INCOME TAX ACT, 1961

Section 127

Transfer of case under section 127 - Validity - Absence of agreement between concerned jurisdictional Commissioners before passing order of transfer -

Assessee-individual was a partner of firm engaged in business of development and construction of buildings. Search and seizure operation was carried out at Kochi and order under sub-section (2) of section 127 of IT Act, 1961 was passed transferring case of assessee from Mumbai to Kochi. Assessee contended that procedure prescribed under section 127(2) was not complied with.Held: Furnishing of a proposal, may not amount to an agreement of designated higher authorities as contemplated under clause (a) to sub-section (2) of section 127. In Noorul Islam Educational Trust, Supreme Court considered transfer of assessment jurisdiction under section 127(2)(a). Supreme Court held that agreement between the two designated higher authorities was necessary. Revenue's stand that there was no disagreement between two Commissioners was rejected by Supreme Court holding that absence of disagreement cannot tantamount to agreement as visualized under section 127(2)(a) which contemplates a positive state of mind of the two jurisdictional Commissioners. Since before passing order under section 127(2), no opportunity of hearing was granted to assessee and hearing was granted after said decision was taken. Since there was no agreement between two jurisdictional PCIT to transfer assessment jurisdiction from Mumbai to Kochi, procedure prescribed under section 127(2)(a) was not complied with. It is trite that when a statute requires a thing to be done in a particular manner, then it has to be done in that particular manner.

Followed:Noorul Islam Educational Trust v. CIT-I & Ors. (2016) 76 Taxmann.com 144 (SC) : 2016 TaxPub(DT) 4641 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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