Glen Appliances Private Limited Vs ACIT (ITAT Delhi)
The ITAT Delhi quashed the assessment proceedings after holding that the transfer of jurisdiction under Section 127(2) was invalid because the Principal Commissioner of Income Tax transferred the case from Faridabad to Delhi without providing the assessee a reasonable opportunity of being heard, a mandatory requirement under the Act. The Tribunal observed that notices under Section 143(2) were subsequently issued by Delhi-based officers who lacked valid jurisdiction due to the defective transfer order. Further, the transfer order and corrigendum were later cancelled, restoring jurisdiction to the original Assessing Officer at Faridabad. However, the Assessing Officer who ultimately passed the assessment order failed to issue a valid notice under Section 143(2) after jurisdiction was restored. Since issuance of a valid jurisdictional notice is a prerequisite for a lawful assessment, the Tribunal held that the assessment suffered from a fundamental jurisdictional defect. Consequently, the assessment order was declared invalid and quashed without examining the merits of the transfer pricing and other substantive issues.
Core Issue: Whether an assessment framed under section 143(3) read with section 144C is valid when (i) the transfer of jurisdiction from Faridabad to Delhi under section 127 was made without granting the assessee a reasonable opportunity of being heard as mandated by law, (ii) notices under section 143(2) were issued by officers who did not possess valid jurisdiction, and (iii) the Assessing Officer who ultimately completed the assessment did so without issuing a valid notice under section 143(2).
