INCOME TAX ACT, 1961

Section 127

Transfer of cases - Validity - No regular order issued under section 127 - Even AO did not act on objection filed by assessee

Assessee filed return of income on 31-3-2009 with AO Ward 39(4), New Delhi in view of change in office address to 46, Desh Bandhu gupta Raod, Paharganj, New Delhi, and getting the change of address duly recorded in PAN, declaring net taxable income of Rs. 3,31,147. The first notice under section 143(2) was issued on 30-9-2009 by AO, Ward 23(4) and served on the same date by affixture at old address : F-14, Geetanjali Enclave, New Delhi as stated by AO in the order, fixing case for 6-10-2009. None appeared on behalf of assessee. The first notice received by assessee was dated 20-7-2010 for 5-8-2010, which was served at the address : 4/6. DEsh Bandhu gupta Road, Paharganj, New Delhi - the correct address of assessee as per return and as per PAN card as stated by assessee, Since this notice was issued by AO Ward 23(4), assessee filed his objection on 5-8-2010 and also by Speed Post on 7-8-2010. AO Ward 23(4) issued another Notice dated 30-12-2010 for 10-12-2010 and assessee repeated his objection that proceedings being carried out by AO Ward 23(4) were illegal and witout jurisdiction as well as void ab initio. Hence, assessee was under no obligation had to respond to the same. AO Ward 23(4) passed an ex parte order but did not serve the same. However on 21-1-2011, the AO issued notice under section 221(1) to assessee intimating an outstanding demand. The assessee filed letter requesting AO to give certified copy of the notice of demand under section156 and order on the basis of which, said demand had been created. Since no action was taken on that request, assessee filed application for the same under RTI Act on 17-2-2011. Held: IT Act has given a proper guideline as to change of jurisdiction and its procedure. But in the case, there was gross violation of the procedure. For seeking transfer of jurisdiction, there is a prescribed procedure in Sec. 127 and the CIT-8 had to refer the issue to CIT-13 explaining reasons as to why he desired to get the case transferred to him. A regular order under section 127 had to be passed by Pr.CIT-13 and only then jurisdiction could be transferred from Ward 39(4) to Ward 23(4). On receipt of Notice, dated 20-7-2010 from ITO Ward-23(4), assessee filed his objection on 5-8-2010. Even on receipt of this objection, the AO did not act on it and no effort was made to comply with statutory provisions for acquisition of proper jurisdiction in accordance with law. Thus, the AO without deciding the issue of jurisdiction passed Assessment Order under section 144 which was not as per the mandate of the Income Tax Act, 1961. Assessee had intimated change of address within prescribed time and had taken all the necessary steps to object jurisdiction which was not at all considered by AO at the relevant time. In fact, AO did not have any jurisdiction. Thus, Assessment Order itself becomes null and void ab initio.