Jurisdiction transfer: assessments must be framed by the transferee circle, not NFAC, resulting in quashing of a later NFAC order.

Whether an assessment by the faceless centre is valid after an intra-departmental transfer was the central issue; the legal principle applied was that a valid transfer of jurisdiction to the transferee circle operates independently of faceless assessment notifications and vested the power to frame assessment in the transferee circle. Applying that principle to the facts, the faceless centre framed the assessment after the transfer date and therefore lacked jurisdiction; the assessment was held invalid and quashed, resulting in relief to the assessee.

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Issues: Whether an assessment order dated 26/02/2021 passed by the National e-Assessment Centre (NFAC) under Section 143(3) of the Income-tax Act, 1961 is valid where the assessee's jurisdiction had been transferred to Central Circle-06, New Delhi by an order under Section 127(3) of the Income-tax Act, 1961 dated 22/02/2021.

Analysis: The Tribunal examined the transfer order under Section 127(3) of the Income-tax Act, 1961 which transferred the assessee's jurisdiction to Central Circle-06 with immediate effect on 22/02/2021. The Tribunal considered the scope of the Faceless Assessment Scheme and the CBDT order under Section 119 of the Income-tax Act, 1961, and relied on precedent holding that transfers effected under Section 127 operate independently of the Faceless/E-assessment notifications and that where jurisdiction has been validly transferred under Section 127 the assessment must be framed by the transferee jurisdiction (here Central Circle) and not by NFAC. Applying these principles to the facts, the Tribunal found that the NFAC passed the assessment on 26/02/2021 after the transfer date and therefore did not have jurisdiction to frame the assessment.

Conclusion: The assessment order dated 26/02/2021 passed by the National e-Assessment Centre under Section 143(3) of the Income-tax Act, 1961 is without jurisdiction and is quashed; the appeal is allowed in favour of the assessee.

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