TaxTMI 
TaxTMI 
2026 (3) TMI 1742
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....d by me on 17/12/2025, and that there is a delay of 17 days in filing of appeal before the honorable ITAT. - That your honor, the delay in filing the appeal occurred due to the following reasons: - - The appeal against the above assessment order in Form 35 was originally filed by my previous legal counsel, CA Manoj Kumar Soni, Dhamtari. At the time of filing, he provided his own email address, [email protected], which belongs to him as the then legal counsel. - Subsequently, since CA Manoj Kumar Soni was not regularly handling appeal/litigation matters relating to income tax, he advised me to engage another counsel. Accordingly, I appointed CA Sakshi Gopal Agrawal to properly attend to the notices being issued and to make appropriate submissions during the appeal proceedings. - The newly appointed counsel thereafter submitted responses to the hearing notices issued under section 250 by the Hòn'ble CIT(A), NFAC, by logging into my ITBA portal. - However, as the email address of the previous counsel was mentioned in Form 35, the appeal order under section 250 passed by the CIT(A), NFAC dated 12/09/2025 was sent to that email....
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....e are that first of all, there is no valid order of transfer u/s. 127 of the Income Tax Act, 1961 (for short 'the Act') transferring the case from ITO-4(4), Raipur to ITO-3(2), Raipur. Second limb of argument of the Ld. Counsel is that ITO-3(2), Raipur had completed the assessment u/s.147 r.w.s. 143(3) of the Act, dated 19.11.2018 without issuance of notice u/s. 148 of the Act. Issuance of notice u/s.148 of the Act is "sine qua non" for framing assessment u/s.147 r.w.s. 143(3) of the Act. It was further submitted by the Ld. Counsel that notice u/s. 148 of the Act was issued by ITO-4(4), Raipur, whereas, finally the assessment was completed by ITO- 3(2), Raipur. Meaning thereby, the ITO-3(2), Raipur before framing the assessment u/s.147 r.w.s. 143(3) of the Act had never issued any notice u/s. 148 of the Act. 6. As regards the issue of non-availability of transfer order u/s. 127 of the Act, the Revenue itself admits the same as per report of the A.O dated 24.02.2026 filed by the Ld. Sr. DR. The said report of the A.O is extracted as follows: "Kindly refer to your letter F. No. Addl. CIT/RPR/Report/2025-26, dated 17.02.2026 on the subject captioned above. ....
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....l ground is answered affirmative, then the grounds on merits becomes academic. The Ld. Counsel for the assessee submitted that first notice u/s. 143(2) of the Act for A.Y.2016-17 for initiating limited scrutiny had been issued by the ITO, Ward-4(5), Raipur, dated 18.09.2017. Thereafter, another notice u/s. 142(1) of the Act for the same A.Y. dated 09.06.2018 was issued by the ITO, Ward-3(1), Raipur. That further, the Ld. Counsel has annexed the return of income and acknowledgement given by the department for the assessment year under consideration where the designation of the A.O (Ward-Circle) is appearing as Ward-3(1), Raipur. In this background, the Ld. Counsel submitted that firstly, if the original jurisdiction of the assessee is with ITO, Ward-4(5), Raipur who had initiated the proceedings for limited scrutiny and later on, transferred to the ITO, Ward-3(1), then as per the mandatory requirement of the Act, order of transfer u/s. 127 of the Act is required. However, no such order has been placed by the department and nothing is there on record that such order of transfer u/s. 127 of the Act was acquired; secondly, if it is accepted that the actual jurisdiction of the officer r....
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....also noted from the e-filed return and the acknowledgement of the department that the designation of the jurisdictional Assessing Officer is mentioned as ITO, Ward-3(1), Raipur. If that is so, then also, the first notice i.e. notice issued u/s. 143(2) of the Act, dated 18.09.2017 by the ITO, Ward-4(5), Raipur is without jurisdiction, invalid and bad in law. 5. In so far the reliance placed by the Ld. Sr. DR on the judgment of the Hon'ble Apex Court in the case of DCIT (Exemption) & Ors. Vs. Kalinga Institute of Industrial Technology (supra), wherein, the conduct of the assessee was determined while accepting or non-accepting the jurisdiction by way of participation in the proceedings, the word "participating" in this present context should not be construed in any manner given the text of the said decision to prevent the right of the assessee for challenging any legal issue including the issue of jurisdiction before any appellate forum as had been held by the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC). Rightfully so mentioned in the said judgment, the Hon'ble Apex Court held that when certain leg....
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....ing heard. This pre-requires issuance of a proper notice. The authority has to issue Show Cause to the party/assessee to explain and produce evidence before an adverse inference may be drawn against him. The notice should be specific and unambiguous so that proper compliance can be made by the assessee. The importance of a show cause notice has been reiterated by Supreme Court in the case of Umanath Pandey v. State of UP (2009) 12 SCC 40-43 wherein the Hon'ble Apex Court has held that "Notice is the first limb of this principle. It must be precise and unambiguous. It should appraise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated". In the case of Biecco Lawrie Ltd v. State of West Bengal (2009) 10 SCC 32, the Supreme Court observed that "One of the essential ingredients of fair hearing is that a person should be served with a proper notice, i.e. a person has a right to notice. Notice should be clear and precise so as to meet and make an effective defence. Denial of notice....
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....uthority to be exercised in a particular manner, then that authority has to exercise its power following the prescribed manner (CIT Vs. Anjum M.H. Ghaswala; State of Uttar Pradesh Vs. Singhara Singh). Any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid. xxxx xxxx xxxx xxxx xxxx 32. A statutory authority may lack jurisdiction if it does not fulfil the preliminary conditions laid down under the statute, which are necessary to the exercise of its jurisdiction. (Chhotobhai Jethabhai Patel and Co. V. Industrial Court, Maharashtra Nagpur Bench). There cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment. (Superintendent of Taxes Vs. Onkarmal Nathmal Trust). An order passed without jurisdiction is a nullity. Any consequential order passed or action taken will also be invalid and without jurisdiction. (Dwarka Prasad Agrawal V. B.D. Agrawal). Thus, the power of assessing officers to reassess is limited and based on the fulfilment of certain preconditions. (CIT Vs. Kelvinator of India Ltd.)" 9. With these observations, the assessment framed by the ITO-....
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....d a report dated 18.12.2025 which reads as follows: 5. Per contra, the Ld. Counsel for the assessee had filed written submissions submitting that the facts regarding the case of the assessee are substantially distinguishable from the facts of the case referred to by the Ld. Sr. DR. The relevant submission of the Ld. Counsel is extracted as follows: 6. In this regard, I refer to the order of the ITAT, SMC Bench, Raipur in the case of Virendra Gir Goswami Vs. Income Tax Officer, ITA No.411/RPR/2025, dated 22.07.2025 wherein similar issue has been dealt with by the Tribunal. For the sake of completeness, the relevant observations of the Tribunal are extracted as follows: "8. Reverting to the facts of the present case, it is noted that notice u/s. 148 of the Act has been issued by the ITO- 1(3), Bhilai and thereafter, assessment was completed by the ITO-2(2), Bhilai without any order of transfer as mandated u/s.127 of the Act by the competent authority. Therefore, such framing of assessment by the ITO-2(2), Bhilai in absence of valid order of transfer u/s.127 of the Act is held to be without inherent valid jurisdiction. For the sake of completeness, the relev....
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....d have been raised within one month from the date on which he was served with the notice u/s. 142(1) and 143(2) of the Act. However, in the present case, the assessee had failed to do so. The Ld. Sr. DR relied on the judgment of the Hon'ble Supreme Court in the case of DCIT (Exemption) & Ors. Vs. Kalinga Institute of Industrial Technology (2023) 151 taxmann.com 434 (SC), wherein the Hon'ble Apex Court has ruled that where the assessee had participated pursuant to the notice issued under Section 142(1) and had not questioned the jurisdiction of the assessing officer, then Section 124(3)(a) of the Income Tax Act precludes the assessee from questioning the jurisdiction of the assessing officer, if he does not do so within 30 days of receipt of notice under Section 142(1). 4. I have carefully considered the submissions of both the parties, considered the material available on record and facts and circumstances involved in the present case. In so far the legal issue is concerned, it is apparent from record as annexed in the paper book that the first notice u/s.143(2) of the Act, dated 18.09.2017 has been issued by the ITO, Ward- 4(5), Raipur. Thereafter, second notice u....
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....ITO, Ward-4(5), Raipur or ITO, Ward- 3(1), Raipur. There are plethora of judicial pronouncements wherein it had been held that the tax payer should be provided opportunity to prepare for his defence in timely and appropriate manner and if there is any ambiguity/confusion arising in the said hearing notice which prevents the assessee to defend himself, then such hearing notices and subsequent proceedings have to be struck down holding them to be arbitrary, bad in law. If this kind of ambiguity in issuance of notice by the appropriate authority is allowed then it would highly effect smooth running of business activities or for that matter generating income to the assessee tax payer. If the assessee tax payer is not able to earn income, then there is no question of paying any taxes. Therefore, the assessee should be allowed to prepare his defence as regards the proper jurisdiction before whom he shall make necessary compliances. 6. Derived from the Latin word "notitia", which means being known, notice is the starting of any hearing. Unless a person knows the issues of the case in which he is involved, he cannot defend himself. For a notice to be adequate it must contain- (a) ....
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....on over the assessee. When the issuance of notice and framing of assessment order suffers from lack of jurisdiction as enshrined in the statute then all subsequent proceedings becomes non-est in the eyes of law. 8. I find that the Hon'ble Supreme Court in its recent order passed in the case of Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) had, inter alia, observed that the order passed without jurisdiction is nullity. It was further observed that if a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. Elaborating further, the Hon'ble Apex Court had observed that any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid. Apart from that, it was observed that as there cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment, therefore, any consequential order passed or action taken will be invalid and without jurisdiction. For the sake of clarity, the observations of the Hon'ble Apex Court are culled out as under: "xxxx xxxx XXXX XXXX....
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.... hold that the assessment framed by ITO-2(2), Bhilai vide his order passed u/s. 147 r.w.s.143(3) of the Act, dated 24.12.2018 in absence of an order of transfer u/s. 127 of the Act and without any issuance of notice by him u/s.148 of the Act to the assessee, is held to be without valid jurisdiction, bad in law hence quashed. 10. Since the assessment is quashed thereafter all the other proceedings becomes non-est in the eyes of law. As the legal issue has been answered in favour of the assessee therefore the grounds on merits becomes academic only. 11. As per the aforesaid terms the grounds of appeal raised by the assessee stands allowed." 7. As per the aforesaid judicial pronouncement, on the same parity of reasoning and similar terms, I hold that assessment framed by the ITO-2(2), Bhilai vide order passed u/s. 143(3) r.w.s. 147, dated 15.12.2017 in absence of an order of transfer u/s.127 of the Act and without any issuance of notice by him u/s. 148 of the Act to the assessee is held to be without valid jurisdiction, bad in law, hence quashed. 8. That once the assessment is quashed, therefore, all the other subsequent proceedings becomes non-est ....
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....ITO-3(2), Raipur and secondly, assessment u/s.147 r.w.s. 143(3) of the Act was completed by the ITO-3(2), Raipur without issuance of any notice u/s.148 of the Act. In view thereof, I hold that ITO-3(2), Raipur who had completed the assessment in the case of the assessee u/s. 147 r.w.s. 143(3) of the Act did not have valid inherent jurisdiction to frame such assessment which, therefore, is arbitrary, void ab initio and bad in law, hence, quashed. 10. Since the assessment itself is quashed subsequent thereof all the other proceedings are non-est as per law. This legal issue is answered in favour of the assessee and against the Revenue, therefore, all other grounds becomes academic only. 11. In the result, appeal of the assessee is allowed as per afore-stated terms. Order pronounced in open court on 02nd day of March, 2026. ============= Document 1 -- Government of India, Ministry of Finance, Department of Revenue, OFFICE OF THE INCOMETAX OFFICER - 1(1) AAYAKAR BHAWAN, OPPOSITE ATMANAND SCHOOL, KRISHNA TALKIES ROAD, RISALI, BHILAI, DIST: DURG (CHATTISGARH) Dated: 18/12/2025 F.NO. ITO-1(1)/BHI/Report/ITAT/2025-26 To The Income Tax Officer - 1(1) Bhilai M....