TMI Blog2020 (12) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer 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 jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e original AO as per section 124 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) was the ITO, Ward-5(3), Kolkata and he had legally passed the reassessment order u/s. 147/143(3) of the Act dated 29.09.2010 by making an addition of ₹ 20,640/- against assessee's Returned Income of ₹ 1060/-. According to Ld. A.R. on 22.03.2011, the name of the assessee company got changed from M/s. Alter Towers Pvt. Ltd. to M/s. OSL Developers Pvt. Ltd. and drew our attention to page 3 of the paper book where the copy of fresh Certificate of Incorporation consequent upon change of name has been issued by the Assistant Registrar of Companies, West Bengal is found placed therein in the PB. Further, it was brought to our notice that on 25/26.08.2011 search u/s. 132 of the Act was conducted in the assessee's premises. Thereafter on 28.08.2012 consequent to the search on 25.08.2011, the Ld Commissioner of Income Tax, Kolkata-II, (hereinafter CIT-II) exercising his powers u/s. 127 of the Act, transferred the jurisdiction of assessment from ITO, Ward-5(3), Kolkata to DCIT/ACIT, Central Circle-XVII, Kolkata (hereinafter DCIT, CC-XVII, Kolkata) on the request of the Ld Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation Ltd. vs. ACIT in ITA No. 1224/Kol/2019 for AY 2015-16 dated 06.09.2019, wherein the Tribunal relied upon the order of the Jurisdictional High Court in the case of M/s. Ramshila Enterprise 383 ITR 546 (Cal) and upheld the contention of assessee on similar legal issue. So, he relied on the decisions of the Hon'ble High Court of Calcutta in M/s. Ramshila Enterprises (supra) and that of the Tribunal in M/s. Rungta Irrigation Ltd. (supra). In the light of the aforesaid submission and in the light of case laws it was urged by the Ld. AR that since the reassessment order dated 25.03.2014 passed by ITO, Ward-5(3), Kolkata is bad in law and it may be held as ab initio void. 3. Per contra, the Ld. CIT, DR Shri Imokaba Jamir vehemently opposed the plea of the Ld. A.R. of the assessee. According to him, the assessee is estopped from challenging the jurisdiction of ITO, Ward-5(3) as per sub-section (3) of section 124 of the Act, unless the assessee had duly raised the question of jurisdiction of AO within a month of receipt of statutory notices u/s. 142(1)/143(2)/148/153/153C of the Act. And since the assessee has not bothered to raise such objection to the notice of Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his assessment year (AY 2008-09) Paper book, page 2 6. 28.03.2013 Pr. CIT, Kol-II order u/s. 263 setting aside order of ITO, Ward-5(3) dated 29.09.2010 for de novo assessment 7. 25.03.2014 Reassessment order framed by ITO, Ward-5(3) giving effect to the order of Pr. CIT u/s. 263 dated 28.03.2013 which is the impugned order of AO before us, which action of AO/ITO confirmed by Ld. CIT-17 is in appeal before us. Vide copy of assessment order filed with appeal 8. 31.03.2014 Reassessment u/s. 153A/143(3) for the same assessment year (AY 2008-09) completed by DCIT, Central Circle-XVII. Paper book pages 10-12 9. 31.05.2016 Case of assessee retransferred u/s. 127 by Pr. CIT-I from DCIT, Central Circle to ITO 5(3). Paper-book page 24-26 (item no. 39, page 25). 5. In view of the aforesaid dates and sequence of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is 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 notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection (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 subsection (2) of section 120.] 127. Power to transfer cases (1) The Pr. Director General or Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection 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. 7. A bare reading of the foregoing provisions reveal that an Assessing Officer (hereinafter 'AO') has been vested with the jurisdiction to assess the income of an assessee by virtue of the directions or orders issued by the Board under sub-section (1) or sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned (Principal/Directors General or Principal/Chief Commissioners or Principal/Commissioners as stipulated therein) and in the event the other Income-tax authority also agrees, then the question will be resolved mutually or else it will be referred to the CBDT. So, as per the scheme of the Act it can be noted that once the AO of an assessee is vested with the jurisdiction u/s. 124 read with sec. 120(1) (2) of the Act, and he gets jurisdiction to assess the income of an assessee by issues statutory notices against the assessee in accordance to law. And no person (assessee) shall be entitled to call in question the jurisdiction of an AO unless made within the period prescribed under clauses (a), (b) and (c) of section 124(3) of the Act [i.e., within one month]. 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 te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in sub-section (1) or (2) of section 127 of the Act, can be done at any stage of the proceedings, and by virtue of this transfer order, the AO to whom the case is transferred need not re-issue notice already issued by the earlier AO or AOs from whom the case is transferred. In other words, Section 127(4) saves the actions of the AO from whom the case is transferred and allows the AO to whom the case 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 which 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 tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcle-XVII, Kolkata, the scanned copy of the order of Ld CIT-II dated 28.08.2012 passed u/s. 127 of the Act is as under;-. From the plain reading of the order u/s. 127(2) dated 28.08.2012, we find that the transfer of jurisdiction over the appellant's case from the charge of ITO, Ward-5(3), Kolkata to DCIT/ACIT, Central Circle-XVII, Kolkata was absolute and without reserving any right of concurrent jurisdiction over the appellant to ITO, Ward-5(3), Kolkata. Further, this fact is clear by the re-transfer order of assessee's case latter passed on 31.05.2016 by pr. CIT-I u/s. 127 of the Act from DCIT, CC-XVII, Kolkata to ITO, Ward-5(3). 10. Before us the Ld. CIT, DR vehemently contented that since the present assessee's principal office is within the territorial jurisdiction of ITO, Ward-5(3), the AO i.e., ITO Ward-5(3) continued to have jurisdiction as per section 124 read with section 120(1) or (2) of the Act and, therefore, ITO, Ward-5(3) enjoyed jurisdiction to pass the reassessment order dated 25.03.2014 and his action was saved by section 124(5) of the Act. We are, however, unable to accept such contention for the following reasons. For adjudicating this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder issued under sub-section (1) or (2) of section 120 of the Act to another AO who is not vested with such jurisdiction as per direction/order issued u/s. 120(1) and (2) of the Act; then by virtue of such transfer order u/s. 127 of the Act, the jurisdiction of an AO u/s. 124 vested by virtue of an order/direction vested on an AO as per sec. 120(1) or (2) of the Act is taken away and thus the original AO is divested of the jurisdiction enjoyed u/s. 124 read with sub-sec. (1) or (2) of section 120 of the Act. We therefore hold that contention put forth by the ld. CIT, DR that provisions of Section 124(5) being overriding in nature, the ITO, Ward-5(3), Kolkata simultaneously held concurrent jurisdiction is devoid of any merit. Such interpretation is not in accordance with the extant provisions of Section 124(5) read with Section 127 of the Act. In our opinion in the facts of this case, once the order u/s. 127(2) was passed on 28.08.2012 by the Ld. CIT-II, Kolkata unconditionally transferring the jurisdiction over the appellant's case to the charge of DCIT/ACIT, Central Circle-XVII, Kolkata; then by virtue of such an order, the jurisdiction enjoyed by ITO, Ward-5(3), Kolkata in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the time period prescribed under sub-section (3) of sec. 124 of the Act lapses. This however is not applicable to the facts of the appellant's case. Admittedly the AO i.e. ITO, Ward-5(3) had enjoyed jurisdiction u/s. 124 of the Act by virtue of direction or order issued by CBDT and/or authorities under sub-section (1) or (2) of section 120 of the Act was legally divested of his jurisdiction over the appellant's case by virtue of the order u/s. 127 of the Act dated 28.08.2012, and thereafter ITO, Ward-5(3), Kolkata could not have suo moto assumed jurisdiction u/s. 124 of the Act, since he became 'functus officio'. In our opinion therefore 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 of the Act 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 di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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