ITAT Quashes Assessment Order as ACIT Lacked Jurisdiction Without Transfer Order under Section 127 :

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has quashed an assessment order passed against Pioneer Town Planners Pvt. Ltd., holding that the officer lacked jurisdiction in the absence of a valid transfer order under Section 127 of the Income Tax Act, 1961.

The case arose after the Income Tax Department initiated reassessment proceedings against the assessee for the Assessment Year (AY) 2011-12 by issuing notices under Section 148 of the Act on March 26 and 27, 2018, through the ITO, Ward 19(4), Delhi, and ACIT, Circle 19(2), Delhi, respectively. The reasons for reopening the assessment were recorded by the ITO, Ward 19(4), who also obtained approval under Section 151. Subsequently, the ITO issued a notice under Section 143(2) and disposed of the assessee's objections to the reassessment proceedings.

The assessee submitted that its case was transferred to ACIT, Circle 19(2), on October 25, 2018, without any transfer order under Section 127. Despite this, the ACIT passed the assessment order under Sections 147/143(3) on December 30, 2018. The assessee challenged the validity of the assessment, arguing that the ACIT lacked jurisdiction. The Revenue contended that no order under Section 127 was necessary because the ITO and ACIT had concurrent jurisdiction.

After considering the arguments, the Tribunal observed that "the competent authority, specified under section 127(1) of the Act, as referred above, after giving the assesse a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him, which has not been done in the instant case."

"Since no order u/s. 127 of the Act has been passed for transferring the case from one Assessing Officer to another Assessing Officer, thus, in the absence of order u/s. 127 of the Act, the ACIT 19(2), Delhi had no jurisdiction to pass the assessment order, accordingly, the assessment order passed is not sustainable in the eyes of law and thus without jurisdiction."

Accordingly, the Tribunal held that the ACIT had no jurisdiction to complete the assessment. Accordingly, it quashed the assessment order as legally unsustainable and allowed the assessee's appeal.