9911796707
TMI Blog2025 (5) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has raised additional grounds of appeal which reads as under: "Additional Gr. No.1: "On the facts and circumstances of the case and in law, notice issued u/s. 143(2) dt. 22-9-18 by ITO-4(3); assessment made u/s. 143(3) dt. 30-12-19 by ITO-3(3); there is violation of sec. 127(1) & 127(3); there is no mention of order u/s. 127 by PCIT for transferring the case from ITO-4(3) to ITO-3(3) for assuming valid jurisdiction by ITO-3(3); in absence of order made u/s. 127 by PCIT for transferring the case to ITO-3(3); assessment made u/s. 143(3) by ITO-3(3) would be invalid as without having valid jurisdiction for making assessment u/s. 143(3), is liable to be quashed." Additional Gr. No.2: "On the facts and circumstances of the case and in law, notice issued u/s 143(2) by ITO-4(3) dt. 22-9-18 who was not having territorial jurisdiction as per sec 124(1) rws.120(2) & 120(3) to make assessment for AY17-18 as per Notification No.1/14-15 dt. 15-11-14; in absence of a valid notice issued u/s 143(2) by the 'correct jurisdictional AO' i.e., ITO-3(3) as per sec 124(1), 120(2), 120(3); assessment made u/s 143(3) would be invalid and is liable to be quashed; relied on Hotel Bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jecting the books of account of the assessee made an addition of Rs. 3 lacs (out of cash deposits of Rs. 25 lacs), and determined the income of the assessee at Rs. 8,33,700/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. The CIT(Appeals) holding a firm conviction that as the cash deposit of Rs. 25 lacs on a single day was abnormal as against her total turnover for the year under consideration of Rs. 53.65 lacs (approx.), upheld the addition made by the A.O observing as under: "5.1 On perusal of submissions of the appellant, the appellant had an annual turnover or Rs. 53,65,581/-. The appellant stated that she made cash deposits of Rs. 35,49,000/- during the year under consideration. The AO further noticed that an amount of Rs, 25,00,000/- was deposited on a single day when the assessee was in practice of depositing the cash every month. 5.2 The single day cash deposit of Rs. 25,00,000/- is abnormal when compared to the total turnover of the appellant i.e. Rs. 53,65,581/-. In this context the reply of the appellant reply during the assessment proceedings is reproduced for sake of ready reference: The assessee replied tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al ground of appeal before the Tribunal, which involves purely a question of law and requires no further verification of facts, then, the same merits admission finds support from the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC). 8. Shri Sunil Kumar Agrawal, Ld. Authorized Representative (for short 'AR') for the assessee at the threshold submitted that though the notice u/s. 143(2) of the Act was issued by the ITO-4(3), Raipur on four occasions, i.e. on 22.09.2018, Page 1 to 4 of APB, 26.09.2018, Page 5 to 8 of APB, 26.09.2018, Page 9-12 of APB and 30.09.2018, Page 13 to 16 of APB, but the assessment had thereafter been framed by the A.O i.e. ITO- 3(3), Raipur vide his order u/s. 143(3) of the Act, dated 30.12.2019. Elaborating further, the Ld. AR submitted that as no order of transfer u/s. 127 of the Act had been passed based on which, the case of the assessee was transferred by the ITO-4(3), Raipur to ITO-3(3), Raipur, therefore, the impugned assessment order passed u/s. 143(3) of the Act, dated 30.12.2019 by the ITO-3(3), Raipur being devoid and bereft of any valid assumption of jurisdiction was lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AR in order to dislodge the claim of the A.O had placed on record a copy of the screen shot of the e-proceeding sheet in the case of the assessee for the subject year. 11. Be that as it may, the Ld. AR submitted that as no order of transfer u/s. 127 of the Act wherein the case of the assessee was transferred from ITO-4(3), Raipur to ITO-3(3), Raipur was passed, therefore, in absence of valid assumption of jurisdiction, the assessment framed by the ITO-3(3), Raipur vide his order u/s. 143(3) of the Act, dated 30.12.2019 being devoid and bereft of any force of law was liable to be quashed. 12. I have given a thoughtful consideration to the facts involved in the present case before me. As stated by the Ld. AR, and rightly so, I find that the till date despite specific direction the department has failed to place on record any order of transfer u/s. 127 of the Act, based on which, the case records of the assessee were transferred from ITO-4(3), Raipur to ITO-3(3), Raipur. In my view, the framing of assessment by the ITO-3(3), Raipur in absence of any valid order of transfer u/s. 127 of the Act in absence of any valid assumption of jurisdiction by the latter cannot be sustained an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (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 Officer or Assessing Officers from whom the case is transferred." (emphasis supplied by me) 14. Admittedly, it is a matter of fact borne from the record that though the Notice u/s 143(2), dated 29.07.2016, Page 1 of APB was issued by the ITO- 2(1), Raipur but thereafter the assessment had been framed vide order passed u/s. 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of recording of the reasons for doing so by the concerned authority. As such, in the case before me, where jurisdiction over the case of the assessee had been transferred to ITO-4(2), Raipur from ITO-2(1), Raipur, i.e. within the same city, though no requirement of affording a reasonable opportunity of being heard to the assessee was required, but the pre-condition contemplated under sub- section (1) of Section 127 of the Act, i.e., recording of reasons for doing so by the appropriate authority could not have been done away with. 16. My aforesaid view that as per the mandate of law, a transfer order is statutorily required to be passed by the prescribed authority u/s. 127 of the Act, and an A.O cannot on his own transfer an income tax file to another officer in the absence of the aforesaid order is squarely covered by the judgment of the Hon'ble High Court of Calcutta in the case of Kusum Goyal Vs. ITO and Ors. (2010) 329 ITR 283 (Cal). For the sake of clarity, the observations of the Hon'ble High Court are culled out as under: "The question which falls for consideration is whether under section 127 of the Act an Assessing Officer on his own can transfer an income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lities are required to be complied with, the opportunity of hearing as postulated in section 127 (1) and (2) in case of inter city transfer, is not required. Now keeping the position of law in mind let the letter/notice dated 21st October, 2009 issued by the respondent no.2 be examined. In order to appreciate the issue it is necessary to refer to the relevant portion of the impugned intimation issued by the respondent no.2 which is as under: "Since your income has exceeded minimum threshold limit of Rs. 10 lac for the assessment year 2007-2008, the jurisdiction to/of your case automatically gets vested with the Jurisdictional DCIT-Circle-54, Kolkata as per above Directives. You are kindly informed hereby that no order u/s 127 of the Income Tax Act 1961 by the Ld. Commissioner of Income Tax - XIX, WB is required to be passed for getting the assessment records transferred from ITO Ward- 54(2), Kolkata to DCIT Circle-54, Kolkata by virtue of the provisions of sub-section 3 of section 127 of the Income Tax Act, 1961. For your ready reference the provisions of the said section is appended below. Section 127 sub-section (3) of the Income Tax Act, 1961 states/reads as: ...... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 81 of 2010 is also allowed. No order as to costs" (emphasis supplied by me) 17. Also, a similar issue had been dealt with by the ITAT, Raipur in the case of Roop Das Vs. ITO, Ward-2(1), Bhilai, ITA Nos. 310 & 311/RPR/2023 dated 09.04.2024 wherein, the Tribunal after relying on the judgments of the Hon'ble Supreme Court in the case of Ajanta Industries Vs. Central Board of Direct Tax supra) and that of the Hon'ble High Court of Calcutta in the case of Kusum Goyal Vs. ITO & Ors. (supra) had decided the issue in favor of the assessee, observing that a transfer order is statutorily required to be passed by the prescribed authority u/s. 127 of the Act, and an A.O cannot on his own transfer an income tax file to another officer in absence of the aforesaid order u/s. 127 of the Act. For the sake of clarity, the observations of the Tribunal are culled out as under: "11. Apropos the claim raised by the A.O, i.e. ITO-2(1), Bhilai in her letter dated 14.03.2024 (supra) that as the jurisdiction over the assessee's case remained within the same range, therefore, there was no requirement for the Pr. CIT to pass any order of transfer u/s. 127 of the Act, the same is found to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. It was further observed that recording of reasons and disclosure thereof is not a mere idle formality. The Hon'ble Apex Court observed that now when law requires reasons to be recorded in a particular order affecting prejudicially the interests of any person, who can challenge the order in court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated. For the sake of clarity, the relevant observations of the Hon'ble Apex Court are culled out as under: "We are clearly of opinion that the requirement of recording reasons under section 127(1) is a mandatory direction under the law and non-communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee." (emphasis supplied by me) 13. Also, my aforesaid view that as per the mandate of law, a transfer order is statutorily required to be passed by the prescribed authority u/s. 127 of the Act, and an A.O cannot on his own transfer an income tax file to another officer in absence of the aforesaid order is squarely covered by the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place." (Emphasis supplied ) From a reading of the language of section 127(3) it is evident that when a file is transferred from one assessing officer to another whose offices are located in the same city, locality or place, though other statutory formalities are required to be complied with, the opportunity of hearing as postulated in section 127 (1) and (2) in case of inter city transfer, is not required. Now keeping the position of law in mind let the letter/notice dated 21st October, 2009 issued by the respondent no.2 be examined. In order to appreciate the issue it is necessary to refer to the relevant portion of the impugned intimation issued by the respondent no.2 which is as under: "Since your income has exceeded minimum threshold limit of Rs. 10 lac for the assessment year 2007-2008, the jurisdiction to/of your case automatically gets vested with the Jurisdictional DCIT-Circle-54, Kolkata as per above Directives. You are kindly informed hereby that no order u/s 127 of the Income Tax Act 1961 by the Ld. Commissioner of Income Tax - XIX, WB is required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 127(3), the letters/notices under challenge are set aside and quashed. The writ petition is allowed. Consequential proceedings are also set aside and quashed. Accordingly, the notice dated 6th January, 2010 regarding the penalty proceedings under section 271(1)(c) for the assessment year 2006-07 is also set aside and quashed. The application being G.A.No. 81 of 2010 is also allowed. No order as to costs" (emphasis supplied by me) 14. As in the case before me no order of transfer u/s. 127(1) of the Act had been shown to have been passed, and in fact, the case of the assessee had been transferred simplicitor on the basis of a letter dated 11.04.2018 addressed by ITO-1(4), Bhilai to ITO-2(1), Bhilai; therefore, it is a clear case of invalid assumption of jurisdiction on the part of the ITO-2(1), Bhilai who in absence of any valid assumption of jurisdiction had framed the assessment vide his order u/s. 147 r.w.s. 144 of the Act, dated 30.11.2018. I, thus, in terms of my aforesaid observations quash the assessment framed by the ITO-2(1), Bhilai u/s. 147 r.w.s. 144 of the Act dated 30.11.2018 for want of valid assumption of jurisdiction on his part. 15. As I have quashed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment u/s. 144 of the Act which omission on the part of AO also is against principles of natural justice and the impugned assessment u/s 144 of the Act is fragile for non-adherence of principles of natural justice on the part of AO. Therefore, looking from any angle as discussed above and especially taking note that the impugned assessment order passed by the ITO, Wd-6(1), Kolkata without issuing notice u/s. 143(2) of the Act is corum non-judice and therefore null in the eyes of law and, therefore, need to be quashed and we quash the impugned assessment order dated 13.03.2015 passed by ITO, Wd-6(1), Kolkata. The additional grounds raised by the assessee are allowed." 19. As in the case before me no order of transfer u/s. 127(1) of the Act had been shown to have been passed, therefore, it is a clear case of invalid assumption of jurisdiction by the ITO-4(2), Raipur who in absence of any valid assumption of jurisdiction had framed the assessment vide his order u/s. 143(3) of the Act, dated 27.12.2017. As the facts and issues involved in the present appeal remain the same as were involved in the aforesaid cases, therefore, following the same parity of reasoning, I quash the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
