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Facts
The assessee, Nandlal Commercial Private Limited, filed an appeal against the order of the National Faceless Appeal Centre, Delhi. The core issue revolved around the validity of the assessment order for AY 2012-13. The assessee argued that the assessment was void ab initio due to procedural irregularities, specifically the lack of a mandatory notice under section 143(2) issued by the assessing officer who ultimately framed the assessment.
Held
The Tribunal held that the assessment order was bad in law because the notice under section 143(2) was issued by ITO, Ward 44(4), Kolkata, while the assessment itself was framed by ITO Ward 3(3), Kolkata. The Tribunal relied on judicial precedents, including decisions from the Hon'ble Kolkata High Court, which stipulate that the officer who frames the assessment must be the one who issues the jurisdictional notice under section 143(2).
Key Issues
Whether the assessment order is liable to be quashed for not being framed by the Assessing Officer who issued the mandatory notice under Section 143(2) of the Income Tax Act, and for procedural irregularities in the transfer of jurisdiction.
Sections Cited
143(2), 120, 127, 143(3), 68, 154, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 03.10.2024 for the AY 2012-13.
The assessee has raised additional grounds which is extracted as under: - “1. For that on the facts of the case, the assessment order is void ab initio in as much as, no mandatory notice u/s. 143(2) of the 1.T. Act issued by ITO Ward-13(3), Kolkata before he framed to assessment stage, hence the assessment proceedings and assessment order was bad in law and hence the same be quashed.
2. For that on the facts of the case, ITO Ward-44(4), Kolkata was not issued notice as per Jurisdictional Transfer Provision of the I.T Rules to ITO Ward-13(3), Kolkata and
The ld. Counsel for the assessee has raised the above additional ground for the first time before the Tribunal which has not been raised before either of the authorities below but since, the issue raised goes to the root of the matter and is a legal issue respectfully following the decisions of the Hon'ble Apex court in the case of Jute Corporation of India Ltd. Vs CIT in 187 ITR 688(SC) and National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 (SC), we are inclined to admit the same for adjudication.
“10. It is evident that respondent No. 2 had sought to justify his action by stating that the jurisdiction automatically gets vested with the jurisdictional officer and no order under section 127 is required to be passed. In my view, the letter/notice dated October 21, 2009 is patently illegal since it has been held in this judgment that in case of transfer within the same city, locality or place although the opportunity of hearing as postulated in section 127(1) and (2) has been dispensed with, other statutory formalities which includes issuing an order are required to be complied with. Similarly transfer of files for the assessment years 2007-08, 2008-09 and the earlier years as intimated in the letter/notice dated July 30, 2009 issued by respondent No. 1 is also bad in law. The argument of the respondents that in case of intra city transfer no order is required to be passed, cannot be accepted in view of the settled position of law in KashiramAggarwalla [1965] 56 ITR 14 (SC) and in S.L. Singhania [1992] 193 ITR 275 (Delhi) wherein the validity of the orders were under challenge, meaning thereby an order recording transfer has to be on the records. The judgment in Subhas Chandra Bhaniramka [2010] 320 ITR 349 (Cal) where it has been held that in case of transfer of file under section 158BD resort has to be made to section 127 also applies in the instant case. The judgment in M. A. E. K. K. Varma [1981] 129 ITR 31 (AP) relied on by the Revenue is not applicable as it dealt with the question whether in case of intra city transfer notice is required to be served and whether separate orders of transfer are required under the Wealth-tax Act, 1957 and the Gift-tax Act, 1958. Therefore, since it has been held in this judgment that it is imperative on part of the respondents to issue order under section 127(3), the letters/notices under challenge are set aside and quashed. The writ petition is allowed. Consequential proceedings are also set aside and quashed. Accordingly, the notice dated 6th January, 2010 regarding
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 30.07.2025.