Chanakya Finvest (P.) Ltd. v. ITO

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The Tax Publishers2013 TaxPub(DT) 1919 (Kol-Trib) : (2013) 143 ITD 0378 : (2013) 157 TTJ 0625 : (2013) 093 DTR 0149 Income Tax Act, 1961 --Transfer of case--Jurisdiction Subsequent proceedings after transfer of case--Commissioner, Delhi transferred assessee's case from assessing officer New Delhi to assessing officer Kolkata, on 4-1-2010 Subsequently assessing officer New Delhi issued notice under section 148 to reopen assessment of assessee on 26-3-2010. Assessee contended that assessing officer New Delhi did not have jurisdiction to issue notice under section 148 as its case was transferred is assessing officer Kolkata. Assessing officer New Delhi noted that at that time records were not transferred to assessing officer Kolkata held that, thus that jurisdiction lay with assessing officer New Delhi, holding the charge over case and all actions per law were required to be initial or taken by that assessing officer only, More over proceedings under section 148 were be valid by Commissioner (Appeals) in absence of any objection being raised before assessing officer issue the notice under section 148. *Held:* Not justified. When any case of a particular assessee was transferred from one assessing officer to another assessing officer, whether within or outside State. All proceedings which were pending against assessee under the Act were meant to be transferred simultaneously, and all proceedings under Act which may be commenced after date of such transfer would be also included therein, in case of pending proceedings, it would not be necessary to reissue any notice already issued by assessing officer from whom case was transferred. When any case of a particular assessee which is transferred from one assessing officer to another assessing officer, whether within the state or without it, all proceedings which are pending against the assessee under the Act in respect of the same year as also previous years are meant to be transferred simultaneously and all proceedings under the Act which may be commenced after the date of such transfer in respect of any year whatever are also included therein, so that the assessing officer to whom such case is transferred would be in a position to continue the pending proceedings and also institute further proceedings against the assessee in respect of any year. The proceedings pending at the date of transfer can be thus continued but in the case of such proceedings the provisions in regard to issuance of notices contained in the main body of section 127(2) would apply and it would not be necessary to reissue any notice already issued by assessing officer from whom the case is transferred. (Para 6) After going through the provisions of sections 120, 124 and 127, the plenary powers regarding conferment of jurisdiction has been vested, by delegation by the statute, on the Commissioner having jurisdiction in respect of assessment of the case. This power, in the absence of any prohibition or restriction, empowers the Commissioner of Income Tax to effect realignment of jurisdiction. The Commissioner of Income Tax by order or direction, while divesting these authorities of the power in respect of performance of their duties under the Act conferred earlier, may confer such jurisdiction to other authorities under the Act, as he may direct. As soon as such order or direction is made completely divesting the jurisdiction of the authorities so long so empowered, all proceedings including those which might arise thereafter, before them as also proceedings pending before them, come within the jurisdiction of the newly conferred authorities unless any specific provision is made in respect of any pending proceedings. Such consequence is inevitable when there is withdrawal of jurisdiction, which means automatic extinction of jurisdiction of one authority with simultaneous conferment of jurisdiction on another authority under the Act in respect of all pending and future proceedings. Explanation to section 127 of the Act makes it clear that the word 'case' in relation to any person whose name is specified in the order of transfer means all proceedings under the Act in respect of any year which may be pending on the date of the transfer, and also includes all proceedings under the Act which may be commenced after the date of transfer in respect of any year. The word 'case' is thus used in a comprehensive sense of including both pending proceedings and proceedings to be instituted in the future. Consequently, an order of transfer can be validly made even if there be no proceedings pending for assessment of tax and the purpose of the transfer may simply be that all future proceedings are to take place before the officer to whom the case of the assessee is transferred. Order passed by CIT-I, Delhi, transferring jurisdiction from ITO, Ward-3(3), New Delhi on 4-1-2010, subsequent action of the assessing officer, i.e. ITO, Ward-3(3), New Delhi issuing notice under section. 148 dated 25-3-2010 is invalid because the jurisdiction from ITO, Ward-3(3), New Delhi by CIT-I, Delhi to ITO, Ward-6(1), Kolkata. At the time of passing of order ITO, Ward-6(1), Kolkata, there is no proceedings pending before the ITO, Delhi and the transfer order for jurisdiction was passed on that date. The CIT, Delhi-1 passed order under section. 127 on 01-01-2010 transferring the jurisdiction of the assessee to ITO, Wd-6(1), Kolkata and the jurisdiction in respect to every action for all assessment years lies with the ITO, Wd-6(1), Kolkata and only he is competent to issue notice under section. 148. In such circumstances, the notice issued under section 148 by the Income Tax Officer, Ward-3(3), New Delhi is bad and illegal in view of the clear provisions of the Act because an order for transfer of case was validly made by Commissioner and the purpose for transfer was simply that all future proceedings are to be taken by ITO, Ward-6(1), Kolkata with effect from 4-1-2010.. Hence, the notice issued under section 148 dated 25-3-2010 is quashed. [Para 8] SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 1919 (Kol-Trib) : (2013) 143 ITD 0378 : (2013) 157 TTJ 0625 : (2013) 093 DTR 0149

Income Tax Act, 1961

--Transfer of case--Jurisdiction Subsequent proceedings after transfer of case--Commissioner, Delhi transferred assessee's case from assessing officer New Delhi to assessing officer Kolkata, on 4-1-2010 Subsequently assessing officer New Delhi issued notice under section 148 to reopen assessment of assessee on 26-3-2010. Assessee contended that assessing officer New Delhi did not have jurisdiction to issue notice under section 148 as its case was transferred is assessing officer Kolkata. Assessing officer New Delhi noted that at that time records were not transferred to assessing officer Kolkata held that, thus that jurisdiction lay with assessing officer New Delhi, holding the charge over case and all actions per law were required to be initial or taken by that assessing officer only, More over proceedings under section 148 were be valid by Commissioner (Appeals) in absence of any objection being raised before assessing officer issue the notice under section 148. Held: Not justified. When any case of a particular assessee was transferred from one assessing officer to another assessing officer, whether within or outside State. All proceedings which were pending against assessee under the Act were meant to be transferred simultaneously, and all proceedings under Act which may be commenced after date of such transfer would be also included therein, in case of pending proceedings, it would not be necessary to reissue any notice already issued by assessing officer from whom case was transferred.

When any case of a particular assessee which is transferred from one assessing officer to another assessing officer, whether within the state or without it, all proceedings which are pending against the assessee under the Act in respect of the same year as also previous years are meant to be transferred simultaneously and all proceedings under the Act which may be commenced after the date of such transfer in respect of any year whatever are also included therein, so that the assessing officer to whom such case is transferred would be in a position to continue the pending proceedings and also institute further proceedings against the assessee in respect of any year. The proceedings pending at the date of transfer can be thus continued but in the case of such proceedings the provisions in regard to issuance of notices contained in the main body of section 127(2) would apply and it would not be necessary to reissue any notice already issued by assessing officer from whom the case is transferred. (Para 6) After going through the provisions of sections 120, 124 and 127, the plenary powers regarding conferment of jurisdiction has been vested, by delegation by the statute, on the Commissioner having jurisdiction in respect of assessment of the case. This power, in the absence of any prohibition or restriction, empowers the Commissioner of Income Tax to effect realignment of jurisdiction. The Commissioner of Income Tax by order or direction, while divesting these authorities of the power in respect of performance of their duties under the Act conferred earlier, may confer such jurisdiction to other authorities under the Act, as he may direct. As soon as such order or direction is made completely divesting the jurisdiction of the authorities so long so empowered, all proceedings including those which might arise thereafter, before them as also proceedings pending before them, come within the jurisdiction of the newly conferred authorities unless any specific provision is made in respect of any pending proceedings. Such consequence is inevitable when there is withdrawal of jurisdiction, which means automatic extinction of jurisdiction of one authority with simultaneous conferment of jurisdiction on another authority under the Act in respect of all pending and future proceedings. Explanation to section 127 of the Act makes it clear that the word 'case' in relation to any person whose name is specified in the order of transfer means all proceedings under the Act in respect of any year which may be pending on the date of the transfer, and also includes all proceedings under the Act which may be commenced after the date of transfer in respect of any year. The word 'case' is thus used in a comprehensive sense of including both pending proceedings and proceedings to be instituted in the future. Consequently, an order of transfer can be validly made even if there be no proceedings pending for assessment of tax and the purpose of the transfer may simply be that all future proceedings are to take place before the officer to whom the case of the assessee is transferred. Order passed by CIT-I, Delhi, transferring jurisdiction from ITO, Ward-3(3), New Delhi on 4-1-2010, subsequent action of the assessing officer, i.e. ITO, Ward-3(3), New Delhi issuing notice under section. 148 dated 25-3-2010 is invalid because the jurisdiction from ITO, Ward-3(3), New Delhi by CIT-I, Delhi to ITO, Ward-6(1), Kolkata. At the time of passing of order ITO, Ward-6(1), Kolkata, there is no proceedings pending before the ITO, Delhi and the transfer order for jurisdiction was passed on that date. The CIT, Delhi-1 passed order under section. 127 on 01-01-2010 transferring the jurisdiction of the assessee to ITO, Wd-6(1), Kolkata and the jurisdiction in respect to every action for all assessment years lies with the ITO, Wd-6(1), Kolkata and only he is competent to issue notice under section. 148. In such circumstances, the notice issued under section 148 by the Income Tax Officer, Ward-3(3), New Delhi is bad and illegal in view of the clear provisions of the Act because an order for transfer of case was validly made by Commissioner and the purpose for transfer was simply that all future proceedings are to be taken by ITO, Ward-6(1), Kolkata with effect from 4-1-2010.. Hence, the notice issued under section 148 dated 25-3-2010 is quashed. [Para 8]