JCIT (OSD)-(Central)-1 Vs Shakshi Township Pvt. Ltd. (ITAT Indore)
ITAT Indore held that the order under section 127 of the Income Tax Act made out by authorities, without serving notice upon assessee, would be invalid and inoperative. Accordingly, action undertaken by AO u/s. 147/148 will also be illegal.
Facts- For AY 2011-12, the assessee filed original return u/s 139 on 19.01.2013 declaring total income of Rs. Nil which was assessed u/s 143(1). Subsequently, the case of assessee was reopened u/s 147 through notice dated 28.03.2018 u/s 148. Accordingly, the AO made a total addition of Rs. 4,97,62,500/- u/s 68 consisting of (i) unexplained share capital – Rs. 20,00,000/- and (ii) unexplained loans – Rs. 4,77,62,500/- and passed reassessment-order determining total income at Rs. 4,97,62,500/-. CIT(A) partly allowed the appeal of the assessee. Being aggrieved, revenue has filed the present appeal and assessee has filed captioned cross objection.
Conclusion- Held that it is a case where the jurisdiction has been changed from Gwalior to Bhopal u/s 127 without complying the condition prescribed in section 127(1) which provides that the transfer in jurisdiction shall be made only after giving the assessee an opportunity of being heard in the matter.
Held that the order u/s 127 made out by authorities, without serving notice upon assessee, would be invalid and inoperative. Therefore, the order passed by PCIT, Gwalior u/s 127 dated 15.09.2016 transferring jurisdiction of assessee from ITO, Ward-1(1), Gwalior to AO [DCIT, Central-I, Bhopal] is bad and consequently the entire assessment-proceeding done by AO, are also invalid and cannot be sustained. Being so, we accept that the second issue of Ground raised by assessee that the DCIT-Central-I, Bhopal [“AO”] had no jurisdiction u/s 127 against assessee.
