Jurisdictional transfer objections must be timely challenged, while a fresh tax appeal requires independent merits review.

A transfer of an assessment case to another Assessing Officer, if not challenged in the prescribed manner and within time, cannot later be treated by the assessee as void ab initio in subsequent proceedings; the jurisdictional objection failed. However, a tribunal must decide the fresh appeal on the merits of the assessment itself, including the taxability of compensation received for land acquisition, and cannot dismiss it merely by relying on an earlier order that dealt only with Section 263 proceedings. The merits dismissal was therefore set aside and the matter remitted for fresh adjudication.

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Issues: (i) Whether the assessee could challenge the assessment proceedings on the ground that transfer of the case from one Assessing Officer to another was made without an order under Section 127(1) of the Income-tax Act, 1961 and rendered the proceedings void ab initio. (ii) Whether the Tribunal was justified in dismissing the appeal without deciding on merits the taxability of compensation received for acquisition of land by NHAI.

Issue (i): Whether the assessee could challenge the assessment proceedings on the ground that transfer of the case from one Assessing Officer to another was made without an order under Section 127(1) of the Income-tax Act, 1961 and rendered the proceedings void ab initio.

Analysis: The transfer order of 08.08.2019 was not challenged in time and was allowed to attain finality. An order said to be without jurisdiction or void cannot be ignored merely on a party's own view; it must be set aside by a competent forum. Once the assessee omitted to challenge the transfer order in the appropriate manner, it could not later contend in subsequent proceedings that the entire assessment chain was non est.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether the Tribunal was justified in dismissing the appeal without deciding on merits the taxability of compensation received for acquisition of land by NHAI.

Analysis: The earlier Tribunal decision had only upheld the legality of the Section 263 proceedings and did not decide the merits of the later assessment, where the question was whether the compensation of Rs. 65,04,107/- was taxable. The Tribunal was required to examine that substantive issue independently and could not dispose of the appeal by relying on its earlier order on a different question.

Conclusion: The issue was decided in favour of the assessee and against the Revenue, and the matter was remitted to the Tribunal for fresh decision on merits.

Final Conclusion: The appeal succeeded only in part. The challenge to the transfer-based jurisdictional objection failed, while the dismissal of the merits appeal was set aside and the matter was sent back for reconsideration.

Ratio Decidendi: An order alleged to be without jurisdiction must be challenged and set aside by the competent forum and cannot be treated as a nullity by a party on its own; a tribunal must decide a fresh tax appeal on the actual merits of the assessment and not dispose of it merely by relying on an earlier order on a different issue.

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