Jurisdiction to transfer income tax assessments held invalid; transfer void ab initio, assessments quashed

Dispute concerns validity of a transfer of an income tax assessment where the transferring officer lacked jurisdiction. The legal reasoning holds that transfer provisions do not apply if the assessing officer lacked jurisdiction to deal with the assessee, and absence of communication of any transfer order reinforced the jurisdictional defect. Consequence: the transfer order was void ab initio and all consequent proceedings, including the final assessment, were declared without jurisdiction and quashed.

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Issues: (i) Whether the order passed under Section 127 of the Income-tax Act, 1961 dated 27.05.2022 by the PCIT-10, Delhi (alleged non-corporate charge) was invalid for want of jurisdiction and whether consequential orders including the final assessment order dated 29.10.2024 passed under Section 143(3) r.w.s. 144C(13) are null and void.

Analysis: The issue concerns (a) assignment of jurisdiction by administrative notification and statutory provisions governing transfer and territorial jurisdiction (Sections 120 and 124), (b) whether the authority that passed the Section 127 order held jurisdiction over corporate assessee matters as per the departmental jurisdictional notification, and (c) applicability of the time-bar/objection bar under Section 124(3) when there is an inherent lack of jurisdiction. Relevant judicial principles include the distinction between administrative transfers within the same locality and transfers requiring recorded reasons and communication under Section 127, and the doctrine that an action taken by an authority lacking jurisdiction is a nullity. The material shows PCIT-10 held a non-corporate charge per the departmental jurisdiction notification while the assessee is a corporate entity; therefore PCIT-10 lacked power to transfer the corporate assessee's case. The statutory bar in Section 124(3) applies to challenges to territorial jurisdiction where jurisdiction exists but is being disputed within the prescribed period; it does not apply where there is an inherent lack of jurisdiction in the authority that purported to transfer the case. The consequence of an invalid transfer order under Section 127 is that subsequent proceedings founded on that transfer (including draft/DRP directions and final assessment under Section 143(3) r.w.s. 144C(13)) stand vitiated.

Conclusion: The Section 127 order dated 27.05.2022 is invalid for want of jurisdiction and is void ab initio; consequently the final assessment order dated 29.10.2024 passed pursuant to that transfer is without jurisdiction and is quashed. The appeal is allowed on this ground; other grounds are left open as academic.

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