Assessing Officer's Late Notice Deemed Void; Jurisdiction Issue Decided

The Tribunal held that the Assessing Officer (AO) did not have jurisdiction to issue a notice under Section 143(2) after the transfer of the appellant's case to another jurisdiction. As a result, the assessment order based on the invalid notice was deemed null and void. The appeal was allowed in favor of the appellant.

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Issues Involved:
1. Jurisdiction of the Assessing Officer (AO) to issue notice under Section 143(2).
2. Validity of the assessment order under Section 143(3) in the absence of a valid notice under Section 143(2).
3. Applicability of Section 124(5) and Section 127(4) of the Income Tax Act.
4. The effect of transfer orders under Section 127 on the jurisdiction of the AO.
5. The role of Section 292BB in curing defects in the service of notice.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Assessing Officer (AO) to issue notice under Section 143(2):
The appellant was initially assessed by the DCIT, Circle-15(1), New Delhi. However, by an order dated 08.10.2008, the jurisdiction was transferred to the DCIT, Central Circle-1, Ranchi. For the assessment year 2015-16, the ACIT, Circle-21(1), New Delhi issued a notice under Section 143(2) on 28.07.2016. The appellant objected, arguing that the ACIT, Circle-21(1), New Delhi did not have jurisdiction over its case after the transfer order. The Tribunal held that the ACIT, Circle-21(1), New Delhi did not have concurrent jurisdiction and could not issue a valid notice under Section 143(2) after the transfer of jurisdiction to Ranchi.

2. Validity of the assessment order under Section 143(3) in the absence of a valid notice under Section 143(2):
The Tribunal emphasized that the issuance of a valid notice under Section 143(2) is a prerequisite for framing an assessment under Section 143(3). Since the ACIT, Circle-21(1), New Delhi did not have jurisdiction, the notice issued by him was invalid. Consequently, the assessment order passed by the ACIT, Central Circle-3(1), Kolkata, based on the invalid notice, was also deemed null and void.

3. Applicability of Section 124(5) and Section 127(4) of the Income Tax Act:
The Tribunal examined the provisions of Section 124(5) and Section 127(4). Section 124(5) allows an AO to exercise jurisdiction over income accruing within his area. However, the Tribunal clarified that this provision does not override a transfer order under Section 127. Section 127(4) allows the successor AO to continue proceedings without re-issuing notices already issued by the predecessor AO. However, this assumes that the original notice was issued by an AO with valid jurisdiction, which was not the case here.

4. The effect of transfer orders under Section 127 on the jurisdiction of the AO:
The Tribunal noted that the transfer order under Section 127 dated 08.10.2008 was absolute and without reservation of concurrent jurisdiction. Hence, after this transfer, the ACIT, Circle-21(1), New Delhi was divested of jurisdiction over the appellant's case. The Tribunal held that once an AO is divested of jurisdiction by a transfer order, he cannot subsequently issue notices or take any action regarding the case.

5. The role of Section 292BB in curing defects in the service of notice:
The Tribunal referred to the Supreme Court's decision in CIT Vs. Hotel Blue Moon and CIT Vs. Laxman Das Khandelwal, which held that the issuance of a notice under Section 143(2) is mandatory and not a curable defect under Section 292BB. Section 292BB can cure defects in the service of a notice but does not apply to the complete absence of a notice. Since no valid notice under Section 143(2) was issued by the AO with jurisdiction, the assessment order was invalid.

Conclusion:
The Tribunal concluded that the ACIT, Circle-21(1), New Delhi did not have jurisdiction to issue the notice under Section 143(2) after the transfer of the appellant's case to Ranchi. Consequently, the assessment order passed by the ACIT, Central Circle-3(1), Kolkata, based on the invalid notice, was null and void. The appeal was allowed in favor of the appellant.

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