Kunshan Q Tech Microelectronics (India) Pvt. Ltd. Vs DCIT (ITAT Delhi)
ITAT Delhi Quashes High-Pitched TP Assessment; Invalid Section 127 Transfer by Non-Jurisdictional PCIT Vitiates Entire Proceedings
The Delhi Bench of the ITAT quashed the entire assessment for AY 2021-22 framed u/s 143(3) r.w.s. 144C(13) in the case of Kunshan Q Tech Microelectronics (India) Pvt. Ltd., holding that the very assumption of jurisdiction was void ab initio. The Tribunal admitted and allowed an additional legal ground challenging the validity of the order u/s 127 dated 27.05.2022, by which the case was transferred to the Central Circle.
The ITAT held that the PCIT-10, Delhi, who passed the transfer order u/s 127, was not the jurisdictional authority over the assessee, a corporate assessee, as per sections 120 and 124 and the applicable jurisdictional notifications. Since the PCIT lacked inherent jurisdiction, the order u/s 127 itself was a nullity, and applying the doctrine of sublato fundamento cadit opus (once the foundation fails, the superstructure collapses), all subsequent proceedings—including DRP directions and the final assessment order—were rendered non-est.
The Tribunal rejected the Revenue’s objections that (i) section 127 orders are merely administrative, (ii) the assessee was barred by section 124(3), and (iii) jurisdiction could be inferred from PAN history or past addresses. It reaffirmed the settled distinction between inherent lack of jurisdiction and irregular exercise of jurisdiction, holding that section 124(3) does not cure inherent jurisdictional defects. As the assessment was void on jurisdiction alone, the Tribunal did not adjudicate the massive TP and other additions (₹4,400+ crore), and quashed the assessment in entirety.
Appellant was represented by Sh. Pavan Ved, Advocate and Sh. Mohit Gupta, CA
FULL TEXT OF THE ORDER OF ITAT DELHI
