TaxTMI 
TaxTMI 
2024 (4) TMI 1151
X X X X Extracts X X X X
X X X X Extracts X X X X
....11-12 wherein the impugned order has been assailed on the following grounds of appeal: "1) In the facts and circumstances of the case and in law the initiation of re-assessment proceedings u/s. 147 of the Income-tax Act, 1961 without fulfilling all necessary conditions stipulated under the Act is illegal and without jurisdiction. 2) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals) has erred in confirming addition of Rs. 30,70,500/- being cash deposit in State Bank of India, Branch-Nandini, Dist-Durg. 3) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals) has erred in confirming addition of Rs. 19,865/- being interest income. 4) The impugned order is bad in law and on facts. 5) The appellant reserves the right to addition, after or omit all or any of the grounds of appeal in the interest of justice." Also, the assessee has raised an additional ground of appeal which reads as under: "In the facts and circumstances of the case and in law, the assessment order is bad in law, illegal and without jurisdiction for the assessment order ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e case from ITO-1(4), Bhilai; therefore, the assessment order so passed by him cannot be sustained and was liable to be struck down on the said count itself. 6. Per contra, the Ld. Departmental Representative (for short 'DR') had relied on the orders of the lower authorities. 7. As the validity of the jurisdiction assumed by the A.O, i.e. ITO-2(1), Bhilai who had framed the assessment was challenged, therefore, the Ld. DR sought some time for obtaining the report of the A.O. on the aforesaid issue. 8. The Ld. D.R had on the next date of hearing of the appeal filed with us a letter of the ITO-2(1), Bhilai dated 14.03.2024 which reads as under: I find from a perusal of the aforesaid letter dated 14.03.2024 (supra) that the A.O., i.e. ITO-2(1), Bhilai had come forth with two-fold contentions, viz. (i) that the case of the assessee was transferred from ITO-1(4), Bhilai to ITO-2(1), Bhilai on 11.04.2018 by virtue of an order u/s. 120(2) of the Act as the jurisdiction over the case of the assessee was vested with ITO-2(1), Bhilai; and (ii) that as the jurisdiction over the assessee's case remained within the same range, therefore, there was no requirement for passing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....horise 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 reissue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred." (emphasis supplied by me) 10. Admittedly, it is a matter of fact borne from record that the case of the assessee was transferred by the ITO-1(4), Bhilai to ITO-2(1), Bhilai vide his letter dated 11.04.2018. On a perusal of the aforesaid letter dated 11.04.2018, it transpires that the ITO-1(4), Bhilai had stated that though the case of the assessee was reopened u/s. 148 of the Act by his office but since the jurisdiction over the said case was vested with....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... transfer of case 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, but it does not dispenses with the statutory requirement of recording of the reasons for doing so by the concerned authority. As such, in the case before me, where jurisdiction over the case of the assessee had been transferred to ITO-2(1), Bhilai from ITO-1(4), Bhilai, i.e. within the same city, though no requirement of affording a reasonable opportunity of being heard to the assessee was required, but the pre-condition contemplated under sub section (1) of Section 127 of the Act, i.e., recording of reasons for doing so by the appropriate authority could not have been done away with. 12. My aforesaid view that the requirement of recording reasons u/s. 127(1) of the Act for transferring of a case from one A.O. to another is mandatorily required, is supported by the judgment of the Hon'ble Supreme Court in the case of Ajanta Industries Vs. Central Board of Direct Tax (197....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner - (a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) Where the Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Off....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dictional officer and no order under section 127 is required to be passed. In my view, the letter/notice dated 21st October, 2009 is patently illegal since it has been held in this judgement that in case of transfer within the same city, locality or place although the opportunity of hearing as postulated in section 127(1) and (2) has been dispensed with, other statutory formalities which includes issuing an order are required to be complied with. Similarly transfer of files for the assessment years 2007-2008, 2008-2009 and the earlier years as intimated in the letter/notice dated 30th July, 2009 issued by the respondent No. 1 is also bad in law. The argument of the respondents that in case of intra city transfer no order is required to be passed, cannot be accepted in view of the settled position of law in Kashiram Aggarwalla (supra) and in S.L.Singhania (supra) wherein the validity of the orders were under challenge, meaning thereby an order recording transfer has to be on the records. The judgement in Subhas Chandra Bhaniramka (supra) where it has been held that in case of transfer of file under section 158BD resort has to be made to section 127 also applies in the instant case. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tandis for disposing off the captioned appeal i.e., ITA No. 311/RPR/2023 for assessment year 2012-13. In this case also, assessment framed by the A.O. u/s. 147 r.w.s. 144 of the Act dated 30.11.2018 is quashed for want of valid assumption of jurisdiction by the ITO-2(1), Bhilai in terms of the observations recorded by me while disposing of the appeal of the assessee in ITA No. 310/RPR/2023 for A.Y.2011-12. 18. In the result, the appeal filed by the assessee in ITA No. 311/RPR/2023 for A.Y.2011-12 is allowed in terms of the aforesaid observations. 19. In the result, both the appeals of the assessee are allowed in terms of the aforesaid observations. Order pronounced in open court on 09th day of April, 2024. ============= Document 1 Government of India Ministry of Finance: Department of Revenue OFFICE OF THE INCOME TAX OFFICER-2(1), Aayakar Bhawan,New Civic Centre, Bhilai, Distt: Durg (C.G.) Email- [email protected] F.No.ITO-2(1)/BHI/ITAT/2023-24 To, 1332 The Joint Commissioner of Income Tax, ITAT, Raipur Sub: - course Date: 14.03.2024 on of hearing Clarification sought by ITAT during the 06.03.2024 in the ....