AO loses jurisdiction to complete assessment after CIT transfers file under section 127, PAN transfer irrelevant

The HC upheld the Tribunal's decision that the AO lacked jurisdiction to complete the assessment after the CIT transferred the file to Chennai under section 127 on 15.03.2013. The court rejected the Revenue's argument that jurisdiction continued until PAN transfer, holding that PAN transfer is consequential to jurisdiction transfer, not vice versa. Following precedent that "even a right order by a wrong forum is a nullity," the court confirmed that once jurisdiction is validly transferred, the original authority becomes incompetent to proceed further with pending matters.

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Issues involved:
The appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 against an order passed by the Income Tax Appellate Tribunal, "B" Bench, Kolkata for the Assessment Year 2008-09.

Issue A:
The Revenue questioned whether the assessment order under Section 147/143 (3)/263/144 dated 24.03.2014 was valid, as the Assessing Officer's jurisdiction was transferred to Chennai.

The Revenue argued that the assessee did not cooperate in the assessment proceedings, and the assessment was completed based on available facts and legal precedents. The assessee did not raise jurisdictional issues earlier, and the Tribunal's decision favored the assessee without considering their conduct.

Issue B:
The question was raised regarding the jurisdiction of the Assessing Officer after the transfer of files under Section 127 of the Income Tax Act to Chennai.

The assessee contended that the notices issued were without jurisdiction due to the transfer of jurisdiction to Chennai. The jurisdictional point was raised before the CIT(A), but it was not properly appreciated. The Tribunal found that the Assessing Officer in Kolkata had no jurisdiction after the transfer to Chennai, citing legal precedents.

The Tribunal considered the facts and legal principles, concluding that the Assessing Officer lacked jurisdiction over the matter. The Tribunal referenced relevant case law to support its decision.

The Division Bench of the Bombay High Court rejected the Revenue's argument that jurisdiction continued based on PAN transfer, emphasizing that jurisdiction follows the PAN, not vice versa.

The Revenue's argument that the PAN and files were still within Kolkata's jurisdiction was dismissed, as the transfer of jurisdiction was a consequential proceeding. The Tribunal's decision was upheld, and the appeal failed against the Revenue.

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