BHAN BAI, BHILAI,DURG V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1), BHILAI, DURG

ITA 192/RPR/2024

AI Insights

The case involves an appeal by Bhan Bai against the order of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center, Delhi, which arose from an assessment order passed by the ACIT-1(1), Bhilai under sections 144/147 of the Income-tax Act, 1961 for the assessment year 2011-12. The primary contention was the lack of a valid jurisdictional transfer order under section 127 of the Act, which was necessary for the ACIT-1(1), Bhilai to legally assume jurisdiction over the case. The Tribunal examined the procedural validity of the jurisdictional transfer and found it lacking, leading to the quashing of the assessment order.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35800 (ITAT-RAIPUR)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-11-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 03-05-2024
• Other Referred Cases: Sarita Jain Vs. ITO, Ward-4(1), Raipur, Roop Das Vs. ITO, Ward-2(1), Bhilai, D. Craft Entertainment P. Ltd. Vs. ITO, Kusum Goyal Vs. ITO and Ors., Ajanta Industries Vs. Central Board of Direct Tax, Chuharmal Vs. CIT, Smt. Srilekha Banerjee and Others Vs. CIT, Bihar and Orissa, Manindra Nath Das Vs. CIT, BIHAR and Orissa, Subhas Chandra Bhaniramka Vs. ITO, M.A.E.K.K. Verma Vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: YOGESH SETHIA
• Keywords: Set aside; Opportunity of being heard; Unexplained investment; Gift; Principle of natural justice; Assessment record; Competent authority; Deemed to accrue or arise in india
• Section: 148; 144; 143(3); 142(1); 143(2); 250; 69A; 158BD

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No.192/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2011-12 Bhan Bai H. No.257, Risali, Newai Mill Para, Bhilai-490 006 (C.G.) PAN: AYRPB7895B .......अपीलाथȸ / Appellant बनाम / V/s. The Assistant Commissioner of Income Tax Circle-1(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Yogesh Sethia, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 28.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 03.12.2024 2 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 22.03.2024, which in turn arises from the order passed by the A.O under Sec.144/147 of the Income- tax Act, 1961 (in short ‘the Act’) dated 26.11.2018 for the assessment year 2011-12. The assessee has assailed the impugned order on the following grounds of appeal: “1) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in confirming action of Ld. Assessing Officer initiating proceedings u/s.147 r.w.s. 148, 149, 151 and 151A of the Income-tax Act, 1961 without fulfilling stipulated conditions. 2) In the facts and circumstances of the case and in law, the assessment order is bad in law, illegal and without jurisdiction for the assessment order was passed by ACIT-1(1), Bhilai on the basis of jurisdictional notice issued u/s.148 of the Income-tax Act, 1961 by Income-tax Officer-1(1), Bhilai who transferred the case without passing of order u/s.127 of the Income-tax Act, 1961. 3) In the facts and circumstances of the case and in law, the Ld. Assessing Officer has erred initiating reassessment proceeding u/s.147 of the Income-tax Act, 1961 without fulfilling all necessary conditions. Accordingly, the said proceedings as well as the assessment order are illegal, bad in law and without jurisdiction. 4) The ld. Assessing officer has erred in making addition of Rs.12,10,200/-representing sale proceeds of immovable property sold by her spouse as unexplained investment u/s. 69A of the Income-tax Act, 1961. 5) The impugned order is bad in law and on facts. 3 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 6) The appellant reserves the right to addition, after or omit all or any of the grounds of appeal in the interest of justice.” 2. Succinctly stated, the A.O based on information that the assessee had during the year under consideration had made cash deposits of Rs.21,10,200/- in her savings bank account held with Durg Rajnandgaon Gramin Bank, but had not filed her return of income, initiated proceedings u/s. 147 of the Act. As the assessee had failed to comply with the notices that were issued by the A.O u/s. 142(1) of the Act, therefore, the latter was constrained to proceed with and frame the assessment on an ex-parte basis. Accordingly, the A.O vide his order passed u/ss. 144/147 of the Act, 26.11.2018 determined the income of the assessee at Rs.21,10,200/-. 3. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the observation of the CIT(Appeals) are culled out as under: “IV. FINDINGS DURING APPEAL PROCEEDINGS During the course of appeal proceedings voluminous material was produced to support the contention of the taxpayer. Unfortunately most of the material evidences did not through light on the investments made by her but all land was sold by some body else, all purchases were in the name of some body else-the taxpayer is neither the buyer nor the seller. Cash is deposited into the account of the taxpayer. The seller is Dori Lal, son of Jhumuklal Gautam. Details of cash deposited are given here in a TABLE. 4 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 4.1 Apart from this copy of bank account statement of RAJNANDGAON GRAMIN BANK is also submitted. This bank account shows credit of Rs 300000. Rs 900000 and Rs 400000. Out of this Rs 300000 goes as SDR (1760) and Rs 400000 also goes as SDR (1868). The only amount which can be given credit is Rs 900000 which is shown as cash deposited by self i.e Bhan 5 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 Bai. The remaining amount of Rs 1210200 is rightfully brought to tax. The addition on account of unexplained investment u/s 69A at Rs 1210200 is upheld. 4.2 In the present case, assessee deposited cash in its bank accounts, various credit entries appearing in the bank accounts but such credits are not recorded in the books of accounts. Further the nature and source of such deposits made in the bank accounts were not at all explained, leave alone satisfactory explanation. Further for invoking deeming provisions u/s 69A, there should be clearly identifiable asset or unexplained money. It is amply proved beyond doubt that the assessee has deposited cash and other credits appearing in bank accounts stands unexplained and the sum of Rs 1210200 are identifiable unexplained assets. All three limbs of section 69A stands qualified in the case of the assessee- • Assessee was found to be the owner of the money; • Such money was not recorded in the books of accounts; and • The nature and source is not identifiable. 4.3 When the assessee has failed to prove that in his normal business or otherwise, he was possessed of so much cash, it is to be held that the money by virtue of cash deposits represents the earning of the assessee during the year from undisclosed sources within the meaning of Section 69A of the Act. Section 69A of the Act deals with money, etc. owned by the assessee and found in possession including in the bank accounts of the assessee which remained unexplained. The relevant portion of the same is reproduced herein under: \"Section 69A - Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of accounts, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Income- tax Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.\" 4.4 In the instant case, the assessee was having huge, cash deposits in his bank accounts which remained unexplained. The assessee is found to be the owner of the money appearing in the bank account but has failed to offer any acceptable and cogent 6 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 explanation regarding the source of such huge cash deposits appearing in the bank accounts. The scheme of Section 69A of the Act would show that in cases where the nature and source of acquisition of money, etc. owned by the assessee is not explained at all, or not satisfactorily explained, then the value of such money is deemed to be the income of the assessee. This provision of the Act treats unexplained money as deemed income where the nature and source of acquisition of cash deposits in the banks remains unexplained or not satisfactorily explained. No doubt, the assessee has deposited htig;'cash in his bank accounts but the nature and source of such cash deposits were not at all explained. Hence, the limbs of Section 69A of the Act stands qualified in the case of the assessee i.e., the assessee was found to be owner of the money and source remained unidentifiable. Reliance is placed on the decisions of the Hon'ble Supreme Court dated 27-03-1963 in the case of Smt. Srilekha Banerjee and Others reported in 1964 AIR 697 (SC) wherein it was held that, the source of money not having been satisfactorily proved, the Revenue was justified in holding the same as assessable income of the assessee from undisclosed sources. Reliance is also placed on the decision of the Hon'ble Apex Court in the case of Chuharmal Vs. CIT (1988) reported in 172 ITR 250 in which similar issue was adjudicated in favour of the Revenue. • While affirming the view of MP HC held that the expression 'income' as used in section 69A, has a wide meaning which meant anything which came in resulted G2 in gain and on this basis concluded that assessee has income which he had invested in purchasing article and he could be held to be the owner and the value could be deemed to be his income by virtue of section 69A.\" • The hon SC in the case of Srilekha Banerjee and others vs CIT, Bihar and Orissa reported in 1964 AIR 697, dt 27/3/1963 held that the source of money has not been satisfactorily proved, the dept was justified in holding it to be assessable income of the assessee from some undisclosed source. • \"the fact of the case was that assessee had encashed 51 high denomination notes of Rs 1000 each in January. Assessee's explanation in his application for encashment of notes was that he was a colliery proprietor and contractor, that for conducting the business and for payment to labour which came to about Rs 30000 every week to Rs 40000 every week he had to keep large sums of money to meet emergency and that sum of Rs 50000 realised by encashment of the notes was neither profit nor part of profit but was floating capital for the purpose of conducting business. the ITO did not accept this explanation and treated 7 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 this amount as profit from some undisclosed source and assessed it as assessable income. In Manindra Nath Das vs CIT, BIHAR and Orissa the taxpayer had encashed Notes of the value of Rs 28600, which he contended were his accumulated savings. His explanation was accepted in respect of Rs 15000, because 15 notes could be traced to a bank, but was rejected in respect of balance. The PATNA HC pointed out that if an assessee received an amount in the year of account, it was for him to show that the amount so received did not bear the character of income, and the taxpayer in the case had failed to prove this fact in respect of the remaining notes. • In view of the detailed discussions, it is held that the cash deposits of Rs 1210200 made during the financial year remained unexplained. The assessee has not responded to the notice issued u/s 142(1) of the Act and also to the showcause issued during the proceeding which was properly served on the registered email ID. As the assessee failed to offer any explanation about the nature and source of cash deposits appearing in the banks, the sum of Rs 1210200 is deemed as unexplained money within the meaning of Section 69A of the Act and is assessed as such. The addition so made is taxed u/s 115BBE of the Act at the specified rate. • Since the taxable income of the assessee is determined after making an addition referring to the income in section 69A of the Act, penalty proceeding u/s 271AAC of the Act was initiated separately. Addition upheld : Rs.12,10,200/- 4.5. In the result appeal is dismissed.” 4. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 5. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 8 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 6. Shri Yogesh Sethia, Ld. Authorized Representative ( for short ‘AR’) for the assessee at the threshold submitted that the A.O had grossly erred in law and facts of the case in assuming jurisdiction and framing the impugned assessment vide his order passed u/s. 144 r.w.s. 147 of the Act, dated 26.11.2018. Elaborating on his contention, the Ld. AR submitted that though the notice u/s. 148 of the Act dated 31.01.2018 was issued by the ITO-1(1), Bhilai but in absence of any order of transfer u/s.127 of the Act, the assessment was framed by the ACIT-1(1), Bhilai u/s. 144 r.w.s. 147 of the Act, dated 26.11.2018. The Ld. AR submitted that as the ACIT- 1(1), Bhilai had assumed jurisdiction in absence of any order of transfer u/s. 127 of the Act, therefore, the assessment so framed by her cannot be sustained and is liable to be struck down. The Ld. AR in support of his aforesaid contention had pressed into service the order of the ITAT, Raipur, “SMC” Bench in the case of Sarita Jain Vs. ITO, Ward-4(1), Raipur, ITA No.260/RPR/2023, dated 24.06.2024. 7. Per contra, Dr. Priyanka Patel, Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. The Ld. DR submitted that as the assessment in the present case had been framed by the ACIT-1(1), Bhilai, i.e. an officer who was vested with a concurrent jurisdiction, therefore, no infirmity emerges from the order that was passed by her based on the notice issued u/s. 148 of the Act, dated 31.01.2018 by the ITO-1(1), Bhilai. 9 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 8. As the Ld.AR has assailed the validity of the jurisdiction that was assumed by the A.O for framing of the assessment on the ground that there was no order of transfer u/s. 127 of the Act transferring the case of the assessee from ITO-1(1), Bhilai i.e. the officer who had issued notice u/s. 148 of the Act dated 31.01.2018 to ACIT-1(1), Bhilai i.e. the officer who had framed the assessment, therefore, the Ld. Sr. DR was directed to produce the assessment records and obtain a report from the A.O. 9. On 28.11.2024, the Ld. Sr. DR had placed on record a report dated 28.11.2024 that was received (through email) by her office from ITO-1(3), Bhilai, which reads as under: 10 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 On a perusal of the aforesaid report, I find that the A.O had categorically admitted that no order u/s. 127 of the Act is found available on record. Also, nothing had been placed on record by the Ld. DR to dislodge the factual position so canvassed by the A.O vide his aforesaid report. 10. I have thoughtfully considered the facts involved in the present case in the backdrop of the contentions advanced by the Ld. Authorized Representatives of both the parties. Admittedly, it is a matter of fact borne from the report filed by the A.O., i.e. ITO-1(3), Bhilai dated 27.11.2024 (copy placed on record), that no order of transfer u/s. 127 of the Act transferring the case of the assessee from ITO-1(1), Bhilai to ACIT-1(1), Bhilai is found available on record. I find that the issue involved in the present appeal i.e. as to whether or not the assessment order passed by the A.O de-hors any order of transfer u/s. 127 of the Act had been looked into by the ITAT, Raipur, “SMC” Bench in the case of Sarita Jain Vs. ITO, Ward-4(1), Raipur, ITA No.260/RPR/2023, dated 24.06.2024, wherein after relying on a plethora of judicial pronouncements, it was held as under: “13. I have thoughtfully considered the contentions of the Ld. Authorized Representatives of both the parties in the backdrop of the material available on record. Before proceeding any further, I deem it fit to cull out the provisions of Section 127 of the Act, which reads as under: \"127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, after giving the assessee a 11 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 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. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,— (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred.\" (emphasis supplied by me) 14. Admittedly, it is a matter of fact borne from the record that though the Notice u/s 143(2), dated 29.07.2016, Page 1 of APB was issued by the ITO- 2(1), Raipur but thereafter the assessment had been framed vide order passed u/s.143(3) of the Act dated 27.12.2017 by the ITO-$(2), Raipur. The Ld. AR had placed on record a Notification No.1/2014-15 dated 15.11.2014, 12 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 as per which, the JCIT, Range-2, Bhilai in exercise of the powers conferred upon him under sub-section (1), (2) and (3) of Section 120 of the Act by Pr. Commissioner/Commissioner of Income Tax-2, Raipur, had directed the A.O’s to exercise and perform functions under the Income Tax Act, 1961/Wealth Tax Act, 1957 in respect of respective cases or classes of persons in the territorial areas specified in the notification. Nothing has been brought on record by the Ld. DR which would reveal that any notification vesting jurisdiction over the case of the assessee with the ITO-4(2), Raipur was issued after the notice u/s.143(2), dated 29.07.2016 was issued by the ITO-2(1), Raipur. 15. Apropos the claim raised by the A.O, i.e. ITO-4(1), Raipur in his letter dated 10.05.2024 (supra) that as the jurisdiction over the assessee’s case remained within the same range, therefore, there was no requirement for the Pr. CIT to pass any order of transfer u/s. 127 of the Act, the same is found to be both factually and principally wrong. The case of the assessee had been transferred from ITO-2(1), Raipur to ITO-4(2), Raipur, i.e. from Range 2 to Range 4. Be that as it may, as per the mandate of Section 127 of the Act transfer of any case from one A.O. to any other A.O. would mandatorily require recording of reasons for doing so on the part of the concerned authority, viz. Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. It is further provided in sub-section (1) of Section 127 of the Act that wherever it is possible to do so the appropriate authority shall afford a reasonable opportunity of being heard in the matter to the assessee. Although sub-section (3) of Section 127 of the Act dispenses with the requirement of affording a reasonable opportunity of being beard to the assessee in a case where the transfer of the case is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place, but it does not dispenses with the statutory requirement of recording of the reasons for doing so by the concerned authority. As such, in the case before me, where jurisdiction over the case of the assessee had been transferred to ITO-4(2), Raipur from ITO-2(1), Raipur, i.e. within the same city, though no requirement of affording a reasonable opportunity of being heard to the assessee was required, but the pre- condition contemplated under sub-section (1) of Section 127 of the Act, i.e., recording of reasons for doing so by the appropriate authority could not have been done away with. 16. My aforesaid view that as per the mandate of law, a transfer order is statutorily required to be passed by the prescribed authority u/s.127 of the Act, and an A.O cannot on his own transfer an income tax file to another officer in the absence of the aforesaid order is squarely covered by the judgment of the Hon'ble High Court of Calcutta in the case of Kusum Goyal Vs. ITO and Ors. (2010) 329 ITR 283 (Cal). For the sake of clarity, the observations of the Hon'ble High Court are culled out as under: 13 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 \"The question which falls for consideration is whether under section 127 of the Act an Assessing Officer on his own can transfer an income tax file to another officer and whether an order is required to be passed. In order to appreciate the issue it is necessary to refer to the relevant provisions in section 127 of the Act which is as under : “127.(1) The Director General or Chief Commissioner or Commissioner may, after giving the assessee 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. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner - (a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) Where the Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place.” (Emphasis supplied ) From a reading of the language of section 127(3) it is evident that when a file is transferred from one assessing officer to another whose offices are located in the same city, locality or place, though other statutory formalities are required to be 14 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 complied with, the opportunity of hearing as postulated in section 127 (1) and (2) in case of inter city transfer, is not required. Now keeping the position of law in mind let the letter/notice dated 21st October, 2009 issued by the respondent no.2 be examined. In order to appreciate the issue it is necessary to refer to the relevant portion of the impugned intimation issued by the respondent no.2 which is as under: “Since your income has exceeded minimum threshold limit of Rs.10 lac for the assessment year 2007-2008, the jurisdiction to/of your case automatically gets vested with the Jurisdictional DCIT-Circle-54, Kolkata as per above Directives. You are kindly informed hereby that no order u/s 127 of the Income Tax Act 1961 by the Ld. Commissioner of Income Tax – XIX, WB is required to be passed for getting the assessment records transferred from ITO Ward- 54(2), Kolkata to DCIT Circle-54, Kolkata by virtue of the provisions of sub-section 3 of section 127 of the Income Tax Act, 1961. For your ready reference the provisions of the said section is appended below. Section 127 sub-section (3) of the Income Tax Act, 1961 states/reads as: …… From the foregoing provisions it is clear that the Commissioner of Income Tax is not required to pass any order transferring the case from/to any Assessing Officer(s) if “the offices of all such officers are situated in the same city, locality or place.” (Emphasis supplied). It is evident that the 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 21st October, 2009 is patently illegal since it has been held in this judgement 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 2007-2008, 2008-2009 and the earlier years as intimated in the letter/notice dated 30th July, 2009 issued by the 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 Kashiram Aggarwalla (supra) and in S.L.Singhania (supra) wherein the validity of the orders were under challenge, meaning thereby an order recording transfer has to be on the records. The judgement in Subhas 15 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 Chandra Bhaniramka (supra) 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 judgement in M.A.E.K.K. Verma (supra) 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 Wealth Tax Act, 1957 and Gift Tax Act, 1956. Therefore, since it has been held in this judgement 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 the penalty proceedings under section 271(1)(c) for the assessment year 2006-07 is also set aside and quashed. The application being G.A.No. 81 of 2010 is also allowed. No order as to costs\" (emphasis supplied by me) 17. Also, a similar issue had been dealt with by the ITAT, Raipur in the case of Roop Das Vs. ITO, Ward-2(1), Bhilai, ITA Nos.310 & 311/RPR/2023 dated 09.04.2024 wherein, the Tribunal after relying on the judgments of the Hon'ble Supreme Court in the case of Ajanta Industries Vs. Central Board of Direct Tax supra) and that of the Hon'ble High Court of Calcutta in the case of Kusum Goyal Vs. ITO & Ors. (supra) had decided the issue in favor of the assessee, observing that a transfer order is statutorily required to be passed by the prescribed authority u/s.127 of the Act, and an A.O cannot on his own transfer an income tax file to another officer in absence of the aforesaid order u/s.127 of the Act. For the sake of clarity, the observations of the Tribunal are culled out as under: \"11. Apropos the claim raised by the A.O, i.e. ITO-2(1), Bhilai in her letter dated 14.03.2024 (supra) that as the jurisdiction over the assessee’s case remained within the same range, therefore, there was no requirement for the Pr. CIT to pass any order of transfer u/s. 127 of the Act, the same is found to be both factually and principally wrong. The case of the assessee had been transferred from ITO-1(4), Bhilai to ITO-2(1), Bhilai, i.e from Range 1 to Range 2. Be that as it may, as per the mandate of Section 127 of the Act transfer of any case from one A.O to any other A.O would mandatorily require recording of reasons for doing so on the part of the concerned authority, viz. Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. It is further provided in sub-section (1) of Section 127 of the Act that wherever it is possible to do so the appropriate authority shall afford a reasonable opportunity of being heard in the matter 16 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 to the assessee. Although sub-section (3) of Section 127 of the Act dispenses with the requirement of affording a reasonable opportunity of being beard to the assessee in a case where the transfer of case is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place, but it does not dispenses with the statutory requirement of recording of the reasons for doing so by the concerned authority. As such, in the case before me, where jurisdiction over the case of the assessee had been transferred to ITO-2(1), Bhilai from ITO-1(4), Bhilai, i.e. within the same city, though no requirement of affording a reasonable opportunity of being heard to the assessee was required, but the pre-condition contemplated under sub section (1) of Section 127 of the Act, i.e., recording of reasons for doing so by the appropriate authority could not have been done away with. 12. My aforesaid view that the requirement of recording reasons u/s.127(1) of the Act for transferring of a case from one A.O to another is mandatorily required, is supported by the judgment of the Hon'ble Supreme Court in the case of Ajanta Industries Vs. Central Board of Direct Tax (1976) 102 ITR 281 (SC). It was, inter alia, observed by the Hon'ble Apex Court that requirement of recording reasons u/s. 127(1) of the Act is a mandatory direction under the law and non-communication thereof is not saved by showing that the reasons exist in the files although not communicated to the assessee. It was further observed that recording of reasons and disclosure thereof is not a mere idle formality. The Hon'ble Apex Court observed that now when law requires reasons to be recorded in a particular order affecting prejudicially the interests of any person, who can challenge the order in court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated. For the sake of clarity, the relevant observations of the Hon'ble Apex Court are culled out as under: \"We are clearly of opinion that the requirement of recording reasons under section 127(1) is a mandatory direction under the law and non-communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee.\" (emphasis supplied by me) 13. Also, my aforesaid view that as per the mandate of law, a transfer order is statutorily required to be passed by the prescribed authority u/s. 127 of the Act, and an A.O cannot on his own transfer an income tax file to another officer in absence of the aforesaid order is squarely covered by the 17 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 judgment of the Hon'ble High Court of Calcutta in the case of Kusum Goyal Vs. ITO and Ors, (2010) 329 ITR 283 (Cal.). For the sake of clarity, the relevant observations of the Hon'ble High Court are culled out as under: \"The question which falls for consideration is whether under section 127 of the Act an Assessing Officer on his own can transfer an income tax file to another officer and whether an order is required to be passed. In order to appreciate the issue it is necessary to refer to the relevant provisions in section 127 of the Act which is as under : “127.(1) The Director General or Chief Commissioner or Commissioner may, after giving the assessee 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. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner - (a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) Where the Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place.” (Emphasis supplied ) 18 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 From a reading of the language of section 127(3) it is evident that when a file is transferred from one assessing officer to another whose offices are located in the same city, locality or place, though other statutory formalities are required to be complied with, the opportunity of hearing as postulated in section 127 (1) and (2) in case of inter city transfer, is not required. Now keeping the position of law in mind let the letter/notice dated 21st October, 2009 issued by the respondent no.2 be examined. In order to appreciate the issue it is necessary to refer to the relevant portion of the impugned intimation issued by the respondent no.2 which is as under: “Since your income has exceeded minimum threshold limit of Rs.10 lac for the assessment year 2007-2008, the jurisdiction to/of your case automatically gets vested with the Jurisdictional DCIT-Circle-54, Kolkata as per above Directives. You are kindly informed hereby that no order u/s 127 of the Income Tax Act 1961 by the Ld. Commissioner of Income Tax – XIX, WB is required to be passed for getting the assessment records transferred from ITO Ward- 54(2), Kolkata to DCIT Circle-54, Kolkata by virtue of the provisions of sub-section 3 of section 127 of the Income Tax Act, 1961. For your ready reference the provisions of the said section is appended below. Section 127 sub-section (3) of the Income Tax Act, 1961 states/reads as: …… From the foregoing provisions it is clear that the Commissioner of Income Tax is not required to pass any order transferring the case from/to any Assessing Officer(s) if “the offices of all such officers are situated in the same city, locality or place.” (Emphasis supplied). It is evident that the 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 21st October, 2009 is patently illegal since it has been held in this judgement 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 2007-2008, 2008-2009 and the earlier years as intimated in the letter/notice dated 30th July, 2009 issued by the 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 19 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 be passed, cannot be accepted in view of the settled position of law in Kashiram Aggarwalla (supra) and in S.L.Singhania (supra) wherein the validity of the orders were under challenge, meaning thereby an order recording transfer has to be on the records. The judgement in Subhas Chandra Bhaniramka (supra) 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 judgement in M.A.E.K.K. Verma (supra) 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 Wealth Tax Act, 1957 and Gift Tax Act, 1956. Therefore, since it has been held in this judgement 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 the penalty proceedings under section 271(1)(c) for the assessment year 2006-07 is also set aside and quashed. The application being G.A.No. 81 of 2010 is also allowed. No order as to costs\" (emphasis supplied by me) 14. As in the case before me no order of transfer u/s. 127(1) of the Act had been shown to have been passed, and in fact, the case of the assessee had been transferred simplicitor on the basis of a letter dated 11.04.2018 addressed by ITO-1(4), Bhilai to ITO-2(1), Bhilai; therefore, it is a clear case of invalid assumption of jurisdiction on the part of the ITO-2(1), Bhilai who in absence of any valid assumption of jurisdiction had framed the assessment vide his order u/s.147 r.w.s. 144 of the Act, dated 30.11.2018. I, thus, in terms of my aforesaid observations quash the assessment framed by the ITO-2(1), Bhilai u/s.147 r.w.s. 144 of the Act dated 30.11.2018 for want of valid assumption of jurisdiction on his part. 15. As I have quashed the assessment framed by the A.O u/s. 147 r.w.s. 144 of the Act dated 30.11.2018 for want of valid assumption of jurisdiction, therefore, I refrain from adverting to and dealing with the grounds of appeal raised by the assessee, based on which, the additions made by the A.O has been assailed before me, which, thus, are left open.\" 18. Also, I find that ITAT, Kolkata in the case of D. Craft Entertainment P. Ltd. Vs. ITO, ITA No.1461/Kol/2017 dated 12.10.2018 after relying on the judgment of the Hon'ble High Court of Calcutta in the case of Kusum Goyal Vs. ITO & Ors (supra) had adjudicated the aforesaid issue in favor of the assessee. For the sake of clarity, the observations of the Tribunal are culled out as under: 20 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 \"6. We find that no notice u/s.143(2) was issued by ITO, Wd-6(1), Kolkata before completing the assessment. We note that ITO, Wd-34(2), Kolkata did not enjoy the jurisdiction over the assessee company by virtue of both the earlier Notification No.228/2001 dated 31.07.2001(CBDT) as well as the latest Notification No.50/2014 dated 22.10.2014 of CBDT as discussed above. Therefore, the assessment completed by ITO, Wd- 6(1), Kolkata on the strength of the notice issued u/s. 143(2) of the Act by ITO, Wd- 34(2), Kolkata (who did not enjoy jurisdiction) is non-est in law and, therefore, is bad in law and consequently null in the eyes of law. Moreover, we also take note that Pr. CIT/CIT-12, Kolkata under whom ITO, Ward- 34(2), Kolkata functioned has not issued any order of transfer of the jurisdiction as contemplated u/s. 127 of the Act to ITO, Wd-6(1), Kolkata. The Hon'ble jurisdictional High Court in Kusum Goyal (2010) 329 ITR 283 (Cal) has clearly spelt out that the ITO on its own cannot transfer the jurisdiction without order from the competent authority. In this case, we note that there is no mention in the assessment order of any transfer order passed by the concerned CIT-12, therefore, the contention of the ITO, Ward-6(1), Kolkata that the jurisdiction has been transferred from ITO, Wd- 34(2) to ITO, Wd-6(1), Kolkata is also without authority and vitiates the transfer of jurisdiction as claimed by the AO in the assessment order and thus this fact also vitiates the assessment order. In the light of the above as well as the contention of the assessee that no opportunity of hearing was rendered to it by ITO, Wd-6(1), Kolkata before framing assessment u/s. 144 of the Act which omission on the part of AO also is against principles of natural justice and the impugned assessment u/s 144 of the Act is fragile for non-adherence of principles of natural justice on the part of AO. Therefore, looking from any angle as discussed above and especially taking note that the impugned assessment order passed by the ITO, Wd-6(1), Kolkata without issuing notice u/s. 143(2) of the Act is corum non-judice and therefore null in the eyes of law and, therefore, need to be quashed and we quash the impugned assessment order dated 13.03.2015 passed by ITO, Wd-6(1), Kolkata. The additional grounds raised by the assessee are allowed.\" 19. As in the case before me no order of transfer u/s.127(1) of the Act had been shown to have been passed, therefore, it is a clear case of invalid assumption of jurisdiction by the ITO-4(2), Raipur who in absence of any valid assumption of jurisdiction had framed the assessment vide his order u/s.143(3) of the Act, dated 27.12.2017. As the facts and issues involved in the present appeal remain the same as were involved in the aforesaid cases, therefore, following the same parity of reasoning, I quash the assessment framed by the ITO-4(2), Raipur u/s.143(3) of the Act dated 27.12.2017 for want of valid assumption of jurisdiction on his part. 20. As I have quashed the assessment framed by the A.O, i.e ITO-4(2), Raipur u/s. 143(3) of the Act dated 27.12.2017 for want of valid assumption of jurisdiction, therefore, I refrain from adverting to and dealing with the 21 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 grounds of appeal raised by the assessee, based on which, the additions made by the A.O have been assailed before me, which, thus, are left open. 21. In the result, appeal of the assessee is allowed in terms of the aforesaid observations.” As the facts involved in the present case on the first principle remains the same as were there in the aforesaid case i.e. Sarita Jain Vs. ITO, Ward- 4(1), Raipur (supra), therefore, I follow the same. Thus, the Ground of appeal No.2 raised by the assessee is allowed in terms of the aforesaid observations. 11. Grounds of appeal Nos. 5 & 6 being general in nature are dismissed as not pressed. 12. As I have quashed the assessment framed by the A.O, i.e ACIT-1(1), Bhilai u/ss.144/147 of the Act, dated 26.11.2018 for want of valid assumption of jurisdiction, therefore, I refrain from adverting to and dealing with the grounds of appeal raised by the assessee, based on which, the additions made by the A.O have been assailed before me, which, thus, are left open. Thus, the Grounds of appeal Nos. 1, 3 & 4 are disposed off in terms of the aforesaid observations. 22 Bhan Bai Vs. ACIT, Circle-1(1), Raipur ITA No.192 /RPR/2024 13. In the result, appeal of the assessee is allowed in terms of the aforesaid observations. Order pronounced in open court on 03rd day of December, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 03rd December, 2024. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "