Block assessment jurisdiction cannot be cured retrospectively by later transfer orders or mere participation in proceedings.

Jurisdiction under the block assessment regime depends on the officer being the Assessing Officer when the section 158BC notice is issued. Where the earlier transfer order under section 127 had already been quashed, the officer issuing the notice lacked jurisdiction, and a later transfer order could not retrospectively cure that defect or validate the notice and assessment. Section 124(3) did not bar the objection because the return was filed in response to the section 158BC notice, and mere participation in the proceedings did not amount to a waiver that could create jurisdiction where none existed.

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Issues: Whether the assessee could challenge the jurisdiction of the Assessing Officer in relation to a block assessment notice issued under section 158BC of the Income-tax Act, 1961, and whether participation in the proceedings or a subsequent transfer order could validate the notice and assessment.

Analysis: The dispute turned on the meaning and interplay of sections 2(7A), 124(3), 127 and 158BC of the Income-tax Act, 1961. The notice under section 158BC was issued after the earlier transfer order under section 127 had already been quashed, so the officer issuing the notice was not the Assessing Officer on that date. Section 124(3) did not bar the challenge because the return was filed in response to a section 158BC notice and not in the manner contemplated by that provision for the jurisdictional bar. The subsequent order under section 127 could not retrospectively confer jurisdiction or validate a notice issued when jurisdiction was absent. Mere participation in the assessment proceedings did not amount to a waiver capable of creating jurisdiction where none existed.

Conclusion: The jurisdictional objection was maintainable, the notice and assessment were without authority, and the issue was answered in favour of the assessee.

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