Muzaffar Nagar Development Authority Vs National Faceless Appeal Centre (NFAC) (ITAT Delhi)
This case revolves around a fundamental jurisdictional defect in the assessment order. Assessee (a development authority) originally had registration u/s 12AA, which was cancelled. However, in 2015, the Delhi ITAT restored its registration & quashed the cancellation. Relying141 on this, the Assessee filed a revised return declaring NIL income, but DCIT (Exemption), Ghaziabad completed assessment u/s 143(3) & made additions.
Before the Tribunal, Assessee challenged the jurisdiction of DCIT (Exemption), Ghaziabad, arguing:
- The original jurisdictional AO was ITO, Ward-2(1), Muzaffarnagar
- The assessment was completed by DCIT (Exemption), Ghaziabad
- No order u/s 127 (transfer of jurisdiction) was ever issued or produced
- Therefore, DCIT (Exemption) had no legal authority to pass the assessment order
The Tribunal examined the assessment order & noted that:
- AO claimed to have issued notice u/s 143(2) on 31.08.2015
- But there is no mention of any 127 transfer order
- Even after being specifically asked, the Revenue could not produce any 127 order
- No notice u/s 143(2) was issued by DCIT (Exemption) (the officer who passed the order)
Tribunal relied on multiple binding judgments including:
- Kashiram Aggarwalla (SC)
- L. Singhania (Delhi HC)
- Kusum Goyal (Cal HC)
- Lalitkumar Bardia (Bom HC)
- Ghagyarna Gems (ITAT Raipur, 2025)
All these rulings hold that without a valid order u/s 127, jurisdiction cannot be transferred, & any assessment passed without jurisdiction is void. Section 127 cannot retrospectively validate an otherwise illegal assessment.
