TaxTMI 
TaxTMI 
2020 (6) TMI 8
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....sessing Officer issued notice u/s 143(2) and 143(1) of the Act and thereafter completed assessment u/s 143(3) r.w.s. 147 of the Act was completed on 13/12/2016, determining the total income at Rs. 18,42,160/- interalia making an addition of Rs. 15,31,700/-, as cash credit being, net income earned from Client Code Modification (CCM). Aggrieved the assessee carried the matter in appeal before the ld. First Appellate Authority. The ld. CIT(A) rejected the arguments of the assessee, both against the reopening of the assessment as well as against the merits of the addition. 3. Further aggrieved the assessee is in appeal before us challenging both the reopening of the assessment as well as the addition made u/s 68 of the Act on merits. 4. The ld. Counsel for the assessee, Shri Somnath Ghosh, challenged the reopening of the assessment u/s 147 of the Act by submitting that, a perusal of the reasons recorded, a copy of which was placed at page 97 of the paper book, reveals total non-application of mind by the Assessing Officer to the material received by him. He submitted that the assessee had not entered into any derivative transaction during the year. He submitted that the informati....
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.... (SC) was violated making the re-opening of assessment bad in law. He further relied on the judgment of the Hon'ble Bombay High Court in the case of Bayer Material Science P. Ltd. vs. DCIT (2016) 382 ITR 333 (Bom.), for the proposition that the assessment under such circumstances would be bad in law. He further argued that the Assessing Officer who recorded reasons and issued notice u/s. 148 of the Act was ITO Ward 1(1)- Kolkata, who had no jurisdiction over the case of the assessee. He submitted that later the file was transferred to ITO, Ward-4(3), Kolkata, as this officer had jurisdiction. He submitted that ITO, Ward-4(3), Kolkata, without issuing fresh notice or recording reasons that he is satisfied that income to tax has escaped assessment u/s 143(3) of the Act. Thus, he submitted that this renders the assessment order illegal and without jurisdiction. 5. On merits, the ld. Counsel for the assessee submitted that the National Stock Exchange of India (NSE) vide letter dt. 16/01/2017, has furnished information to the Assessing Officer in response to notice u/s 133(6) of the Act that in the case of the assessee stated that there is no "no client code modifications details dur....
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.... case law cited, I hold as follows:- 8. I first take up the issue of reopening. The reasons for reopening of the assessment as furnished by the ITO, Ward-1(1), Kolkata, to the assessee, dt. 11/07/2016, is extracted for ready reference:- "Sub: Scrutiny u/s. 147 of the I.T. Act, in respect of M/s. Aereo Dealcom Private Limited, PAN- AACCA5934G for the A.Y. 2009-10 - matter regarding. Ref: Your letter dated 14.04.2016. With reference to your above letter, it is to inform you that the reason for reopening of your case is as follows: "As per information received from the ADIT(Inv.), Unit-1 (3), Ahmedabad that the assessee company was a beneficiary by way of Client Code modification(CCM) at the time of derivative transaction in National Stock Exchange. The assessee thus got the benefit of net income due to Client Code Modification for the sum of Rs. 15,31,700/-." Therefore, the Assessing Officer has reason to believe that the income of M/s. Allied Commotrade Pvt. Ltd to the tune of Rs. 15,31, 700/- for the relevant asstt. year has escaped assessment and accordingly the case was reopened u/s.147 of the I.T. Act." 8.1. In response....
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....essing Officer, sources of transactions were not explained - Notice was issued by Assessing Officer to reopen assessment on aforesaid basis that income chargeable to tax to extent of accommodation entry had escaped assessment - Whether information received from investigation wing could not be said to be tangible material per se without a further inquiry being undertaken by Assessing Officer to establish link between 'tangible material' and formation of reason to believe that income had escaped assessment and consequently, reassessment was unjustified" 8.3. The Hon'ble Delhi High Court in the case of PCIT vs. G & G Pharma Ltd. (supra), has held as follows:- "Held that after setting out four entries, stated to have been received by the assessee on a single date, i.e., 10-2-2003, from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the Assessing Officer stated that he had also perused various materials and report from Investigation Wing and on that basis it was evident that the assesseecompany had introduced its own unaccounted money in its bank account by way of above accommodation e....
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....ft Assessment order dated 30th March, 2015. We are not dealing the validity of the reasons in support of the impugned notice in the present facts as the time limit to pass the Assessment order as provided under 4th Proviso to sub-section(2) of Section 153 of the Act has already expired when the petition was filed." 10.2. The Hon'ble Bombay High Court in the case of Mohanlal Champalal Jain vs. ITO reported in [2019] 102 taxmann.com 293 (Bombay) under similar circumstances has held as follows:- "IT : Where Assessing Officer issued a reopening notice on ground that assessee had made transactions of huge amount in national/multi commodity exchange but he had not filed his return of income and assessee filed an objection that he had earned no income out of trading in commodity exchange and he had actually suffered loss and, therefore, he had not filed return of income, since, Assessing Officer had not looked into objections raised by assessee and proceeded ahead, impugned reassessment notice was unjustified" 10.3. The Hon'ble Gujarat High Court in the case of Vishwanath Engineers vs. ACIT reported in [2013] 352 ITR 549 (Guj.) held as follows:- "Thereafter, Assess....
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....(2), the Board or other income- tax authority authorised by it may have regard to any one or more of the following criteria, namely:- (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases. (4) Without prejudice to the provisions of sub- sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,- (a) authorise any Director General or Director to perform such functions of any other income- tax authority as may be assigned to him by the Board; (b) empower the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of (5) The directions and orders referred to in sub- sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whet....
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....neral or Chief Commissioners or Commissioners concerned or, if they are not in agreement, by the Board or by such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, specify. (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer- (a) where he has made a return under sub- section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub- section (1) of section 142 or subsection (2) of section 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub- section (1) of section 142 or under section 148 for the Making of the return or by the notice under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier. (c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of sect....
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.... Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation: In section 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and incl....
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....rial area, the AO gets jurisdiction. Other than the assessees who are not in Business or Profession, in their cases, the AO will be vested with the jurisdiction if the person (assessee) is residing within the territorial area ear-marked by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120 of the Act speaks about. However, when there is a question to be determined as to whether an AO has jurisdiction to assess any person then it would be decided by the authorities as stipulated in sub-section (2) of section 124 of the Act by Directors General or Chief Commissioners or Commissioners, by the Directors General or Chief Commissioners or Commissioners concerned, as the case may be). In case, if the question is one relating to areas within the jurisdiction of different Income tax authorities(Directors General or Chief Commissioners or Commissioners, by the Directors General or Chief Commissioners or Commissioners as stipulated therein) then if the other Income-tax authority also agrees then the question will be resolved mutually or else it will be referred to the CBDT. So, once the AO of an assessee is vested with the jurisdiction u/s. 124 r....
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.... Commissioner or Chief Commissioner or Pr. Commissioner or Commissioner, of the AO to whom the case of an assessee is proposed to be transferred, agrees for the transfer, then the transfer can made u/s. 127(2)(a) of the Act. In case however there is any disagreement between such stipulated authorities, the matter is required to be referred to the Board which in turn decides the issue of transfer or the Board can then authorize an Income Tax authority by a notification as stipulated in clause (b) of sub-sec.(2) of section 127 of the Act. Subsection(4) of Section 127 of the Act provides that upon the transfer of case by the authorities specified in sub-section (1) or (2) of section 127 of the Act, any stage of the proceedings shall not render the re-issue of any notice already issued by the AO or AOs from whom the case is transferred. In other words, Section 127(4) saves the actions of the AO from whom the case is transferred and allows the AO to whom the case of an assessee is transferred to take forward the proceedings from the point where the earlier jurisdictional AO had left. Here, it would be important to note the Explanation to section 127 defines the expression 'case'. A read....
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....e delegated the powers to issue orders/directions vesting the jurisdiction of assessment over the authorities subordinate to it. The said Assessing Officer at New Delhi enjoyed exclusive jurisdiction over the appellant upto 08.10.2008. Thereafter, by virtue of order u/s 127(2) passed by the ld. CIT-V, Delhi dated 08.10.2008, the said AO at New Delhi was divested of his jurisdiction over the appellant and the jurisdiction stood transferred in favour of ACIT, Central Circle-1, Ranchi. From the plain reading of the order u/s 127(2) dated 08.10.2008, we find that the transfer of jurisdiction over the appellant's case from the charge of ACIT, 15(1), New Delhi to ACIT, Central Circle-1, Ranchi was absolute and without reserving any right of concurrent jurisdiction over the appellant at New Delhi. 17. Before us the Ld. CIT, DR vehemently contented that since the present assessee's principal office is at New Delhi, the AO, Delhi continued to have jurisdiction as per sec. 124 read with sec. 120(1) or (2) of the Act and the ACIT, Circle 21(1), Delhi's action of issuing the statutory notice u/s. 143(2) of the Act was saved by sub-sec. (5) of section 124 of the Act read with sub-secti....
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....ee made u/s. 127 of the Act. In the circumstances when one reads the definition of "case" as set out in the Explanation to Section 127 of the Act, then it means that when a Chief Commissioner or Commissioner makes an order for transfer of jurisdiction in exercise of the powers conferred by Section 127 of the Act, from an AO who is vested with jurisdiction by virtue of direction/order issued under sub-section (1) or (2) of section 120 of the Act to another AO who is not vested with such jurisdiction as per direction/order issued u/s. 120(1) and (2) of the Act; then by virtue of such transfer order u/s. 127 of the Act, the jurisdiction of an AO u/s. 124 vested by virtue of an order/direction vested on an AO as per sec. 120(1) or (2) of the Act is taken away and thus the original AO is divested of the jurisdiction enjoyed u/s. 124 read with sub-sec. (1) or (2) of section 120 of the Act. We therefore hold that contention put forth by the ld. CIT, DR that provisions of Section 124(5) being overriding in nature, the ACIT Circle 21(1), New Delhi simultaneously held concurrent jurisdiction is devoid of any merit. Such interpretation is not in accord with the extant provisions of Section 12....
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.... the stipulated time, subsection (4) of sec. 127 of the Act does not come to the rescue of the department. As noted earlier, the AO, Delhi ceased to be AO of assessee after the transfer order was passed by CIT-V, Delhi on 08.10.2008, so after such order by the competent authority (which fact is not disputed before us), then the CIT, Delhi became functus officio and by virtue of it even his subordinate authority i.e. AO, Delhi was also divested of the jurisdiction. For the reasons as discussed in the foregoing therefore we hold that in the given facts of the case, the appellant's case was not saved by the provisions of Section 124(5) as also by Section 127(4) of the Act. Accordingly, the contentions of the Ld. CIT, DR are rejected being devoid of any merit in law as well as on facts. 20. Coming to the next argument of the Ld. CIT, DR that jurisdiction is an administrative issue and not a 'subject matter' open for judicial intervention, we note that the Hon'ble Calcutta High Court in M/s. Ramshila Enterprises Pvt. Ltd. (infra) clearly held that, "The jurisdiction over the subject-matter has to be conferred by law. The jurisdiction in this case had been transferred by the ord....
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....ard [except if the AO to whom case is transferred are situated in the same city, locality or place (see sub-section (3) of section 127 of the Act)] and at this juncture, we would like to remind that in the present case at hand, the assessee was given an opportunity to be heard by Commissioner at Delhi before he proposed the transfer of assessee's case to AO at Ranchi and the assessee had objected to the transfer which is found available in the paper book. After considering the assessee's objections, the Commissioner at Delhi transferred the case of assessee from AO at Delhi to AO at Ranchi. In the circumstances therefore, as discussed above, once transfer of the case of the assessee is ordered u/s. 127 of the Act, the AO who was vested with the jurisdiction by virtue of the direction or order issued under sub-section (1) or (2) of sec. 120 and section 124 of the Act stood divested of the same. As held by the Hon'ble jurisdictional High Court in M/s. Ramshila Enterprises Pvt. Ltd. (infra),since the jurisdiction was divested of the earlier AO by virtue of transfer order u/s. 127 of the Act, the earlier AO, which in this case is AO at Delhi (DCIT. Circle -15, New Delhi) ce....
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....ious judicial decisions. We however note that the case laws relied on by the Ld. CIT, DR were factually distinguishable. In these decisions the Courts were called upon to examine the implications arising from the provisions of Section 120 and 124 of the Act and the facts of these cases did not involve orders under Section 127 of the Act in terms of which the AO holding territorial jurisdiction in terms of Section 124 read with Section 120(1) & (2) was specifically divested of his jurisdiction by the competent authority and the jurisdiction was conferred on some other officer after complying with the procedure prescribed in Section 127 of the Act. Instead we find that a similar issue came up before this Tribunal in the case of M/s. Ramshila Enterprises Pvt. Ltd. Vs. Pr. CIT wherein the factual matrix governing the issue of jurisdiction was similar. In that case the question was whether the Commissioner who usurped the revisional jurisdiction u/s. 263 of the Act could have validly done so, once he himself had passedan order u/s 127 of the Act in terms of which assessee's case stood transferred. The facts of the said case M/s. Ramshila Enterprises Pvt. Ltd. Vs. Pr. CIT can be summariz....
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.... purpose of conferring a larger power.As the actual transfer of the files from the incumbent AO to the new AO had taken place only on 29.7.2013 and further the order sought to be revised by the ld.CIT u/s 263 was passed much prior to the even making of request for transfer of jurisdiction in respect of search matters, we have absolutely no doubt in our mind that only the CIT Kolkata II, Kolkata had the jurisdiction to revise the assessment order passed u/s147 as has been done in this case.The contention of the learned AR in this regard is held to be without substance and not unacceptable." 24. Aggrieved by the aforesaid order of the Tribunal, the assessee M/s.Ramshila Enterprises Pvt. Ltd. preferred an appeal before the Hon'ble jurisdictional High Court, Calcutta wherein the following question of law raising the jurisdictional issue similar to that raised by the assessee before us, was framed as under:- "Whether the Tribunal was justified in holding that the Commissioner of Income Tax, Kolkata-II, had jurisdiction over the appellant at the time of issue of the Show Cause notice on 18th March, 2013 and passing of the order on 26th March, 2013 under section 263 of t....
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....ta-II, Kolkata in spite of the fact that the jurisdiction had already been transferred by his predecessorin-office by his order dated 3rd September, 2012 with immediate effect. Mr.Podder contended that CIT, Kolkata-II, Kolkata thereafter had no longer any jurisdiction left with him to be exercised in respect of the return or returns filed by the assessee or assessments made. He submitted that the exercise of power was not only ex parte, without notice, but was also without jurisdiction. He drew our attention to the letter dated 18th March, 2013 received by his client from the Deputy Commissioner of Income-tax, which is a notice under section 143(2) pertaining to the assessment year 2012-2013. He submitted that the order dated 3rd September, 2012 transferring jurisdiction to a ACIT/DCIT, Central Circle-XIX, Kolkata had already become operative and was also acted upon. Therefore, CIT, Kolkata-II, Kolkata could not have exercised jurisdiction. The impugned order passed by him is altogether without jurisdiction and is, therefore, a nullity. He drew our attention to a judgment of the Apex Court in the case of Pandurang and Others versus State of Maharashtra reported in (1986) 4....
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....d after such removal of jurisdiction." 27. After hearing both the parties the Hon'ble High Court has held as under: "We have considered the rival submissions. It is not necessary for us to consider whether the Commissioner had jurisdiction to restrict the order of transfer, for the simple reason that the order of transfer in this case was not a restricted one. Reading the order dated 3rd September, 2012 as a whole, it does not appear that any restricted transfer was sought to be made for any particular year or years or otherwise. The order of transfer, as we have already indicated, was passed in the interest of revenue for better coordination, effective investigative and meaningful assessment. The actual transfer of files may have taken place on 29th July, 2013 but admitted position is that a notice under Section 143(2) by the transferee assessing officer was issued on 18th March, 2013. The existence of files does not confer the jurisdiction when the same has validly been transferred and also acted upon. The jurisdiction over the subject-matter has to be conferred by law. The jurisdiction in this case had been transferred by the order dated 3rd Sept....
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....ent presented for registration is or is not duly stamped before admitting it to registration and not afterwards. If he finds that the document is not duly stamped, then he must impound it under Section 33 of the Act. Neither in the Registration Act nor in the Stamp Act is there any provision giving to the registering officer any power to examine whether an instrument already registered was or was not duly stamped and to impound it. As soon as the registering officer registers a document presented to him for registration, the function in the performance of which the document was produced before him is over and thereafter becomes functus officio having no power under section 33 to impound the instrument. The matter is really concluded by the decision of the Supreme Court in Govt. of Uttar Pradesh v. Mohammad Amir Ahmad Khan, AIR1961SC787 That was a case where the question arose whether the Collector has any power to impound an instrument sent to him for adjudication under section 31 of the Stamp Act. The Supreme Court held that under that section the Collector had no such power, as the provision gave him the power only to give his opinion as regards the duty with which in hi....
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....order made by him.P.Ramanatha Aiyar's Advanced Law LexiCo.(3rd Edn., Vol.2, pp.1946-47) gives the following illustrative definition of the term "functus officio": Thus a judge, when he has decided a question brought before him, is functus officio, and cannot review his own decision." Black's Law Dictionary (6th Edn., p.673) gives its meaning as follows: "Having fulfilled the function, discharged the office, or accomplished the purpose, and therefore of no further force or authority." We may first refer to the position with reference to civil courts. Order 20 of the Code of Civil Procedure deals with judgment and decree. Rule 1 explains when a judgment is pronounced. Sub-rule (1) provides that the court, after the case has been heard, shall pronounce judgment in an open court either at once, or as soon thereafter as may be practicable, and when the judgment is to be pronounced on some future day, the court shall fix a day for that purpose of which due notice shall be given to the parties or their pleaders. Sub-rule (3) provides that the judgment may be pronounced by dictation in an open court to a shorthand writer [if the Judge is speciall....
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....March, 2013 under Section 143(2) could not have been issued. Therefore, the order of transfer was duly published/ notified and/or communicated and thereafter acted upon by the transferee-assessing officer. We are, as such of the opinion that the issuance of the notice dated 18th March, 2013 under Section 263 and the consequent order dated 26th March, 2013 passed under Section 263 of the Income Tax Act were acts without jurisdiction and therefore a nullity. For the aforesaid reasons the question No.(a) is answered in the negative. The point is, thus decided in favour of the assessee. The appeal stands allowed." (Emphasis given by us) 28. From the aforesaid order of the Hon'ble High Court at Calcutta, we understand that in this case after the order u/s. 127 of the Act dated 03.09.2012 was passed by the CIT-2, Kolkata, he became functus officio and therefore the Hon'ble High Court held that he could not have exercised jurisdiction over the assessee's case u/s. 263 of the Act and consequently therefore he erred in passing an order dated 26.03 2013 u/s 263 setting aside the order of the ITO, Ward-4(1), Kolkata dated 21.05.2010. 29. Coming back t....
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....did not have jurisdiction to issue notice u/s. 148 of the Act on 25-03-2010 as the case was transferred u/s. 127(2) of the Act from New Delhi to Kolkata on 04-01-2010. The assessee before CIT(A) filed written submissions as under: "This appeal is against the reopening of assessment u/s. 147 of the I. T. Act 1961. The assessee has challenged the reopening by the ITO Ward 3(3) Delhi. The notice u/s. 148 of the I.T. Act 1961 was issued by the ITO Delhi after receipt of approval from Additional CIT Delhi on 25-03-2010. However the CIT Delhi had passed an order u/s. 127 transferring the file to Kolkata on 4-1-2010 as such on 25-3-2010 the AO in Delhi did not have jurisdiction over the case, hence the reopening it without jurisdiction as it is based on the notice u/s. 148 of the I. T. Act, 1961 issued by the ITO Delhi. We have requested the AO at Kolkata to issue the copy of the order of 127 and 151 of the I.T. Act, 1961 but the same has not been issued yet. We therefore request you to either, call for the records and adjudicate the validity of reopening or grant an adjournment of 15 days to obtain certified copies of all related records so that we can represen....
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....the assessment. Adj. to 20-2-12." 4.CIT(A) discussed the issue and observed in paras 8 and 9 as under: "8. The appellant submitted during the appellate proceedings that he does not submit any additional evidences, books of account or other documents either before the appellate authority or Assessing Officer since these are not available with appellant. The appellant has never taken objection regarding the jurisdiction of issuance of notice u/s 148 by the Assessing Officer of New Delhi or initiation/continuation of assessment proceedings by the Income-tax Officer, Ward 6(1), Kolkata before the Assessing Officer during the assessment proceedings even when the authorised representative attended the proceedings on 08-122010 and 16-12-2010. The authorised representative asked for the extension of time from Assessing Officer on 20-12-2010 but did not file any objection regarding the jurisdiction of the Assessing Officer and did not attend the proceedings thereafter. The assessment has been completed on 29-12-2010. 9. The Income-tax Officer, Ward (1) has submitted that the case records were not transferred to him and was still lying with ITO Ward 3(3), ....
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.... issued or at the time of assessment with the Assessing officer at Kolkata. There was a possibility to the Assessing Officer at New Delhi to get the records transferred immediately to Kolkata and a fresh notice may have been issued during the time-limitation by Assessing Officer at Kolkata. 20. Following the law laid down and upheld by the Hon'ble appellate authorities as discussed above, the legal provisions of section 124(3) on this issue and in the facts and circumstances of the case, it is held that the assessment order passed u/s 147/144 of the I.T. Act 1961 is not without jurisdiction and is as per law and hence the assessment order passed by the Assessing Officer is held to be a valid order. In the facts and circumstances of the case the proceedings u/s 148 of the I T Act 1961 is upheld to be valid in absence of any objection being raised before the Assessing Officer issuing the notice u/s 148 and/or completing the assessment. In the facts and circumstances of the case it is also held that appellant was given proper opportunity after serving the notice u/s 148 and during assessment by the Assessing Officer. Hence, these three grounds of appeal are dismissed." ....
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.... AO for assessment, u/s. 124 of the Act that when the ITO had jurisdiction when assessment proceedings commenced and a draft assessment order was submitted to IAC but due to subsequent change in jurisdiction, unless the same brought to the notice of the authority concerned, the assessment would not be vitiated. We are with the argument of Ld. Sr. DR in respect to this argument that where the jurisdiction assumed by the AO, assessee has to object to the same u/s. 124 of the Act in case hr us aggrieved. But, what will be the effect of the order of Commissioner of Income-tax transferring the jurisdiction u/s. 127 of the Act. We are of the view, that when any case of a particular assessee which is transferred from one AO to another AO, whether within the state or without it, all proceedings which are pending against the assessee under the Act in respect of the same year as also previous years are meant to be transferred simultaneously and all proceedings under the Act which may be commenced after the date of such transfer in respect of any year whatever are also included therein, so that the AO to whom such case is transferred would be in a position to continue the pending proceedings ....
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....uently, an order of transfer can be validly made even if there be no proceedings pending for assessment of tax and the purpose of the transfer may simply be that all future proceedings are to take place before the officer to whom the case of the assessee is transferred. 8. In view of the above principle regarding jurisdiction and facts of the present case, the order passed by CIT1, Delhi, transferring jurisdiction from ITO, Ward-3(3), New Delhi on 04-01-2010, subsequent action of the AO i.e. ITO, Ward-3(3), New Delhi issuing notice u/s. 148 of the Act dated 25-03-2010 is invalid because the jurisdiction from ITO, Ward-3(3), New Delhi by CIT-1, Delhi to ITO, Ward-6(1), Kolkata. At the time of passing of order by CIT-1, Delhi transferring jurisdiction from ITO, Ward-3(3), New Delhi dated 04-01-2010 to ITO, Ward-6(1), Kolkata, there is no proceedings pending before the ITO, Delhi and the transfer order for jurisdiction was passed on that date. The CIT, Delhi-1 passed order u/s. 127 of the Act on 01-01-2010 transferring the jurisdiction of the assessee to ITO, Wd-6(1), Kolkata and the jurisdiction in respect to every action for all assessment years lies with the ITO, Wd-6(1), ....
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....0(1) would have no locus standi or jurisdiction to issue the impugned notice dated 30.03.2012. As there was no reply, the present writ petition is filed inter alia on the ground that once the jurisdiction to assess/reassess the petitioner vested in the ACIT-10(1) is divested by the order of the CIT-10 Mumbai dated 22.11.2011, the ACIT-10(1) Mumbai would cease to have power to assess or reassess the petitioner and hence, the impugned notice issued by ACIT-10(1) Mumbai being without jurisdiction is liable to be quashed and set aside. 7. In the affidavit-in-reply filed by the DCIT-10(1) Mumbai dated 8.10.2012 it is stated that by a corrigendum order dated 27.03.2012, the CIT-10 Mumbai has temporarily withdrawn/cancelled the earlier transfer order dated 22.11.2011 for the sake of administrative convenience and therefore, the notice dated 30.03.2012 would be valid. It is the case of the petitioner that neither any notice to pass a corrigendum order was issued to the petitioner nor the alleged corrigendum order dated 27.03.2012 has been served upon the petitioner till date. 8. Mr. Pinto, learned Counsel for the Revenue on instruction from CIT-10 Mumbai informs us that t....
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....mbai from ACIT-10(1) Mumbai to DCIT Circle-1(2) Pune by order dated 22.11.2011 it was totally improper on the part of ACIT-10(1) Mumbai to request the CIT-10, Mumbai to pass a corrigendum order with a view to circumvent the jurisdictional issue. Making such a request on the part of ACIT-10(1) Mumbai to the CIT-10 Mumbai in our opinion, was in gross abuse of the process of law. If there was any time barring issue, the ACIT-10(1) Mumbai ought to have asked his counterpart at Pune to whom the jurisdiction was transferred to take appropriate steps in the matter instead of taking steps to circumvent the jurisdictional issue. It does not befit ACIT-10(1) Mumbai to indulge in circumventing the provisions of law and we strongly condemn the conduct of ACIT-10(1) Mumbai in that behalf. Instead of bringing to book the persons who circumvent the provisions of law, the ACIT-10(1) Mumbai has himself indulged in circumventing the provisions of law which is totally disgraceful. 15. In any event, the CIT-10 Mumbai ought not to have succumbed to the unjust demands of ACIT-10(1) and instead ought to have admonished the ACIT-10(1) for making such unjust request. The CIT-10 Mumbai ought to hav....
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.... not intimated to the AO at Noida nor did the assessee mention his PAN with the ICICI Bank. Even the assessee's address available with the bank was that of Noida. In this case it was not brought on record by the assessee that his case was transferred to Delhi by virtue of an order u/s 127 passed by the competent authority under whom the AO at Noida was functioning. The Court further found that it was only after the period of limitation prescribed in Section 149 expired on 31st March, 2016, that the assessee intimated the AO at Noida that he had been regularly assessed in Delhi. On these facts, the Hon'ble Delhi High Court held that it was mala fide on the part of the assessee not to intimate the AO at Noida prior to 31.03.2016 and that the assessee waited for the period of limitation to expire before raising this objection. In absence of any order u/s 127 and having noted that with reference to address made available by the assessee to ICICI Bank in which cash deposits were found, the Hon'ble High Court held that assessee was debarred from raising the objection to AO's jurisdiction in terms of section 124(3)(b). In the instant case, however, the appellant had mentioned its ....
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....ion of the Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a latter case, the Courts must carefully try to ascertain the true principle laid down by the decision of the Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by the Court, to support their proceedings." 35. Coming back to the admitted facts in the present case, we hold that the ACIT, Central Circle-3(1), Kolkata framed the assessment order dated 29.12.2017 pursuant to transfer of case ordered by PCIT, Central Patna dated 03.11.2017 u/s. 127 of the Act, without there being valid issuance of notice u/s 143(2) of the Act. In our opinion such an order is bad in law as held by the Hon'ble Supreme Court in CIT V Hotel Blue Moon (2010) 321 ITR 362 (S.C) wherein the Hon'ble Supreme Court has held that issue of a legally valid notice u/s. 143(2) is mandatory for usurping jurisdiction to frame scrutiny assessment u/s. 143(3) of the Act and absence of a valid notice u/s 143(2) is not a curable defect. This view was reiterated by the Hon'ble Apex Court in the case of CIT Vs La....
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....r the purpose of block assessments. We do not agree with the submissions of the learned counsel for the Revenue, since we do not see any reason to restrict the scope and meaning of the expression "so far as may be, apply". In our view, where the assessing officer in repudiation of the return filed under Section 158-BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143." 6. The question, however, remains whether Section 292BB which came into effect on and from 01.04.2008 has effected any change. Said Section 292BB is to the following effect:- "292BB. Notice deemed to be valid in certain circumstances.-Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was - (a) Not served upon him; or (b) ....