INCOME TAX ACT, 1961

Section 127

Transfer of case - Validity - Transfer of case of assessee without following the procedure for the transfer of a case -

The issue raised by assessee was that AO had framed assessment under section 143(3) read with section 263 without having jurisdiction over assessee, therefore, the order is void ab initio. Assessee submitted that case was transferred from the jurisdiction of Ahmedabad to DCIT, Ahmedabad to present ITO, Ahmedabad without following the procedure for the transfer of a case of an assessee from the jurisdiction of one AO to another as prescribed under section 127. Assessee was served with any order passed by the competent authority transferring her case from ITO Ahmedabad to DCIT, Ahmedabad and then again to present AO. Held: Jurisdiction of assessee from one AO to other AO can be transferred by Director General, PCIT or CIT only after recording the reason and giving an opportunity of being heard to assessee in pursuance to the provisions specified under section 127. However, there was no compliance of the provision of section 127 for transferring the case of assessee from ITO to DCIT and then further transfer to ITO. Therefore, assessment order passed under section 143(3) by DCIT and consequential assessment order under section 143(3) by AO was invalid as such income tax authorities never had jurisdiction over the assessee in the manner provided under section 127.

REFERRED : Ajantha Industries & Ors. v. CBDT & Ors. (1976) 102 ITR 281 (SC) : 1976 TaxPub(DT) 0601 (SC)

FAVOUR : In assessee' favour

A.Y. : 2005-06

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