 292B of the Act the Hon'ble Jurisdictional High Court in the case of CIT Vs. Norton Motors (supra) held as under: A reading o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. Thus, it is an admitted fact that the ITOWard 6(2)(3) Bangalore has never issued any notice u/s 143(2) of the Act to the assessee. Since there was no notice u/s 143(2) of the Act issued by the Assessing Officer, Ward 6(2)(3), the assessment framed consequently is bad in law. In our opinion, the assessment framed by the ITO Ward 6(2)(3), Bangalore is not in order on the simple reason that this was framed without giving notice u/s 143(2) of the Act. Before framing any assessment, there should be valid notice u/s 143(2) of the Act, as has been held by the Hon ble Supreme Court in the case of ACIT And Another Vs. Hotel Blue Moon (2010) 321 ITR 362 (SC) . The reliance placed by the learned DR on section 292BB of the Act is totally misconceived, as it is stated in the assessment order that the assessee has not cooperated with the A.O. and the A.O. sent hearing notices dated 02.01.2015, 16.01.2015 requesting the assessee to appear for hearing on 13.11.2015 and 26.11.2015. Since no response from the assessee, again one more notice dated 27.11.2015 was issued by the Assessing Officer by posting the case on 04.12.2015, but none appeared on behalf of the assessee. It is also intimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who passed the assessment order without issue of notice u/s. 143(2) of the Act, which according to Ld. AR, is mandatory to assume jurisdiction to frame assessment u/s. 143(3)/144 of the Act. According to ld. AR, non-issue of legally valid notice u/s 143(2) is not a curable defect, as held by the Hon ble Supreme Court in Hotel Blue Moon (supra). However, the main contention of the Ld. CIT, DR opposing this legal issue raised by the assessee is that, the assessee s principal office continues to be situated at 26 Rajendra Place, New Delhi, which falls under the territorial jurisdiction of the ACIT, Circle-21, New Delhi, and thus he had concurrent jurisdiction over the assessee s case, as envisaged for the purposes of Section 120 and 124 of the Act. According to the Ld. CIT, DR, even as per section 127 of the Act, which deals with the transfer of jurisdiction of a case, sub-section (4) of section 127 stipulates that there is no necessity to re-issue of any statutory notices already issued by the AO or AO from whom the case is transferred. According to ld. CIT, DR therefore, since the admitted position is that ACIT, Circle-21, New Delhi was having territorial jurisdiction over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.11.2017 Pr.CIT, Central Patna passed order u/s 127 centralizing the assessee s case with ACIT, Central Circle 3(1), Kolkata under the charge of Pr.CIT, Central 2, Kolkata. 11 09.11.2017 ACIT, Central Circle 3(1), Kolkata intimates the assessee u/s 129 being the succeeding AO for A.Y. 2015-16. 12 05.12.2017 Notice u/s 142(1) issued by ACIT, Central Circle 3(1), Kolkata for AY 2015-16. 13 29.12.2017 Assessment order framed u/s 143(3) of the Act by ACIT, Central Circle 3(1), Kolkata for AY 2015-16. 12. In view of the aforesaid dates and sequence of events the first legal question to be adjudicated is, whether the ACIT, Circle-21(1), New Delhi can be said to have had concurrent jurisdiction (territorial jurisdiction) over the assessee merely because its principal office was situated at Rajendra Place, New Delhi and in that view of the matter he was competent to issue a valid notice u/s. 143(2) of the Act for AY 2015-16. This question needs to be answered in the light of the fact re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der this Act in respect of any specified area or persons or classes of persons or incomes or classes of (5) The directions and orders referred to in sub- sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply. (6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be completed to the best of the judgment of the Assessing Officer, whichever is earlier. (c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier.) (4) Subject to the provisions of sub- section (3), where an assessee calls in question the jurisdiction of an- Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub- section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub- section (1) or sub- section (2) of section 120.] 127. Power to transfer cases (1) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 129. Change of incumbent of an office Whenever in respect of any proceeding under this Act an income- tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income- tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor: Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard. 14. A bare reading of the foregoing provisions reveal that an Assessing Officer (AO) has been vested with the jurisdiction by virtue of the directions or orders issued by the Board under sub-section (1) or sub-section (2) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as stipulated therein) then if the other Income-tax authority also agrees then the question will be resolved mutually or else it will be referred to the CBDT. So, once the AO of an assessee is vested with the jurisdiction u/s. 124 read with sec. 120(1) (2) of the Act and issues statutory notices against an assessee, no person (assessee) shall be entitled to call in question the jurisdiction of an AO within the period prescribed under clauses (a), (b) and (c) of section 124(3) of the Act. We also note that sec. 124(5) saves the action of the AO who has territorial jurisdiction over the assessee in respect of the income earned by the assessee from the territorial jurisdiction vested in him by virtue of any directions or orders issued u/s. 120(1) or (2) of the Act. So, this saving provision which saves the action of an AO is limited to the income accruing or arising or received within the limits of his territorial area as conferred to him (AO) by order under sub-sec. (1) or (2) of sec. 120 of the Act and not otherwise. So, this saving provision will come into play only in the first place the AO is vested with the jurisdiction by an order/direction issued under sub-sec. (1) or (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of an assessee is transferred to take forward the proceedings from the point where the earlier jurisdictional AO had left. Here, it would be important to note the Explanation to section 127 defines the expression case . A reading of the said Explanation shows that the expression case in relation to any person, whose name is specified in the transfer order passed u/s. 127 of the Act, means all proceedings under the Act in respect of any year which may be pending on the date of such order or direction or it may have been completed on or before such date, and includes also all proceedings under the Income-tax Act which may be commenced after the date of such order or direction of any year. This definition of the expression case implies that, once a transfer is made by the authority specified in subsection (1) or (2) of section 127 of the Act who had the jurisdiction over an AO who in turn had jurisdiction over the assessee/person/entity, by virtue of direction/order issued under section 120(1) or (2) of the Act, then the entire assessment of the person i.e. pre-transfer and post-transfer as on date of transfer will stand transferred and thereafter for all purposes of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per sec. 124 read with sec. 120(1) or (2) of the Act and the ACIT, Circle 21(1), Delhi s action of issuing the statutory notice u/s. 143(2) of the Act was saved by sub-sec. (5) of section 124 of the Act read with sub-section (4) of sec. 127 of the Act. We are however unable to accept such contention for the following reasons. For adjudicating this contention, let us first examine the relevant provisions of sub-section (5) of sec. 124 of the Act and sub-sec. (4) of sec. 127 of the Act, which read as follows: Sec. 124(5):- Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub- section (1) or subsection (2) of section 120. Sec. 127(4):- The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 124(5) being overriding in nature, the ACIT Circle 21(1), New Delhi simultaneously held concurrent jurisdiction is devoid of any merit. Such interpretation is not in accord with the extant provisions of Section 124(5) read with Section 127 of the Act. In our opinion once an order u/s 127(2) was passed on 08.10.2008 by the ld. CIT-V, Delhi unconditionally transferring the jurisdiction over the appellant s case to the charge of ACIT, Central Circle 1, Ranchi; then by virtue of such an order, the jurisdiction enjoyed by ACIT at New Delhi in terms of Section 124 read with Section 120(1) (2) stood abrogated. Accordingly after 08.10.2008, the ACIT at New Delhi could not have exercised any powers conferred on the AO by the Act for the purposes of any proceedings against the appellant. 19. In this regard we find that by virtue of the transfer order passed by the ld. CITV, Delhi u/s. 127 dated 08.10.2008, the case of the assessee was transferred with immediate effect. Pursuant to such an order, the DCIT, Central Circle Ranchi became the AO who alone had valid jurisdiction over the appellant s case till even he was divested of such jurisdiction by virtue of an order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lcutta High Court in M/s. Ramshila Enterprises Pvt. Ltd. (infra) clearly held that, The jurisdiction over the subject-matter has to be conferred by law. The jurisdiction in this case had been transferred by the order dated 3rd September, 2012 by no other than the CIT Kolkata- II, Kolkata himself. Once that was done CIT Kolkata II, Kolkata lost the seisin over the matter. He became functus officio . [Emphasis given by us]Thus, the contention of the Ld. CIT, DR that the jurisdiction is an administrative issue and not a subject matter stands negated in the light of the jurisdictional High Court's specific observations (supra). 21. Coming to the next contention of the Ld. CIT, DR that since the assessee did not question the territorial jurisdiction of the AO at Delhi after it received statutory notice from him and therefore the assessee is estopped/shut-out from doing so as stipulated by sub-section (3) of sec. 124 of the Act. We however note that sub-section (3) of section 124 of the Act will come into play only when a question arises as to whether an AO has jurisdiction to assess any person u/s. 124 of the Act and the AO derives his powers from the direction or order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterprises Pvt. Ltd. (infra), 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 at Delhi (DCIT. Circle -15, New Delhi) ceased to be Assessing Officer after the date of transfer i.e. 08.10.2008 and therefore he (i.e. AO at New Delhi) 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 AO, Ranchi to AO, Delhi), which is not the case of the Revenue. In the circumstances therefore, the AO at Delhi (ACIT, Circle-21 (1), New Delhi) could not have usurped the jurisdiction when his predecessor i.e. DCIT, Circle-15(1), New Delhi was divested of it, by order dated 23 ITA No. 1224/Kol/2019 M/s. Rungta Irrigation Limited, AY- 2015-16 08.10.2008 by CIT-V, New Delhi u/s. 127 of the Act. Subsequent to the order u/s. 127 of the Act i.e., w.e.f. from 08.10.2008, the DCIT, Central Circle-1, Ranchi succeeded to the jurisdiction of the assessee and the jurisdiction continued to vest in him (AO Ranchi) till it was legally taken away by order u/s. 127 dated 03.11.2017 by Pr. CIT, Central Patna and transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner who usurped the revisional jurisdiction u/s. 263 of the Act could have validly done so, once he himself had passedan order u/s 127 of the Act in terms of which assessee s case stood transferred. The facts of the said case M/s. Ramshila Enterprises Pvt. Ltd. Vs. Pr. CIT can be summarized as follows:- Sl. No. Date Events 1. 21st May, 2010 Assessment u/s 147/143(3) by ITO, Wd.4(1), Kolkata (for AY 2008-09) 2. 3rd September, 2012 CIT, Kolkata-II transferred the jurisdiction over the assessee to ACIT/DCIT, Central Circle-XIX, Kolkata for better co-ordination, effective investigation and meaningful assessment, consequent to a search conducted on 17th November, 2011 upon M/s.Atha Mines (AY 2012-13). 3. 18th March, 2013 ACIT/DCIT, Central Circle-XIX, Kolkata issued sec.143(2) notice to assessee. 4. 29th July, 2013 Actual transfer of files took place from ITO, Wd.4(1), Kolkata to ACIT/DCIT, Central Circle XIX, Kolkata. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. 24. Aggrieved by the aforesaid order of the Tribunal, the assessee M/s.Ramshila Enterprises Pvt. Ltd. preferred an appeal before the Hon ble jurisdictional High Court, Calcutta wherein the following question of law raising the jurisdictional issue similar to that raised by the assessee before us, was framed as under:- Whether the Tribunal was justified in holding that the Commissioner of Income Tax, Kolkata-II, had jurisdiction over the appellant at the time of issue of the Show Cause notice on 18th March, 2013 and passing of the order on 26th March, 2013 under section 263 of the Income Tax Act, 1961 in spite of transfer of jurisdiction to the Commissioner of Income Tax, Central Circle, Kolkata vide an order dated 3rd September, 2012 under section 127 (2)(a) of the said Act and its purported findings in that behalf are arbitrary, unreasonable and perverse?. 25. In this case which is reported as M/s.Ramshila Enterprises Pvt. Ltd. Vs. Pr. CIT (2016) 383 ITR 546 (Cal), we note that the gist of department s contention was taken note by the Hon ble High Court, which is as under: Mr. Ghosal, learned senior advocate appearing for the Revenue submitted that the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a notice under section 143(2) pertaining to the assessment year 2012-2013. He submitted that the order dated 3rd September, 2012 transferring jurisdiction to a ACIT/DCIT, Central Circle-XIX, Kolkata had already become operative and was also acted upon.Therefore, CIT, Kolkata-II, Kolkata could not have exercised jurisdiction.The impugned order passed by him is altogether without jurisdiction and is, therefore, a nullity. He drew our attention to a judgment of the Apex Court in the case of Pandurang and Others versus State of Maharashtra reported in (1986) 4 SCC436for the proposition that even a right order by a wrong forum is a nullity. In the aforesaid judgment their Lordship held as follows: 4.When a matter required to be decided by a Division Bench of the High Court is decided by a learned Single Judge, the judgment would be a nullity, the matter having been heard by a court which had no competence to hear the matter, it being a matter of total lack of jurisdiction. The accused was entitled to be heard by at least two learned Judges constituting a Division Bench and had a right to claim a verdict as regards his guilt or innocence at the hands of the two learned Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue for better coordination, effective investigative and meaningful assessment. The actual transfer of files may have taken place on 29th July, 2013 but admitted position is that a notice under Section 143(2) by the transferee assessing officer was issued on 18th March, 2013. The existence of files does not confer the jurisdiction when the same has validly been transferred and also acted upon. The jurisdiction over the subject-matter has to be conferred by law. The jurisdiction in this case had been transferred by the order dated 3rd September, 2012 by no other than the CIT Kolkata- II, Kolkata himself. Once that was done CIT Kolkata II, Kolkata lost the seisin over the matter. He became functus officio . Reference in this regard may be made to the Stroud s Judicial Dictionary of Words and Phrases, 7th Edition, Page 1085 wherein the following meaning has been expressed: FUNCTUS OFFICIO. An arbitrator or referee cannot be said to be functus officio when he has given a decision which is held to be no decision at all (Davies v Howe Spinning Co LTD.27 B.W.C.C.207). Where a judge has made an order for a stay of execution which has been passed and entered, he is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o impound the instrument. The matter is really concluded by the decision of the Supreme Court in Govt. of Uttar Pradesh v. Mohammad Amir Ahmad Khan, AIR1961SC787 That was a case where the question arose whether the Collector has any power to impound an instrument sent to him for adjudication under section 31 of the Stamp Act. The Supreme Court held that under that section the Collector had no such power, as the provision gave him the power only to give his opinion as regards the duty with which in his judgment the instrument was chargeable and when that function was performed by the Collector he became functus officio. It was observed by the Supreme Court that the power to impound only exists when an instrument is produced before judicial officers or other officers performing judicial functions as evidence of any fact to be proved, or before other public officers who have to perform any function in regard to those instruments as, for example, registration. The Supreme Court also approved the decisions in Collector, Ahmednagar v. Rambhau, AIR 1930 Bom 392 (FB). Paiku v. Gaya, ILR (1948) Nag 950 : (AIR1949Nag 214) and Panakala Rao v. Kumaraswami, AIR 1937Mad 763 where the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-rule (1) provides that the court, after the case has been heard, shall pronounce judgment in an open court either at once, or as soon thereafter as may be practicable, and when the judgment is to be pronounced on some future day, the court shall fix a day for that purpose of which due notice shall be given to the parties or their pleaders. Subrule (3) provides that the judgment may be pronounced by dictation in an open court to a shorthand writer [if the Judge is specially empowered (sic by the High Court) in this behalf].The proviso thereto provides that where the judgment is pronounced by dictation in open court, the transcript of the judgment so pronounced shall, after making such corrections as may be necessary, be signed by the Judge, bear the date on which it was pronounced and form a part of the record. Rule 3 provides that the judgment shall be dated and signed by the Judge in open court at the time of pronouncing it and when once signed, shall not afterwards be altered or added to save as provided by Section 152 or on review. Thus, where a judgment is reserved, mere dictation does not amount to pronouncement, but where the judgment is dictated in open court, that itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Calcutta, we understand that in this case after the order u/s. 127 of the Act dated 03.09.2012 was passed by the CIT-2, Kolkata, he became functus officio and therefore the Hon ble High Court held that he could not have exercised jurisdiction over the assessee s case u/s. 263 of the Act and consequently therefore he erred in passing an order dated 26.03 2013 u/s 263 setting aside the order of the ITO, Ward-4(1), Kolkata dated 21.05.2010. 29. Coming back to the case in hand, and having taken note of the ratio laid down by the Hon ble jurisdictional High Court (supra), we note that in the present case, after the order of the CIT-V, New Delhi dated 08.10.2008 transferring the jurisdiction of the assessee s case to DCIT, Central Circle, Ranchi, the CIT, Delhi became functus officio and thereby his subordinate officers viz., ACIT, Circle 21(1), New Delhi, could not have issued notice u/s. 143(2) dated 28.07.2016 and in that view of the matter the notice issued by the ACIT, Circle-21(1), New Delhi u/s 143(2)was without jurisdiction and, therefore, non-est in the eyes of law. 30. Our above finding also finds support from the decision of this Tribunal in the case of Chankya Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction as it is based on the notice u/s. 148 of the I. T. Act, 1961 issued by the ITO Delhi. We have requested the AO at Kolkata to issue the copy of the order of 127 and 151 of the I.T. Act, 1961 but the same has not been issued yet. We therefore request you to either, call for the records and adjudicate the validity of reopening or grant an adjournment of 15 days to obtain certified copies of all related records so that we can represent the matter properly. The CIT(A) sent this written submission to ITO, Ward-6(1), Kolkata vide letter No. CIT(A)-VI/Kol/Remand/2011-12/368 dated 20-02-2010 and the AO sent its remand report vide letter No. Wd6(1)/Kol/ChanakyaFinvest/11-12/826 dated 23-04-2010, which is as under: Kindly refer to your letter No. CIT(A)-VI/Kol/Remand Report/2011-12/368 dated 20.02.2012. In this connection following information as available from the record are chronologically appended below: Date Happening 1. 04-01-10 Order u/s l27 passed by the Ld. CIT, Delhi-I, New Delhi. 2. 23-03-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate authority or Assessing Officer since these are not available with appellant. The appellant has never taken objection regarding the jurisdiction of issuance of notice u/s 148 by the Assessing Officer of New Delhi or initiation/continuation of assessment proceedings by the Income-tax Officer, Ward 6(1), Kolkata before the Assessing Officer during the assessment proceedings even when the authorised representative attended the proceedings on 08-12-2010 and 16-12-2010. The authorised representative asked for the extension of time from Assessing Officer on 20-12-2010 but did not file any objection regarding the jurisdiction of the Assessing Officer and did not attend the proceedings thereafter. The assessment has been completed on 29-12-2010. 9. The Income-tax Officer, Ward (1) has submitted that the case records were not transferred to him and was still lying with ITO Ward 3(3), New Delhi on the date of issuance of notice u/s 148. In the absence of the transfer of case records, the jurisdiction is not transferred automatically since the ITO Ward 6(1), Kolkata did not know about the order passed u/s 127 by the Commissioner of Income-tax1, New Delhi. And further, he decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down and upheld by the Hon'ble appellate authorities as discussed above, the legal provisions of section 124(3) on this issue and in the facts and circumstances of the case, it is held that the assessment order passed u/s 147/144 of the I.T. Act 1961 is not without jurisdiction and is as per law and hence the assessment order passed by the Assessing Officer is held to be a valid order. In the facts and circumstances of the case the proceedings u/s 148 of the I T Act 1961 is upheld to be valid in absence of any objection being raised before the Assessing Officer issuing the notice u/s 148 and/or completing the assessment. In the facts and circumstances of the case it is also held that appellant was given proper opportunity after serving the notice u/s 148 and during assessment by the Assessing Officer. Hence, these three grounds of appeal are dismissed. Aggrieved, assessee is in appeal before us. 5. We have heard rival submissions and gone through facts and circumstances of the case. First of all, it is to be seen that what is the chronology of events, as recorded by the AO in his remand report given, during course of appellate proceedings before CIT(A). The chr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e law of Hon'ble Allahabad High Court in the case of CIT v. British India Corpn. Ltd. [2011] 337 ITR 64 [2012] 20 taxmann.com 446, wherein assumption of jurisdiction, by AO for assessment, u/s. 124 of the Act that when the ITO had jurisdiction when assessment proceedings commenced and a draft assessment order was submitted to IAC but due to subsequent change in jurisdiction, unless the same brought to the notice of the authority concerned, the assessment would not be vitiated. We are with the argument of Ld. Sr. DR in respect to this argument that where the jurisdiction assumed by the AO, assessee has to object to the same u/s. 124 of the Act in case hr us aggrieved. But, what will be the effect of the order of Commissioner of Income-tax transferring the jurisdiction u/s. 127 of the Act. We are of the view, that when any case of a particular assessee which is transferred from one AO to another AO, whether within the state or without it, all proceedings which are pending against the assessee under the Act in respect of the same year as also previous years are meant to be transferred simultaneously and all proceedings under the Act which may be commenced after the date of such tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer in respect of any year. The word case is thus used in a comprehensive sense of including both pending proceedings and proceedings to be instituted in the future. Consequently, an order of transfer can be validly made even if there be no proceedings pending for assessment of tax and the purpose of the transfer may simply be that all future proceedings are to take place before the officer to whom the case of the assessee is transferred. 8. In view of the above principle regarding jurisdiction and facts of the present case, the order passed by CIT-1, Delhi, transferring jurisdiction from ITO, Ward-3(3), New Delhi on 04-01-2010, subsequent action of the AO i.e. ITO, Ward-3(3), New Delhi issuing notice u/s. 148 of the Act dated 25-03-2010 is invalid because the jurisdiction from ITO, Ward-3(3), New Delhi by CIT-1, Delhi to ITO, Ward-6(1), Kolkata. At the time of passing of order by CIT-1, Delhi transferring jurisdiction from ITO, Ward3(3), New Delhi dated 04-01-2010 to ITO, Ward-6(1), Kolkata, there is no proceedings pending before the ITO, Delhi and the transfer order for jurisdiction was passed on that date. The CIT, Delhi-1 passed order u/s. 127 of the Act on 01-01-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by its letter dated 24.04.2012 objected to the impugned notice by specifically stating that pursuant to the order of CIT dated 22.11.2011, the ACIT-10(1) would have no locus standi or jurisdiction to issue the impugned notice dated 30.03.2012. As there was no reply, the present writ petition is filed inter alia on the ground that once the jurisdiction to assess/reassess the petitioner vested in the ACIT-10(1) is divested by the order of the CIT-10 Mumbai dated 22.11.2011, the ACIT-10(1) Mumbai would cease to have power to assess or reassess the petitioner and hence, the impugned notice issued by ACIT-10(1) Mumbai being without jurisdiction is liable to be quashed and set aside. 7. In the affidavit-in-reply filed by the DCIT-10(1) Mumbai dated 8.10.2012 it is stated that by a corrigendum order dated 27.03.2012, the CIT-10 Mumbai has temporarily withdrawn/cancelled the earlier transfer order dated 22.11.2011 for the sake of administrative convenience and therefore, the notice dated 30.03.2012 would be valid. It is the case of the petitioner that neither any notice to pass a corrigendum order was issued to the petitioner nor the alleged corrigendum order dated 27.03.2012 has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai is highly deplorable. Once the jurisdiction to assess the petitioner was transferred by the CIT-10 Mumbai from ACIT-10(1) Mumbai to DCIT Circle-1(2) Pune by order dated 22.11.2011 it was totally improper on the part of ACIT-10(1) Mumbai to request the CIT-10, Mumbai to pass a corrigendum order with a view to circumvent the jurisdictional issue. Making such a request on the part of ACIT-10(1) Mumbai to the CIT-10 Mumbai in our opinion, was in gross abuse of the process of law. If there was any time barring issue, the ACIT-10(1) Mumbai ought to have asked his counterpart at Pune to whom the jurisdiction was transferred to take appropriate steps in the matter instead of taking steps to circumvent the jurisdictional issue. It does not befit ACIT-10(1) Mumbai to indulge in circumventing the provisions of law and we strongly condemn the conduct of ACIT-10(1) Mumbai in that behalf. Instead of bringing to book the persons who circumvent the provisions of law, the ACIT-10(1) Mumbai has himself indulged in circumventing the provisions of law which is totally disgraceful. 15. In any event, the CIT-10 Mumbai ought not to have succumbed to the unjust demands of ACIT10(1) and instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ICICI Bank, Noida. In that case the fact that the assessee was regularly assessed in Delhi was not intimated to the AO at Noida nor did the assessee mention his PAN with the ICICI Bank. Even the assessee s address available with the bank was that of Noida. In this case it was not brought on record by the assessee that his case was transferred to Delhi by virtue of an order u/s 127 passed by the competent authority under whom the AO at Noida was functioning. The Court further found that it was only after the period of limitation prescribed in Section 149 expired on 31st March, 2016, that the assessee intimated the AO at Noida that he had been regularly assessed in Delhi. On these facts, the Hon'ble Delhi High Court held that it was mala fide on the part of the assessee not to intimate the AO at Noida prior to 31.03.2016 and that the assessee waited for the period of limitation to expire before raising this objection. In absence of any order u/s 127 and having noted that with reference to address made available by the assessee to ICICI Bank in which cash deposits were found, the Hon'ble High Court held that assessee was debarred from raising the objection to AO s jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be considered in the light of the questions which were before the Court. A decision of the Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a latter case, the Courts must carefully try to ascertain the true principle laid down by the decision of the Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by the Court, to support their proceedings. 35. Coming back to the admitted facts in the present case, we hold that the ACIT, Central Circle-3(1), Kolkata framed the assessment order dated 29.12.2017 pursuant to transfer of case orderedby PCIT, Central Patna dated 03.11.2017 u/s. 127 of the Act, without there being valid issuance of notice u/s 143(2) of the Act. In our opinion such an order is bad in law as held by the Hon ble Supreme Court in CIT V Hotel Blue Moon (2010) 321 ITR 362 (S.C) wherein the Hon ble Supreme Court has 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 def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -sections (2) and (3) of Section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the Revenue, since we do not see any reason to restrict the scope and meaning of the expression so far as may be, apply . In our view, where the assessing officer in repudiation of the return filed under Section 158-BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143. 6. The question, however, remains whether Section 292BB which came into effect on and from 01.04.2008 has effected any change. Said Section 292BB is to the following effect:- 292BB. Notice deemed to be valid in certain circumstances.-Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was (a) N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the findings rendered. by the High Court and the Tribunal and the conclusion arrived at were correct. We, therefore, see no reason to take a different view in the matter. 36. For the reasons set out above therefore, we uphold the objections raised by the appellant against the validity of the impugned order u/s 143(3) for AY 2015-16. We accordingly hold that since in the present case no valid notice u/s 143(2) was issued by the AO who held jurisdiction over the case of the appellant, the consequent order passed u/s 143(3) dated 29.12.2017 was legally unsustainable and therefore is null in the eyes of law and therefore quashed. The assessee accordingly succeeds on the preliminary legal issue raised before us. 37. In the result, appeal of assessee is allowed. 11. In view of the above, and respectfully following the order of the ITAT Kolkata Benches (supra), we quash the assessment and allow the Cross Objection filed by the assessee. 12. Since we have quashed the assessment on the legal grounds, we are refrain from adjudicating the grounds raised by the Revenue in its appeal. 13. In the result, the appeal filed by the Revenue is dismissed and the Cross Objection ..... X X X X Extracts X X X X X X X X Extracts X X X X
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