TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 1197
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...., the Ld. Assessing Officer (AO) and the Ld. Members of the DRP have erred in law in determining the total income of the appellant at Rs. 3,53,43,56,141/- vide order u/s 143(3) r.พ.ร. 144C(13) of the Income Tax Act, 1961 dated 29.10.2024 as against the returned loss of Rs. 98,71,60,760/- and thereby making erroneous additions of Rs. 4,44,75,24,909/-. 3. That on the facts, law and in the circumstances of the case, the orders so framed u/s 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 dated 29.10.2024 as well as enabling orders (which are culminated in the said order dated 29.10.2024) are barred by, limitation in view of Sec. 153 r.w.s. 144C of the Act and hence, void-ab- initio, therefore, needs to be quashed/ annulled. 4. That on the facts, law and in the circumstances of the case, the Ld. AO, Ld. TPO as well as the Ld. DRP have erred in law in framing a high-pitched assessment u/s 143(3) r.w.s. 144C(13) of the Act by making erroneous, arbitrary and ad-hoc additions based on mere to Rs. and surmises amounting conjectures, suspicions 4,44,75,24,909/- without considering the submissions made by the appellant. 5. That on the facts, law and i....
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....f the appellant and thus the assessment so framed u/s 143(3) r.w.s 144C(13) of the act is void ab initio and deserves to be vitiated. 9. That on the facts, law and in the circumstances of the case, the assessment so framed u/s 143(3) r.w.s. 144C(13) of the Act suffers from statutory legal jurisdictional defect as the alleged information based on which the assessment has been initiated was found during the course of search action conducted u/s 132 of the Act and accordingly, the assessment should have been framed under the specified provisions of income tax law, i.e., u/s 148 r.w.s. 147 of the Act and therefore, the order so passed u/s 143(3) r.w.s. 144C(13) of the Act needs to be annulled or quashed on the basis of this ground alone. 10. 10. That on the facts, law and in the circumstances of the case, the Ld. DRP has erred in law in not entirely deleting the proposed erroneous additions amounting to Rs. 4,68,86,17,357/- while framing order u/s 144C(5) of the Act. 11. That on the facts, law and in the circumstances of the case, the Ld. AO, Ld. TPO as well as the Ld. DRP has erred in law in making arbitrary transfer pricing adjustment on account of purchase....
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.... sections wrongly particularly based on an erroneous assessment order passed u/s 143(3) r.w.s. 144C(13) of the Act. 19. That the appellant craves to add, amend, alter or withdraw any Ground or Grounds of Appeal." 2. The Ld. Counsel for the assessee at the outset submitted that the assessee is not willing to press ground No.3 of grounds of appeal which is on limitation in passing assessment order. In view of the submissions of the Ld. Counsel for the assessee ground No.3 of grounds of the assessee is dismissed as not pressed. 3. The Ld. Counsel for the assessee further submitted that assessee had raised additional grounds of appeal by way of a petition filed on 04.08.2025. Referring to the additional ground, Ld. Counsel for the assessee submitted that the assessee is challenging the jurisdiction of Ld.PCIT in transferring the case of the assessee from one range to another range by passing 127 order and consequential assessment order passed by the AO, since the Ld.PCIT who transferred the case of the assessee, had no jurisdiction to do so. 4. The Ld. Counsel for the assessee thus submitted that the additional ground raised is purely a legal ground and goes to the ro....
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.... Delhi. Thus, following the principles of Sublato Fundamento Cadit Opus (i.e., once the foundation is removed, the superstructure must fall), when the order conferring the jurisdiction upon the Ld. AO is itself invalid, vold-ab-initio and without jurisdiction then all the subsequent orders passed in pursuance of the aforesaid non-est order u/s 127 of the Act are also invalid, void-ab-initio and without jurisdiction. Copy of order u/s 127 of the Act dated 27.05.2022 is placed at Page Nos. 21- 22. 9. Therefore, it is submitted that the final assessment order passed u/s 143(3) r.w.s. 144C(13) of the Act dated 29.10.2024 so passed by the Ld. DCIT, Central Circle-30, New Delhi is bad in law, non-est and thus, void-ab-initio as the jurisdiction is assumed by Ld. DCIT, Central Circle-30, New Delhi based on an erroneous order passed u/s 127 of the Act by a non-jurisdictional authority, i.e., Ld. PCIT-10, Delhi and accordingly, the said order dated 29.10.2024 deserves to be quashed. 10. It is submitted that the Ld. PCIT-10, Delhi is a non-jurisdictional authority for the assessee company in view of the following submission (it is pertinent to mention here that the order u/s 127 of the....
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..../ PAN history :- a. Hon'ble Supreme Court of India in the case of Mansarovar Commercial (P.) Ltd. v. CIT [2023] 149 taxmann.com 178 (SC) b. High Court of Calcutta in the case of India Gycols Ltd. v. CIT [2005] 145 TAXMAN 549 (CAL.) vide order dated 07.10.2004 c. Hon'ble ITAT Chandigarh in the case of Deluxe Enterprises v. ITO, Ward-1 Solan [2017] 88 taxmnan.com 771 (Chandigarh-Trib.) d. Hon'ble Supreme court in the case of Bidi Supply Co. v. Union of India [1956] 29 ITR 717 (SC) ii. Crux of the pronouncements -aforementioned well-settled judicial pronouncements - It can be seen that the place of business has the crucial role to play in determining the jurisdiction of an assessee as the jurisdiction is also a matter of administrative convenience for both the assessee as well as the income tax authorities. Therefore, Sec. 124 of the Act specifically mandates that the Assessing Officer will assess the person who carries on his business or profession within his designated area. However, in the instant case of the assessee company, the said proposition of law has not been followed. In view of the afore-stated facts and law, ....
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....Sec. 120 of the Act and accordingly, the order u/s 127 of the Act dated 27.05.2022 for AY 2021-22 passed by the Ld. PCIT-10, Delhi and all the orders passed subsequent to the said order dated 27.05.2022 are without a valid jurisdiction and accordingly, are all a nullity & deserves to be quashed on this count itself. III. Jurisdiction cannot be assumed on the basis of PAN History i) No provision of law states that jurisdiction will be decided on the basis of the data available in PAN database. It is a settled law that jurisdiction cannot be assumed based on PAN History. In this regard, reliance is placed on the judgement delivered by the Hon'ble ITAT, Delhi in case of ACIT, Circle-27(1), Delhi v. M/s. UV Realtors Pvt. Ltd. in Ι.Τ.Α. No.6033/DEL/2016 (Copy enclosed at Page Nos. 96-119) wherein after deep examination of the issue of jurisdiction & taking into account numerous judgments of the Hon'ble High Courts Including Hon'ble Jurisdictional Delhi High Court, vide order dated 17.03.2021 It was held as under: "16. The entire case of the revenue hinges upon the interpretation that allotment of PAN is the criteria and foundation of....
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.... be quashed as per the provisions of law. Accordingly, Cross Objection of the assessee is allowed." (ii) Few other judgements, amongst many, taking the aforesaid similar view are cited herein below: - a. Dr. Hari Singh Chandel v. ITO [2024] 166 taxmann.com 353 (Raipur - Trib.) b. ITO v. NVS Builders (P.) Ltd. [2018] 91 taxmann.com 462/169 ITD 679 (Delhi - Trib.) c. Cosmat Traders (P.) Ltd. v. ITO [2021] 128 taxmann.com 174/189 ITD 504 (Kolkata - Trib.). In view of the above, jurisdiction assumed on the basis of PAN data is not valid under law and thus, if the Ld. PCIT-10, Delhi has assumed the jurisdiction on the basis of PAN data, the same is also invalid, illegal, bad in law and void-ab-initio. Though it is pertinent to mention here that the assessee company has mentioned its principal place of business under the Address column while filing the return of income for AY 2021-22, copy of ITR Acknowledgement is enclosed at Page no. 120 of this submission evidencing the said fact. IV. Bar of Sec. 124(3) is not applicable in case of inherent lack of Jurisdiction [Order u/s 127 of the Act dated 27.05.2022 has only been received on 02....
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....n over the case of assessee. However, no Order or Notification in support of the above contention have been produced on record to satisfy the requirements of the Law. Mere mentioning of such order, dated 09.12.2013, may not serve the purposes. The Id. D.R. also relied upon Judgment of the Hon'ble Delhi High Court in the case of Mega Corpn. Ltd., (supra), in which it is mentioned in para-2 that on 01.08.2007, a Notification was issued under section 120(2) conferring power upon Addl. CIT. Therefore, this Judgment would not support the case of the Revenue. It maybe noted further that provisions of Section 124(3) of the I.T. Act would not be applicable in the case of the assessee because Addl. CIT, Range-23, New Delhi did not have jurisdiction over the case of the assessee. Therefore, there is no question of raising any objection before him. It may, however, noted that Section 124 of the I.T. Act, would come into play when there was a direction or order issued under section 120(1)(2) of the I.T. Act, and A.O. have been vested with the jurisdiction over the case of the assessee. In that event, if there is any dispute of the jurisdiction of the A.O, such question will be determined i....
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.... order dated 16.08.2019 and ITO (IT) TDS-2 VS. Tata Steel Ltd. [2024] 163 TAXMANN.COM 345 (MUMBAI TRIB.) order dated 07.06.2024. iv) Furthermore, it is also worthwhile to mention here that recently the Coordinate bench of Hon'ble ITAT, Delhi had an occasion to deal with the jurisdiction issue in case of Vishan Gunna vs. ACIT [2025] 176 taxmann.com 959 (Delhi - Trib.). (Copy enclosed at Page Nos. 132-139) wherein the Hon'ble Tribunal vide order dated 25.07.2025 has observed & held as under: "11..... In the instant case, it is seen that the provision of section 127 of the Act, are not followed though the case has been transferred from one authority to another authority. Thus, without such order u/s 127 of the Act, jurisdiction cannot be conferred on the transferee AO. The Coordinate Bench of the Tribunal in the case of Raj Sheela Growth Fund (P.) Ltd. (supra) while dealing with this issue and also with the issue of objection u/s 124 has held the order as invalid by observing as under: there is an assignment of the jurisdiction of an Assessing Officer. Sub section (1) of Section 124 assigns Assessing Officer's jurisdiction linked with the territo....
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.... persons; (iii) Income or classes of income; or (iv) cases or classes of cases. but had rather assailed the validity of the assessment order passed by the ITO-4(1), Raipur in absence of an order of transfer that was statutorily required to have been passed by the CIT-2. Kolkata u/s. 127 of the Act, therefore, it would not be circumscribed by the restriction contemplated under subsection (3) of Section 124 of the Act. Accordingly, we are of a firm conviction that the judgment of the Hon'ble Supreme Court in the case of Kalinga Institute of Industrial Technology (supra) is distinguishable qua the issue involved in the present case of the assessee company before us. 49. We, thus, in terms of our aforesaid observations read in the backdrop of the facts involved in the present case before us and the judicial pronouncements, are of a firm conviction that in absence of any order of transfer passed by the CIT, Kolkata-2, Kolkata u/s. 127(2) of the Act, which was the very foundation for transferring the case of the assessee company from ITO-4(1), Kolkata to ITO-1(1), Raipur and finally to ITO 4(1), Raipur, the latter had invalidly assumed jurisdiction and framed the assessment ....
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....jurisdictional defects in the impugned assessment order framed u/s 143(3) r.w.s. 144C(13) of the Act dated 29.10.2024: S. No. Issue dealt up in the written submission (WS) Other Than Roca Bathroom Time barring & DIN issues Written Submission (WS) No. Pages 1 Order u/s. 127 of the Act dated 27.05.2022 has been passed by a Non Jurisdictional PCIT 1 1-168 2. DRP Order dated 30.09.2024 is barred by Limitation 2 1-31 3. Additions made based on third party information/ statements without providing (rather explicitly denying) the opportunity of Cross Examination 3 1-84 4 DRP erred in law in not deciding the jurisdictional and remanding back That same to the file of the Ld. AO and Ld. AO also ignored the directions of DRP which he is bound to follow. 4 1-57 5 Notice u/s. 143(2) issued by Non- Jurisdictional Assessing Officer 5 1-30 6 Wrong TP Adjustments made by adopting Dissimilar Comparables which do not pass the FAR Test. 6 1-80 7 Non-Application of Mind by the Ld. AO while farming assessment and by the Ld. Addl. CIT while granting approval. 7 1-57 8 Notice u/s. 143(2) of the Act has no....
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....fore, following the principles of Sublato Fundamento Cadit Opus (i.e., once the foundation is removed, the superstructure must fall), when the order conferring the jurisdiction upon the Ld. AO (I.e.. DCIT, Central Circle-30, Delhi) is itself invalid, void-ab-initio and without jurisdiction (i.e.. order u/s 127 dated 27.05.2022) then all the subsequent orders including the final assessment order passed u/s u/s 143(3) r.w.s. 144C(13) of the Act dated 29.10.2024 so passed by the Ld. DCIT, Central Circle-30. New Delhi in pursuance of the aforesaid non-est order u/s 127 of the Act, are also invalid, void-ab-initio, unlawful & without jurisdiction and accordingly, deserves to be quashed along with the erroneous demand thereof. [EMPHASIS SUPPLIED] 6) That as per the jurisdiction notification for the corporate charges in Delhi, the jurisdiction is assigned on the basis of the alphabet with which name of the company begins with. Copy of the jurisdiction notification as obtained from the income tax website has already been provided at Page Nos. 78-95 of WS-1. 7) That the name of the company begins with the alphabet "K" and as per the jurisdiction notification, the jurisdict....
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....N 2019-20 148 16.11.2022 K-1/124, LOWER GROUND FLOOR, CHITTRANJAN PARK, NEW DELHI, SOUTH DELHI, 110019 K-1/124, Lower Ground Floor, Chittranjan Park, New Delhi, South Delhi-110019 2020-21 139(1) 02.02.2021 K-1/124, LOWER GROUND FLOOR, CHITTRANJAN PARK, NEW DELHI, Kalkaji, SOUTH DELHI-110019 2020-21 143(1) 29.03.2021 K-1/124, LOWER GROUND FLOOR, CHITTRANJAN PARK, NEW DELHI, Kalkaji, SOUTH DELHI Delhi-110019 INDIA 2020-21 148 25.11.2022 K-1/124, LOWER GROUND FLOOR, CHITTRANJAN PARK, NEW DELHI, Kalkaji, SOUTH DELHI-110019 2021-22 139(1) 15.03.2022 3-L,03, UDYOG VIHAR, ECOTECH-II GREATER NOIDA, ECOTECH-II GREATER NOIDA, Gautam Buddha Nagar, 31-Uttar Pradesh, INDIA, 201306 2021-22 143(1) 05.07.2022 3-L,03, UDYOG VIHAR ECOTECH-II GREATER NOIDA, ECOTECH-II GREATER NOIDA, Gautam Buddha Nagar Uttar Pradesh 201306 INDIA 2022-23 139(1) 30.11.2022 3L Udhyog Vihar, Greater Noida, Ecotech-II, Ecotech II, Gautam Budha Nagar, 31-Uttar Pradesh, 91-INDIA, 201306 2022-23 143(1) 02.03.2023 3L Udhyog Vihar, Greater Noida Ecotech II, Gautam Budha Nagar Uttar Pradesh 201306 INDIA 2024-25 139(1) 07.....
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....oneous demand thereof and oblige." 12. On the other hand the Ld. DR strongly objected to the submissions of the assessee that the PCIT, Delhi-10 did not have jurisdiction to transfer the case of the assessee and consequently the assessment made by the PCIT, CC-30 is not a valid assessment. 13. The Ld. DR further made submissions as under :- "ii) Without prejudice to the above objection for admission of additional ground, it is submitted that an order u/s 127 of the Act is not appealable before the Hon'ble ITAT. It had been held to be an administrative order in number of judgments and the assessee did not challenge it before the Hon'ble High Court. Therefore, said order u/s 127 has attained finality and cannot be challenged indirectly before the Hon'ble ITAT in guise of challenging jurisdiction of the A.O. It is a settled preposition of law that what cannot be done directly as per law, cannot be permitted to be done indirectly too. Thus, assessee is precluded from questioning the validity of the transfer order u/s 127 in the guise of challenging the jurisdiction of the Assessing Officer before the Hon'ble ITAT. Further, if order under 127 of the Act ca....
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....mption of jurisdiction. The above section 124(3) does not make any distinguishment between different ways in which an AO has assumed jurisdiction. Such assumption of jurisdiction by AO can be on account of Board's Notification/order in accordance with section 124(1) r.w... 120 of the Act or in accordance with order passed u/s 127 of LT. Act by the Ld. PCTT. Therefore, the contention of assessee that provisions of section 124(3) of the Act would not be applicable to issue of jurisdiction assumed consequent to order u/s 127 is without any merit and liable to be rejected. Such exception clause can not be read into above mentioned section in light of unambiguous language used. It is pertinent to emphasize that as stated earlier. before Hon'ble Tribunal, validity of order under section 127 of the Act can not be called in question now. Therefore, at this stage, the question which can be raised before this hon'ble Bench can be only about assumption of jurisdiction by the AO and the assessee is barred to raise such question about jurisdiction of the Assessing Officer in light of provision of section 124(3) of the Act. (v) The Assessee also contended that PCIT, Delhi-10....
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.... separate legal remedy available. If there was no order under section 127 of the Act in place, then situation would have been very different. (vii) Further, centralization of the case of the assessee to central charge in the same station for coordinated investigation is an administrative exercise of the department and it does not cause any kind of prejudice to the assessee. The assessee could have challenged such an order by way of Writ Petition before Hon'ble High Court and assessee did not choose to do so, It implies that assessee was not aggrieved with the said transfer of jurisdiction within the same city. Now, by allowing the assessee to call in question order under section 127 of the Act before Hon'ble Tribunal, the assessee can not be allowed to avail new remedy, which it is not legally entitled to in such matters. Further, it important to note that in case, assessee's contention is accepted, the end effect of the same will be to hold the jurisdiction of the Assessing officer as invalid/bad in law. This will be clearly in contravention to provision of section 124(3) of the Act as jurisdiction of AO can be held to be bad in law only if it is called in que....
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....bjection is factually and legally incorrect. From the above table, it is evident that in the ITR filed from the AY 2019-20 to 2020-21, the address mentioned is K-1/124, Lower Ground Floor, Chittranjan Park, New Delhi, South Delhi-110019. It is pertinent to note that for the first time, in the ITR filed on 15.03.2022 for AY 2021-22, the assessee had mentioned the address of Greater Noida. But, again in the return of income filed for A.Y. 2020-21 under section 148 of the Act on 25.11.2022 after passing of order under section 127 of the Act, the address given by the assessee was of South Delhi. Thereafter, even in ITR filed for AY 2024-25 as late as on 07.11.2024, the assessee has again given its the address of Delhi i.e. B-1, 26-27, Top Floor, Community Centre, Janakpuri, New Delhi-110058. It is also required to be noted that as per PAN database, the address given by the assessee is mentioned as K- 1/124, Lower Ground Floor, Chittranjan Park, New Delhi, South Delhi-110019. There has been no change made in this PAN address by the assessee. This goes to show that the assessee has been consistently maintaining its address in Delhi for commercial/business purposes and using the ....
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.... PCIT, Delhi-10 to consider that above address in Delhi was not a genuine one and had to be discarded. It is also pertinent to mention that the Income-tax Department's e-filing portal provides facility titled "Know Your AO", wherein the assessee can verify the jurisdictional Assessing Officer linked to the PAN at any point of time. Despite availability of such facility, no action was taken by the assessee to seek transfer of jurisdiction from the charge of PCIT, Delhi-10 to the charge, which is claimed to be having jurisdiction based on address in Greater Noida. Therefore, now the assessee can not be allowed to get benefit out of the claim that its principal place of business was not in Delhi and was in Greater Noida, particularly when department acted in good faith based on address given by assessee itself in PAN, ITR and assessee did not bring any information to the knowledge of the Pr. CIT, Delhi-10 requesting for change in address to Greater Noida and for consequent change in jurisdiction. In other words, the interest of the Revenue can not be prejudiced by way of accepting contention of the assessee, when assessee itself had provided address based in Delh....
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.... assessee are auto populated from multiple sources, including but not limited to: PAN database Address mentioned in the Income-tax Return (ITR) E-filing account profile of the assessee Information available in the Insight/360-degree profile Other departmental databases The system provides the Assessing Officer with multiple available addresses, and the AO is empowered to select one or more addresses for issuance of notices and communications, with the objective of ensuring effective service upon the assessee. Issuance of notice at an address located at Noida, even if different from the address mentioned in the PAN database, does not imply or amount to acceptance by the Department that the assessee was not under the jurisdiction of Delhi. It is merely a procedural step adopted to ensure service and cannot be construed as determinative of jurisdiction. Jurisdiction is determined strictly in accordance with statutory provisions and administrative orders, including the valid order passed u/s 127, and not on the basis of the address to which a particular notice is sent. Hence, in view of the above facts, the objection raised....
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....Kashiram Agarwala vs Union of India (Supreme Court 1965 AIR 1028, 1965 SCR (1) 671, AIR 1965 SUPREME COURT 1028) In Kashiram Agarwala (Aggarwalla) v. Union of India, the Supreme Court examined the scope of Section 127 of the Income-tax Act, 1961, which empowers tax authorities to transfer cases from one Assessing Officer to another. The Court clarified that although Section 127(1) generally requires that reasons for transfer be recorded and that the assessee be given a reasonable opportunity of being heard, these requirements are not absolute. The proviso to Section 127(1) creates an important exception: when a transfer is made within the same locality, such as between officers in the same city or jurisdiction, the obligation to record reasons and provide a hearing does not apply. The Supreme Court held that such intra-locality transfers are purely administrative in nature, undertaken for the administrative convenience of the department, such as workload distribution or internal efficiency. The Court emphasized that these transfers do not ordinarily cause prejudice or hardship to the assessee, since the place of assessment and overall jurisdiction remain substantially unch....
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....jimal & Sons vs Commissioner Of Income-Tax, Delhi High Court ([1982]138ITR391 (DELHI) Para 36... "We entirely agree with the assessed that if a case falls under s. 124(4) then the question of jurisdiction can be resolved only in the manner outlined in that section and it cannot be challenged before or decided by the appellate authorities. In fact this position cannot be challenged in view of the Supreme Court's decision in Seth Teomal [1959] 36 ITR 9. Since the statute itself provides for a remedy in cases which fall under sub-s. (4), the assessed cannot bypass that remedy and seek to agitate the matter in appeals before the appellate authorities in a case where sub-s. (4) applies either where he has raised an objection within the time outlined by the Act and that objection had bee determined one way or the other or again where he has failed to raise an objection within the time outlined in the Act." (Emphasis Supplied) The passage above reiterates the settled legal position that where a case falls within the scope of section 124(4) of the Income-tax Act, the question of jurisdiction must be resolved strictly in the manner prescribed under that provision and c....
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....on of the DCIT, Central Circle-30 is without merit and deserves to be rejected. The appeal may kindly be fixed for hearing on merit." 14. Heard rival submissions, perused the orders of the authorities below and the materials placed before us. The question here for adjudication is as to whether the order passed u/s. 127 of the Act dated 27.05.2022 by the Ld. PCIT, Delhi-10 is invalid, non-est and void ab initio as the same has been passed by the non jurisdictional income tax authority and consequentially all the subsequent orders including the final assessment order passed pursuant to the order u/s. 127 are null and void and being without jurisdiction. 15. In this case the order u/s. 127 of the Act was passed on 27.05.2022 by Ld. PCIT, Delhi-10 transferring the jurisdiction of the AO to assess the assessee from Ward-31, New Delhi to Central Circle-30, Delhi which is as under :- 16. Pursuant to the said order the AO passed draft assessment order u/s. 144C(1) dated 30.12.2023 on which the assessee filed objections before the DRP and the DRP passed order on 13.09.2024 and the AO passed final assessment order u/s. 143(3) r.w.s. 145C(13) on 23.10.2024 giving effect to the direct....
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....(3) does not apply when there is inherent lack of jurisdiction on the part of the Ld. PCIT, u/s. 127 of the Act. It was also contended that the assessee has not challenged the territorial jurisdiction of the AO rather challenged the assumption of jurisdiction of Ld. PCIT in view of invalid and non jurisdictional order passed u/s. 127 of the Act dated 27.05.2022, which shows that there is inherent lack of jurisdiction on the part of the Ld. PCIT-10. Therefore, it is the contention that as per settled law the bar of Section 124(3) is not applicable on the objection raised by the assessee company against invalid order u/s. 127 of the Act by Ld. PCIT. Reliance was placed on the following decisions :- 1. Vishan Gunna Vs. ACIT (2025) 176 taxman.com 959 dated 25.07.2025 2. Nasir Ali Vs. Addl. CIT (2020) 113 taxmann.com 515 Delhi dated 25.09.2019 which was affirmed by the Hon'ble Delhi High Court in ITA No.133/2021 dated 20.03.2024 3. ITO Vs. Baghna (2025) 171 Taxmann.com 689 Raipur dated 31.01.2025 20. We find considerable merit in the contentions of the assessee that the order u/s. 127 of the Act dated 27.05.2022 has been passed by non jurisdictional Ld. PCI....
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.... appeal with ITO, Ward-22(2) Delhi, who was having jurisdiction over the case of the assessee. The ITO, Ward-22(2) issued several statutory notices to the assessee for completion of the assessment for assessment year under appeal as referred to in the arguments of the learned Counsel for the Assessee. Thereafter, the DCIT, Circle-22(1) issued three statutory notices for completion of the assessment. Thereafter, from December, 2013 the assessment have been carried out by the Addl. CIT Range- 23, New Delhi. However, no jurisdiction order of DCIT, Circle-22(1) or Addl. CIT, Range-23 have been produced on record. The asset Α.Ο. answer have been given to the assessee as to how the Addl. CIT which also no specific answer have been produced on record. No order under section 120 or transferring the case to the AO under section 127 of the I.T.Act, to which also no specific answer have been given to the assessee s to how the Addl. CIT, Range-23, New Delhi, was conferred with the jurisdiction to decide the assessee CIT, the information assessment for assessment year under appeal. Section 2(7A) of the I.T. Act, provides definition of the "Assessing Officer which is reproduced abo....
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....er by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply. 5) The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary appropriate for the proper management of the work, require two or more Assessing Officers (whether not of the same class) to exercise and perform, concurrently, the powers and functions in respect of my area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and where such powers and functi....
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....sioners or Principal Commissioners or Commissioners, by the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners concerned or, if they are not in agreement, by the Board or by such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal 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 115WD or amber 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 sub-section (2) of section 115WE or sub-section (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 (2) of section 115WD or subsection (1) off section 142 or under sub-section (1) of section 115WH or under section 148 f....
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....y or under this Act in respect of any specified area or person or class of persons or incorte and where any order is made under this clause, reference in any other provisions of this Act or in any Rules or class of income or case or class of cases, shall be exercised or perform by Addl. Commissioner or others made thereunder to the A.O. shall be deemed to be reference to the Addl Commissioner or Others by whom de powers and functions are to be exercised or perform under such order and any provisions of this Act approval or sanction of the Joint clear that the Board may assign the power to any Income Tax Authority to exercise powers of the A.O. having regard to territorial area etc., or the Board may authorise or empower Pr. Director General, Pr. Chief Commissioner etc., to issue order in writing to assign powers of the A.O. to other Authorities including Addl. Commissioner of Income Tax as Assessing Officer. Considering the provisions of Section 2(7A) of the LT. Act, 1961, which defines the definition of the Assessing Officer would make it clear that Addl. Commissioner of Income Tax could function as an Assessing Officer when jurisdiction have been assigned to him by virue of the d....
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....the totality of the facts and circumstances of the case, we are of the view that Addl. CIT, Range-23, New Delhi do not have jurisdiction over the case of assessee and since he did not assume the jurisdiction legally and validly, therefore, the impugned assessment order framed by him is vitiated and illegal and without jurisdiction. In view of the above discussion, we set aside the Orders of the authorities below and quash the impugned orders. Resultantly, all additions stand deleted. The Additional Ground No.1 of appeal of assessee is allowed. 8. In the result, appeal of Assessee allowed." 24. As could be seen from the above the Tribunal held that provisions of section 124(3) could not have applied in the case where the AO did not have jurisdiction over the cases of the assessee, therefore, there is no question in raising any objection before him. It was further held that provision of section 124 would come into play only when there was a direction or order issued u/s. 127(2) of the Act and AO has been vested with the jurisdiction over the assessee. 25. In the case before us since the Ld. PCIT-10, Delhi was holding charge of non corporate assessee lacked inherent jur....
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....al justice inasmuch as no reasons were given nor communicated in the said order. The learned single Judge after having called for the relevant file found that certain reasons were recorded by the Central Board prior to the passing of the impugned order and held that mere failure to communicate the reasons to the appellants was not fatal to the order. The writ petition was, therefore, dismissed. The appellants' Letters Patent Appeal before the Division Bench of the High Court also met with the same fate. Hence this appeal by special leave. The short question that arises for consideration is whether failure to record the reasons in the order which was communicated to the appellants is violative of the principles of natural justice for which the order should be held to be invalid. Section 5(7A) was the corresponding section in the Income-tax Act, 1922 (briefly the old Act). The section may be set out: "The Commissioner of Income-tax may transfer any case from one Income-tax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income-tax Officer to another. Such transfer may be made at any sta....
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....or Income-tax Officers to any other Income-tax Officer or Income-tax Officers and the offices of all such Income- tax Officers are situated in the same city, locality or place: Provided further that where any case has been transferred from any Income-tax officer or Income-tax Officers to two or more Income-tax Officers, the Income-taxers to whom the case is so transferred shall have concurrent jurisdiction over the case and shall perform such functions in relation to the said case as the Board or the Commissioner (or any Inspecting Assistant Commissioner authorised by the Commissioner in this behalf) may, by general or special order in writing, specify for the distribution and allocation of the work to be performed". (2) The transfer of a case under subsection (1) may be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Income-tax Officer or Income-tax Officers from whom the case is transferred. Explanation:-In this section and in sections 121, 123, 124 and 125, the word 'case' in relation to any person whose name is specified in any order or direction issued thereunder means all p....
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.... necessary or desirable for the Commissioner of Income-tax or the Central Board of Revenue, as the case may be, to transfer his case under section 5(7A) of the Act and it will also help the Court in deter mining the bona fides of the order as passed if and when the same is challenged in Court as mala fide or discriminatory. It is to be hoped that the Income-tax authorities will observe the above procedure wherever feasible". This judgment was rendered by this Court on December 21, 1956, and we find that in the 1961 Act section 127 replaced section 5(7A) where the legislature has introduced, inter alia, the requirement of recording reasons in making the order of transfer. It is manifest that once an order is passed transferring the case file of an assessee to another area the order has to be communicated. Communication of the order is an absolutely essential requirement since the assessee is then immediately made are of the reasons which impelled the authorities to pass the order transfer. It is apparent that if a case file is transferred from the usual place of residence or office where ordinarily assessments are made to a distant area, a great deal of inconvenience and ev....
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....tted that this Court took the view that orders under section 127(1) are held in that decision to be purely administrative in nature" passed for consideration of convenience and no possible prejudice could be involved in the transfer. It was also held therein that under the proviso to section 127(1) it was not necessary to give the appellant an opportunity to be heard and there was consequently no need to record reasons for the transfer. This decision is not of any assistance to the Revenue in the present case since that was a transfer from one Income-tax Officer to another Income-tax Officer in the same city, or, as stated in the judgment itself, in the same locality" and the proviso to section 127(1), therefore, applied. When law requires reasons to be recorded in a particular order affecting prejudicially the interests of any person, who can challenge the order in court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated Mr. Sharma also drew our attention to a decision of this Court in S Narayanappa and Others vs. Commissioner of Income-tax, Bangalore....
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.... consequentially all other proceedings including the final assessment order dated 29.10.2024 passed u/s. 143(3) r.w.s. 144C (13) pursuant to the order passed u/s. 127 by the Ld. PCIT, Delhi-10 are without jurisdiction bad in law and are a nullity in the eyes of law and thus they are hereby quashed and the additional ground raised by the assessee is allowed. 29. Since we have quashed the final assessment order allowing additional ground No.1, all other additional grounds and the grounds on merits need not be adjudicated as they become only academic in nature and they are left open and the assessee is at liberty to agitate those grounds as and when required. 30. In the result, the appeal of the assessee is partly allowed as indicated above. Order pronounced in the open court on 20.01.2026. ============= Document 1 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX PCIT, Delhi-10 To. CENTRAL CIRCLE 30, DELHI (NEW DELHI) (PRADUMAN MEENA) 2nd floor, ARA Centre, Jhendewalan Extension, NEW DELHI 110055,Delhi India Dated: DIN & Order No : ITBA/COM/F/17/2022-23/1043224417(1) 27/05/2022 Sir/ Madam/ M/s....