Inherent jurisdiction defect renders assessment unsustainable where no transfer order exists and territorial objection limits do not apply.

A jurisdictional objection to an assessment framed in Delhi, where the assessee contended that jurisdiction lay in Mumbai and no transfer order under section 127 had been passed, was treated as a challenge to inherent authority rather than mere territorial venue. The Tribunal applied the principle that a defect going to the root of jurisdiction is not cured by participation in the proceedings, and that the bar in section 124(3) concerns only territorial objections. On those facts, assumption of jurisdiction in Delhi was unsustainable, the jurisdictional objection was upheld, and the assessment order was set aside; the transfer pricing and interest grounds were left undecided as academic.

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Issues: (i) Whether the assessment order was jurisdiction, the case having been assessed at Delhi despite the assessee's contention that jurisdiction vested at Mumbai and no transfer order under section 127 had been passed.

Analysis: The assessee's jurisdictional objection went to the very authority to frame the assessment, not merely to territorial venue. No order transferring the case from Mumbai to Delhi was shown for the relevant assessment year. The Tribunal followed the principle that a defect going to the root of inherent jurisdiction cannot be cured by participation in proceedings or by the bar of limitation meant for territorial objections under section 124(3). On the facts, the assumption of jurisdiction at Delhi was not sustainable.

Conclusion: The jurisdictional objection was upheld and the assessment order, as affirmed by the first appellate authority, was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded on the jurisdictional ground, and the transfer pricing and interest grounds were left undecided as academic.

Ratio Decidendi: An assessment framed by an who lacks inherent jurisdiction is a nullity, and the bar under section 124(3) applies only to objections as to territorial jurisdiction, not to a challenge to the very authority to act.

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