ITAT Raipur: Reassessment Set Aside – Jurisdiction Failed Due to Missing Section 127 Transfer Order

By CA Sandeep Kanoi Income Tax Judiciary August 12, 2026

Case Name: Manmohan Das Kurre Vs ITO (ITAT Raipur)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2011-12
Courts: All ITAT, ITAT Raipur

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Manmohan Das Kurre Vs ITO (ITAT Raipur)

The ITAT Raipur allowed the assessee’s appeal against the order of the CIT(A)/Addl./JCIT(A)-3, Bengaluru dated 13.02.2026 for AY 2011-12. The appeal was delayed by 18 days. The assessee explained that hearing notices and the CIT(A)’s order had been sent to an email address no longer in use, while Form 35 had indicated that he did not opt to receive notices through email. The assessee stated that no physical notice had been received and therefore he was unaware of the order. The Tribunal noted that the Senior Departmental Representative did not object to condonation and, considering the circumstances and cited judicial decisions, condoned the delay.

On merits, the assessee challenged the reassessment on jurisdictional grounds. Notice under Section 148 was issued on 26.03.2018 by ITO-1(4), Raipur, whereas the assessment under Sections 147 read with 143(3) was completed by ITO-1(2), Raipur. The assessee contended that there was no mandatory transfer order under Section 127 authorising transfer of jurisdiction from one Assessing Officer to the other.

The Revenue submitted that both officers were under the erstwhile jurisdiction of the Addl./Joint Commissioner of Income Tax, Range-1, Raipur and therefore no Section 127 order was required. It relied on the fact that Notification No. 1/2014-15 dated 15.11.2014, issued under Section 120, placed both offices within Range-1, Raipur. The Revenue also stated that the case had been transferred from ITO-1(4) to ITO-1(2) on 14.08.2018. According to the assessment report, the case had been reopened after information regarding cash deposits of Rs. 30,30,000, and the assessment ultimately made an addition of Rs. 25,95,000 as unexplained investment under Section 69.

The assessee argued that Section 127 required a formal transfer order by the competent authority even where jurisdiction was transferred between Assessing Officers within the same range. The Tribunal accepted this contention. It observed that Section 127(1) refers to transfer by the competent authority and that the absence of a requirement to provide an opportunity of hearing in specified circumstances did not dispense with the requirement of an order of transfer. The Tribunal held that an Assessing Officer could not suo motu transfer jurisdiction to another Assessing Officer.

The Tribunal relied upon its earlier decision in Smt. Deepti Shrivastav vs. ITO, Ward-1(3), Raipur, where the absence of a Section 127 transfer order, coupled with proceedings being conducted by a different Assessing Officer, had been considered a jurisdictional defect. It also considered Rahul Tyagi Vs. Income Tax Officer, in which the Tribunal dealt with a change of Assessing Officer without a Section 127 order and held the proceedings invalid.

The Tribunal further examined the separate issue that the Assessing Officer who completed the reassessment had not himself issued a notice under Section 148. It relied upon Jagdish Kumar Yadav Vs. ITO-1(1), Bhilai (C.G.), where the Tribunal had held that completion of reassessment by an Assessing Officer who had not issued the Section 148 notice, in the absence of a valid Section 127 transfer order, resulted in lack of jurisdiction. The Tribunal also referred to Virendra Gir Goswami Vs. Income Tax Officer, which addressed a similar situation involving a Section 148 notice issued by one Assessing Officer and assessment completed by another without a Section 127 transfer order.

The Tribunal considered the Supreme Court’s decision in Union of India vs. Rajeev Bansal (2024) 469 ITR 46 (SC). The supplied order records the Supreme Court’s observations that where a statute confers power or imposes a duty on a particular authority, that authority must exercise the power or perform the duty in the prescribed manner. It further records that an exercise of statutory power inconsistent with the statutory prescription is invalid and that an order passed without jurisdiction is a nullity.

The Tribunal also distinguished the Revenue’s reliance on the Chhattisgarh High Court decision in Harish Kumar Chhabbda Vs. Pr. Commissioner of Income Tax. It noted distinctions concerning the PAN database, jurisdictional restructuring and the circumstances in which the assessment was completed. According to the Tribunal, those facts were different from the present case, where there had been no restructuring requiring a different jurisdiction and no Section 127 transfer order had been produced.

Ultimately, the Tribunal found two jurisdictional defects: first, there was no order under Section 127 transferring the case from ITO-1(4), Raipur to ITO-1(2), Raipur; and second, the Assessing Officer who completed the reassessment had not issued a notice under Section 148 to the assessee. It further held that the Section 148 notice issued by ITO-1(4) suffered from inherent jurisdictional invalidity in light of the principles referred to from Rajeev Bansal. The reassessment was therefore held to be arbitrary, bad in law and quashed. Once the assessment was quashed, subsequent proceedings became non-est and the remaining grounds on merits became academic. The appeal was accordingly allowed. The order was pronounced in open court on 9 July 2026.

Cases Discussed

Jagdish Kumar Yadav Vs. ITO-1(1), Bhilai (C.G.) (ITAT Raipur), ITA No.593/RPR/2025, dated 04.02.2026
Harish Kumar Chhabbda Vs. Pr. Commissioner of Income Tax (Chhattisgarh High Court), TAXC No.138 of 2023, dated 08.10.2025
Virendra Gir Goswami Vs. Income Tax Officer (ITAT, SMC Bench, Raipur), ITA No.411/RPR/2025, dated 22.07.2025
Inder Singh Vs. The State of Madhya Pradesh (Supreme Court), Civil Appeal No………. /2025, Special Leave Petition (Civil) No.6145 of 2024, dated 21st March, 2025.
Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.) (Chhattisgarh High Court), Tax Case No.17/2025, dated 24.02.2025
Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur (Supreme Court), Civil Appeal Nos………… /2025 [Special Leave Petition (Civil) Nos. 26310-26311/2024], dated 31.01.2025
Rahul Tyagi Vs. Income Tax Officer (ITAT Raipur), ITA No.113/RPR/2024, dated 19.03.2025
Union of India vs. Rajeev Bansal (Supreme Court), (2024) 469 ITR 46 (SC)
DCIT (Exemption) & Ors. Vs. Kalinga Institute of Industrial Technology (Supreme Court), (2023) 151 [com] 434 (SC)
Umanath Pandey v. State of UP (Supreme Court), (2009) 12 SCC 40-43
Biecco Lawrie Ltd v. State of West Bengal (Supreme Court), (2009) 10 SCC 32
National Thermal Power Company Ltd. Ltd. Vs. CIT (Supreme Court), (1998) 229 ITR 383 (SC)
Collector, Land Acquisition vs. Mst. Katiji & Ors. (Supreme Court), 167 ITR 471 (SC)

FULL TEXT OF THE ORDER OF ITAT RAIPUR

The captioned appeal preferred by the assessee emanates from the order of the Ld.CIT(A)/Addl./JCIT (A)-3, Bengaluru dated 13.02.2026 for the assessment year 2011-12 as per the grounds of appeal of record.

2. At the outset, it is noted that this appeal is time barred by 18 days. That explaining the reasons for such delay, the assessee had filed a condonation petition as well as an affidavit. That in the affidavit in clause 4 and 5, it is mentioned that all the hearing notices and the order passed u/s 250 of the Act was sent to the e-mail of the assessee, which is currently not in use by him. It is also stated in the affidavit that assessee had opted “NO” in form No. 35 filed before the CIT(A) for receiving any notices/communication in email Id, even though, assessee has not received any physical notice, because of that, the assessee was not aware of the order passed by the Ld. CIT(A) /NFAC. The Ld. Sr. DR did not raise any objection regarding condonation of delay of 18 days. Considering the entire facts and circumstances, I herein refer to the following decisions:

(i) Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos…….. /2025 [Special Leave Petition (Civil) Nos. 26310-26311/2024], dated 31.01.2025 passed by the Hon’ble Supreme Court.

(ii) Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), Tax Case No.17/2025, dated 24.02.2025, passed by Hon’ble High Court of Chhattisgarh.

(iii) Inder Singh Vs. The State of Madhya Pradesh, Civil Appeal No………. /2025, Special Leave Petition (Civil) No.6145 of 2024, dated 21st March, 2025.

(iv) Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) passed by the Hon’ble Supreme Court, accordingly, the said delay of 18 days is condoned.

3. Ld. Counsel of the assessee submitted that the notice under section 148 of the Act dated 26.03.2018 had been issued by ITO-1(4), Raipur whereas the assessment was completed under section 143(3) r.w.s. 147 of the Act by ITO-1(2), Raipur. It is the contention of the Ld. Counsel that while transferring the case from ITO-1(4), Raipur to ITO-1(2), Raipur, there was no mandatory order of transfer under section 127 of the Act. In this regard, the revenue had been given an opportunity and the Ld. Sr. DR placed a report from the AO, the same is extracted as follows:

As per the Notification No. 1/2014-15 dated 15.11.2014 of the Income Tax Act, 1961 was passed u/s. 120 of the Act by Addl. Commissioner of Income Tax, Range-I, Raipur that the above two offices were under the jurisdictional area of the Range-1, Raipur.

As per the ITBA data, the case of Manmohan Das Kurre, PAN- BZAPK3035R has been transferred from ITO-1(4), Raipur to ITO-1(2), Raipur on 14.08.2018.

(iii) During the assessment proceedings the assessee has given ample opportunities to establish his facts. During assessment proceedings the assessee has not made any objection regarding the reassessment notice u/s 148 of the Act. All the required materials and information were provided to the assessee from time to time properly. Since the assessee has not submitted proper documentary evidence in support of his claim regarding the cash deposit of Rs. 30,30,000/-. Therefore, the assessee has no valid explanations regarding the cash deposits, onus was on the assessee to establish his claim. Thus, the Assessing Officer has rightly made addition of Rs. 25,95,000/- as unexplained investment u/s 69 of the Act. Hence, ground raised by the assessee is baseless and unwarranted.

Therefore, it is requested to kindly make a plea before the Hon’ble ITAT to request to kindly decide the case on merits in favour of Revenue.

Yours sincerely,

(Siba Prasad Mallik)
Income Tax Officer-1(2), Raipur

Copy to:

1. The Addl. Commissioner of Income Tax, Range-1, Raipur for kind information.

Income Tax Officer-1(2), Raipur

4. That on perusal of the aforestated report, it is evident that the revenue contends since both the AOs are within the same range jurisdiction, hence, the order of transfer under section 127 of the Act is not required. Ld. Sr. DR added to the report of the AO and submitted that as per Clause (3) and (4) of the section 127 of the Act, if the AOs are within the same city, locality and place then there is no requirement of order of transfer under section 127 of the Act. Clarifying the appropriate legal scenario, Ld. Counsel for the assessee pointed out that section 127(1) of the Act refers to “after giving assessee reasonable opportunity of being heard”, therefore, in some cases such opportunity of hearing is not mandatory for the Department to provide to the assessee which are defined within the parameters of clause (3) and (4) of section 127 of the Act. But this do not absolve the Department from mandatory requirement of issuance of order of transfer under section 127 of the Act transferring the jurisdiction from one AO to another. Nowhere in the provision it says that if jurisdiction is transferred from one AO to another within same range then section 127 of the Act need not be complied with. It is also not for the AO to suo moto transfer the jurisdiction to another AO. Such transfer order has to be issued by the competent authority only. In the present case, therefore, there is no order under section 127 for transferring jurisdiction from ITO Ward 1(4), Raipur to ITO, Ward-1(2), Raipur. In absence of the same the assessment framed by the ITO Ward-1(2), Raipur is arbitrary, bad in law and liable to be quashed.

5. I find the same legal principle is enshrined in the judgment of this Bench in ITA 787/RPR/2025 in the case of Smt. Deepti Shrivastav vs. ITO, Ward-1(3), Raipur passed on 02.03.2026, the relevant paragraphs are extracted as follows:

5. In this case, the contention in law raised by the IA. Counsel for the assessee are that first of all, there is no valid order of transfer u/s. 127 of the Income Tax Act, 1961 (for short ‘the Act’) transferring the case from ITO-4(4), Raipur to ITO-3(2), Raipur. Second limb of argument of the Ld. Counsel is that ITO-3(2), Raipur had completed the assessment u/s.147 r.w.s. 143(3) of the Act, dated 19.11.2018 without issuance of notice u/s. 148 of the Act. Issuance of notice u/s.148 of the Act is “sine qua non” for framing assessment u/s.147 r.w.s. 143(3) of the Act. It was further submitted by the Ld. Counsel that notice u/s.148 of the Act was issued by ITO-4(4), Raipur, whereas, fmally the assessment was completed by ITO-3(2), Raipur. Meaning thereby, the ITO-3(2), Raipur before framing the assessment u/s.147 r.w.s. 143(3) of the Act had never issued any notice u/s.148 of the Act.

6. As regards the issue of non-availability of transfer order u/s.127 of the Act, the Revenue itself admits the same as per report of the A.O dated 24.02.2026 filed by the Ld. Sr. DR. The said report of the A.O is extracted as follows:

“Kindly refer to your letter F.No.Addl. CIT/RPR/Report/2025-26, dated 17.02.2026 on the subject captioned above.

In this regard, the pointwise replies are submitted as under:-

1.1. On perusal of case record, it has not been traced any order ups 127 of the I.T. Act 1961 except a letter of the then ITO-4(4), Raipur regarding transfer of time barring scrutiny cases (copy attached). Regarding jurisdiction over the transfer of case, it is submitted that vide notification dated 15.11.2014, territorial reallocation of wards a Raipur was undertaken and consequent upon this restructuring, the jurisdiction over the area Pachpedi Naka, Raipur automatically transferred to the then ITO Ward-3(2), Raipur. Thereafter, the ITO, Ward-3(2), Raipur on 14.08.2018, pursuant to the notice issued earlier. Continued the jurisdiction after reallocation and passed the order of assessment under section 147 r.w.s. 143(3) of the I.T. Act, 1961 on 19.11.2018 in this case. Further, the assessee has failed to raise objection under section 124(3) o the I.T. Act within one month of service of notice or within one month from the date of issuance of notice or completion of assessment in this case.

2. 2. Further on perusal of case record, it is respectfully submitted that though the assessee had filed return of income under section 139(1), no return was filed it response to notice issued under section 148 of the Act. The assessee also did no communicate that the original return filed under section 139(1) may be treated as return filed in compliance with notice under section 148. In absence of such compliance, there was no return available on record in the reassessment proceedings. Since issuance of notice under section 143(2) presupposes furnishing of a return in response to statutory notice, the same was not mandatory in the present case. Accordingly, the assessment has been validly completed under section 143(3 read with section 147 of the Income-tax Act, 1961.”

7. In such scenario, I find that similar issue had been adjudicated by the ITAT, Raipur, “SMC” Bench in the case of Rahul Tyagi Vs. Income Tax Officer ITA No.113/RPR/2024, dated 19.03.2025. For the sake of completeness, the relevant paras in the case of Rahul Tyagi Vs. Income Tax Officer (supra) are extracted as follows:

“2. In this case, the assessee has filed both legal ground as well as grounds on merits. The Ld. Counsel for the assessee submitted that he would assail the legal ground first and if the said legal ground is answered affirmative, then the grounds on merits becomes academic. The Ld. Counsel for the assessee submitted that first notice u/s. 143(2) of the Act for A.Y.2016-17 for initiating limited scrutiny had been issued by the ITO, Ward-4(5), Raipur, dated 18.09.2017. Thereafter, another notice u/s. 142(1) of the Act for the same A.Y. dated 09.06.2018 was issued by the ITO, Ward-3(1), Raipur. That further, the T.A. Counsel has annexed the return of income and acknowledgement given by the department for the assessment year under consideration where the designation of the A.O (Ward-Circle) is appearing as Ward-3(1), Raipur. In this background, the T.A. Counsel submitted that firstly, if the original jurisdiction of the assessee is with ITO, Ward-4(5), Raipur who had initiated the proceedings for limited scrutiny and later on, transferred to the ITO, Ward-3(1), then as per the mandatory requirement of the Act, order of transfer u/s. 127 of the Act is required. However, no such order has been placed by the department and nothing is there on record that such order of transfer u/s. 127 of the Act was acquired; secondly, if it is accepted that the actual jurisdiction of the officer regarding the assessee was the ITO, Ward-3(1), Raipur which is likely so since the e-filed return is admittedly taken by the designation of the A.O as per the address of the assessee to be ITO, Ward-3(1) appearing in the acknowledgment of the ITR filed on 22.02.2017 in the said assessment year, Page 8-9 of APB. Now if that be so, then the initiation of the proceedings of limited scrutiny i.e. with regard to the first notice u/s.143(2) of the Act issued by the ITO, Ward-4(5), Raipur suffers from valid jurisdiction, resultantly then subsequent assessment framed by the ITO, Ward-3(1), Raipur becomes invalid and non-est in the eyes of law.

3. Per contra, the T.A. Sr. Departmental Representative (for short DR’) vehemently submitted that as per Section 124(3)(a) of the Act, if the assessee had any objection regarding the jurisdiction of the Assessing Officer, then the same could have been raised within one month from the date on which he was served with the notice u/s. 142(1) and 143(2) of the Act. However, in the present case, the assessee had failed to do so. The Ld. Sr. DR relied on the judgment of the Hon’ble Supreme Court in the case of DCIT (Exemption) & Ors. Vs. Kalinga Institute of Industrial Technology (2023) 151 com 434 (SC), wherein the Hon’ble Apex Court has ruled that where the assessee had participated pursuant to the notice issued under Section 142(1) and had not questioned the jurisdiction of the assessing officer, then Section 124(3)(a) of the Income Tax Act precludes the assessee from questioning the jurisdiction of the assessing officer, if he does not do so within 30 days of receipt of notice under Section 142(1).

4. I have carefully considered the submissions of both the parties, considered the material available on record and facts and circumstances involved in the present case. In so far the legal issue is concerned, it is apparent from record as annexed in the paper book that the first notice u/s.143(2) of the Act, dated 18.09.2017 has been issued by the ITO, Ward-4(5), Raipur. Thereafter, second notice u/s.142(1) of the Act, dated 09.06.2018 was issued by the ITO, Ward-3(1), Raipur. However, there is no iota of evidence whether there is any order of the Pr. CIT u/s. 127 of the Act for transferring of the jurisdiction from one Assessing Officer to another in the present case of the assessee. It is also noted from the e-filed return and the acknowledgement of the department that the designation of the jurisdictional Assessing Officer is mentioned as ITO, Ward-3(1), Raipur. If that is so, then also, the first notice i.e. notice issued u/s. 143(2) of the Act, dated 18.09.2017 by the ITO, Ward-4(5), Raipur is without jurisdiction, invalid and bad in law.

5. In so far the reliance placed by the Ld. Sr. DR on the judgment of the Hon’ble Apex Court in the case of DCIT (Exemption) & Ors. Vs. Kalinga Institute of Industrial Technology (supra), wherein, the conduct of the assessee was determined while accepting or non-accepting the jurisdiction by way of participation in the proceedings, the word “participating” in this present context should not be construed in any manner given the text of the said decision to prevent the right of the assessee for challenging any legal issue including the issue of jurisdiction before any appellate forum as had been held by the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC). Rightfully so mentioned in the said judgment, the Hon’ble Apex Court held that when certain legal issues have been arisen and the assessee has failed to raise such legal issues before the sub-ordinate authorities, then he should not be prevented from raising the same before any other appellate authority. Therefore, taking guidance from the aforesaid judicial pronouncement of the Hon’ble Apex Court, the contention regarding the issue of jurisdiction is held to be valid as had been raised by the assessee first time before the Tribunal. The decision of the Hon’ble Supreme Court in the case of DCIT (Exemption) & Ors. Vs. Kalinga Institute of Industrial Technology (supra) as has been relied on by the Ld. Sr. DR is clearly focused on the parameter of compliance. However, in the present case as demonstrated in the record, it is not that of compliance and rather, it is ambiguity in issuance of notice and denying an opportunity to the assessee as to whether he should respond to the ITO, Ward-4(5), Raipur or ITO, Ward-3(1), Raipur. There are plethora of judicial pronouncements wherein it had been held that the tax payer should be provided opportunity to prepare for his defence in timely and appropriate manner and if there is any ambiguity/confusion arising in the said hearing notice which prevents the assessee to defend himself, then such hearing notices and subsequent proceedings have to be struck down holding them to be arbitrary, bad in law. If this kind of ambiguity in issuance of notice by the appropriate authority is allowed then it would highly effect smooth running of business activities or for that matter generating income to the assessee tax payer. If the assessee tax payer is not able to earn income, then there is no question of paying any taxes. Therefore, the assessee should be allowed to prepare his defence as regards the proper jurisdiction before whom he shall make necessary compliances.

6. Derived from the Latin word “notitia”, which means being known, notice is the starting of any hearing. Unless a person knows the issues of the case in which he is involved, he cannot defend himself. For a notice to be adequate it must contain- (a) Time, place and nature of hearing; (b) Legal authority under which hearing has to be held; and (c) The specific charges, grounds and proposed actions the accused has to meet. This is the very edifice of the principle of natural justice. There is mandatory requirement of reasonable opportunity of being heard. This pre-requires issuance of a proper notice. The authority has to issue Show Cause to the party/ assessee to explain and produce evidence before an adverse inference may be drawn against him. The notice should be specific and unambiguous so that proper compliance can be made by the assessee. The importance of a show cause notice has been reiterated by Supreme Court in the case of Umanath Pandey v. State of UP (2009) 12 SCC 40-43 wherein the Hon’ble Apex Court has held that “Notice is the first limb of this principle. It must be precise and unambiguous. It should appraise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated”. In the case of Biecco Lawrie Ltd v. State of West Bengal (2009) 10 SCC 32, the Supreme Court observed that “One of the essential ingredients of fair hearing is that a person should be served with a proper notice, i.e. a person has a right to notice. Notice should be clear and precise so as to meet and make an effective defence. Denial of notice and any ambiguity there denied the right of the assessee for fair and judicious proceedings. The adequacy of notice is a relative term and must be decided with reference to each case.”

7. Rebutting the facts of the present case, it is noted as per the documents on record that the first notice u/s. 143(2) of the Act, dated 18.09.2017 was issued by the ITO, Ward-4(5), Raipur and thereafter, another notice u/s. 142(1) of the Act, dated 09.06.2018 was issued by the ITO, Ward-3(1), Raipur who had framed the assessment without any order of transfer as required u/s.127 of the Act by the Ld. Pr. CIT. Similarly, if it is to be accepted that the actual jurisdiction is with the ITO, Ward-3(1), Raipur then first notice u/s. 143(2) of the Act, dated 18.09.2017 which had been issued for initiating the scrutiny proceedings by the ITO, Ward-4(5), Raipur is definitely without a valid jurisdiction over the assessee. When the issuance of notice and framing of assessment order suffers from lack of jurisdiction as enshrined in the statute then all subsequent proceedings becomes non-est in the eyes of law.

8. I find that the Hon’ble Supreme Court in its recent order passed in the case of Union of India Vs. Rajeev Bansal (2024) 469 ITR 46 (SC) had, inter alia, observed that the order passed without jurisdiction is nullity. It was further observed that if a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. Elaborating further, the Hon’ble Apex Court had observed that any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid. Apart from that, it was observed that as there cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment, therefore, any consequential order passed or action taken will be invalid and without jurisdiction. For the sake of clarity, the observations of the Hon’ble Apex Court are culled out as under:

“xxxxx xxxxx xxxxxx

30. If a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. (Dr. Premachandran Keezhoth Vs. Chancellor, Kannur University). Further, when a statute vests certain power in an authority to be exercised in a particular manner, then that authority has to exercise its power following the prescribed manner (CIT Vs. Anjum M.H. Ghaswala; State of Uttar Pradesh Vs. Singhara Singh). Any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid……..

“xxxxx xxxxx xxxxxx

32. A statutory authority may lack jurisdiction if it does not fulfil the preliminary conditions laid down under the statute, which are necessary to the exercise of its jurisdiction. (Chhotobhai Jethabhai Patel and Co. V. Industrial Court, Maharashtra Nagpur Bench). There cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment. (Superintendent of Taxes Vs. Onkarmal Nathmal Trust). An order passed without jurisdiction is a nullity. Any consequential order passed or action taken will also be invalid and without jurisdiction. (Dwarka Prasad Agrawal V. B.D. Agrawal). Thus, the power of assessing officers to reassess is limited and based on the fulfilment of certain preconditions. (CIT Vs. Kelvinator of India Ltd.)”

9. With these observations, the assessment framed by the ITO-3(1) Raipur vide his order passed u/s.143(3) of the Act, dated 26.10.2018 in absence of an order of transfer u/s.127 of the Act having been passed by the T.A. Pr.CIT and without any issuance of notice by him u/s. 143(2) of the Act to the assessee, is held to be without jurisdiction, invalid and bad in law and thus, the same is quashed.

10. Needless to say, once the assessment has been quashed for want of valid assumption of jurisdiction then all the other proceedings subsequent thereto becomes non-est in the eyes of law. As the legal issue has been answered in favour of the assessee then the grounds on merits becomes academic.

11. As per the aforesaid terms the grounds of appeal raised by the assessee stands allowed.

12. In the result, appeal of the assessee is allowed.”

8. Coming to the second issue i.e. issuance of notice u/s.148 of the Act is “sine-qua-non” for completion of assessment u/s.147 r.w.s. 143(3) of the Act, I find that similar issue has been adjudicated by the ITAT, SMC Bench, Raipur in the case of Jagdish Kumar Yadav Vs. ITO-1(1), Bhilai (C.G.), ITA No.593/RPR/2025, dated 04.02.2026 in favour of the assessee and against the Revenue. The relevant paras of the said decision are extracted as follows:

“3. The legal ground assailed by the T.A. Counsel for the assessee is that in this case, notice u/s.148 of the Income Tax Act, 1961 (for short the Act’) has been issued by the ITO-2(1), Bhilai on 31.03.2017 but the assessment was completed by the ITO-2(2), Bhilai u/s. 143(3) r.w.s. 147 of the Act, dated 15.12.2017 without any valid order of transfer u/s. 127 of the Act. That further, it was submitted by the Ld. Counsel that the assessment was completed by the ITO-2(2), Bhilai without issuance of any notice u/s.148 of the Act, therefore, in these set of facts, firstly, there is no mandatory valid order of transfer u/s. 127 of the Act for transferring the case of the assessee from ITO-2(1), Bhilai to ITO-2(2), Bhilai and secondly, the ITO-2(2), Bhilai before completing the assessment has not issued any notice u/s.148 of the Act.

4. The Ld. Sr. DR relied on the orders of the sub-ordinate authorities a/w. judgment of the Hon’ble High Court of Chhattisgarh in the case of Harish Kumar Chhabada Vs. Pr. Commissioner of Income Tax, TAXC No.138 of 2023, dated 08.10.2025. Also, the Ld. Sr. DR submitted a report dated 18.12.2025 which reads as follows:

5. Per contra, the Ld. Counsel for the assessee had filed written submissions submitting that the facts regarding the case of the assessee are substantially distinguishable from the facts of the case referred to by the Ld. Sr. DR. The relevant submission of the Ld. Counsel is extracted as follows:

6. In this regard, I refer to the order of the ITAT, SMC Bench, Raipur in the case of Virendra Gir Goswami Vs. Income Tax Officer, ITA No.411/RPR/2025, dated 22.07.2025 wherein similar issue has been dealt with by the Tribunal. For the sake of completeness, the relevant observations of the Tribunal are extracted as follows:

“8. Reverting to the facts of the present case, it is noted that notice u/s. 148 of the Act has been issued by the ITO-1(3), Bhilai and thereafter, assessment was completed by the ITO-2(2), Bhilai without any order of transfer as mandated u/s.127 of the Act by the competent authority. Therefore, such framing of assessment by the ITO-2(2), Bhilai in absence of valid order of transfer u/s.127 of the Act is held to be without inherent valid jurisdiction. For the sake of completeness, the relevant paras in the case of Rahul Tyagi Vs. Income Tax Officer (supra) are extracted as follows:

6. Derived from the Latin word “notitia”, which means being known, notice is the starting of any hearing. Unless a person knows the issues of the case in which he is involved, he cannot defend himself. For a notice to be adequate it must contain- (a) Time, place and nature of hearing; (b) Legal authority under which hearing has to be held; and (c) The specific charges, grounds and proposed actions the accused has to meet. This is the very edifice of the principle of natural justice. There is mandatory requirement of reasonable opportunity of being heard. This pre-requires issuance of a proper notice. The authority has to issue Show Cause to the party/ assessee to explain and produce evidence before an adverse inference may be drawn against him. The notice should be specific and unambiguous so that proper compliance can be made by the assessee. The importance of a show cause notice has been reiterated by Supreme Court in the case of Umanath Pandey v. State of UP (2009) 12 8CC 40-43 wherein the Hon’ble Apex Court has held that “Notice is the first limb of this principle. It must be precise and unambiguous. It should appraise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated”. In the case of Biecco Lawrie Ltd v. State of West Bengal (2009) 10 SCC 32, the Supreme Court observed that “One of the essential ingredients of fair hearing is that a person should be served with a proper notice, i.e. a person has a right to notice. Notice should be clear and precise so as to meet and make an effective defence. Denial of notice and any ambiguity there denied the right of the assessee for fair and judicious proceedings. The adequacy of notice is a relative term and must be decided with reference to each case.”

“xxxxx xxxxx xxxxxx

11. As per the aforesaid terms the grounds of appeal raised by the assessee stands allowed.

12. In the result, appeal of the assessee is allowed.”

9. Respectfully following the aforesaid decision on the same parity of reasoning, I hold that the assessment framed by ITO-2(2), Bhilai vide his order passed u/s.147 r.w.s.143(3) of the Act, dated 24.12.2018 in absence of an order of transfer u/s. 127 of the Act and without any issuance of notice by him u/s.148 of the Act to the assessee, is held to be without valid jurisdiction, bad in law hence quashed.

10. Since the assessment is quashed thereafter all the other proceedings becomes non-est in the eyes of law. As the legal issue has been answered in favour of the assessee therefore the grounds on merits becomes academic only.

11. As per the aforesaid terms the grounds of appeal raised by the assessee stands allowed.”

7. As per the aforesaid judicial pronouncement, on the same parity of reasoning and similar terms, I hold that assessment framed by the ITO-2(2), Bhilai vide order passed u/s. 143(3) r.w.s. 147, dated 15.12.2017 in absence of an order of transfer u/s.127 of the Act and without any issuance of notice by him u/s. 148 of the Act to the assessee is held to be without valid jurisdiction, bad in law, hence quashed.

8. That once the assessment is quashed, therefore, all the other subsequent proceedings becomes non-est as per law. Since this legal issue has been answered in favour of the assessee therefore the grounds on merits becomes academic only.

9. Before parting it is stated that in so far the reliance placed by the T.A. Sr. DR on the judgment of the Hon’ble High Court of Chhattisgarh in the case of Harish Kumar Chhabbda Vs. Pr. CIT (supra), the same is distinguishable on facts of the present case. Firstly, in the case of Harish Kumar Chhabbda Vs. Pr. CIT(supra), the place of residence of the assessee and the place of business was within the jurisdiction of two separate A.Os and the assessee has given PAN database to the department in relation to the residence of the assessee. The Hon’ble Jurisdictional High Court in the aforesaid case (supra) has held that since informations have been furnished by the assessee himself regarding PAN database, therefore, there is no need for any correction of jurisdiction. So far as the case of the present assessee is concerned, there is no such demarcation of PAN database regarding residence and business and the PAN database given to the department by the assessee pertains to ITO, Ward-2(2), Bhilai whereas, notice u/s.148 of the Act was issued by the ITO, Ward-2(1), Bhilai. Secondly, in the case of Harish Kumar Chhabbda Vs. Pr. CIT (supra), there was restructuring in the jurisdiction vide Notification dated 15.11.2014 and the ultimate jurisdiction vested with ITO, Ward-2(1), Raipur and hence, in the case of the Harish Kumar Chhabbda Vs. Pr. CIT (supra), the jurisdictional A.0 i.e. ITO, Ward-2(1), Raipur had passed the assessment order. However, in the case of the assessee, there is no restructuring. Thirdly, since there is no restructuring, the order u/s.127 of the Act is mandatory for transferring the case of the assessee from ITO, Ward-2(1), Bhilai to ITO, Ward-2(2), Bhilai. Since the judgment of the Hon’ble Jurisdictional High Court in the case of the Harish Kumar Chhabbda Vs. Pr. CIT (supra) is distinguishable on facts, therefore, the decision relied upon by the Ld. Sr. DR will not be of assistance to the Revenue.

10. In the result, appeal of the assessee is allowed.”

9. Considering the aforesaid factual position and the aforesaid judicial pronouncements, it is discernable that firstly, there is no order of transfer u/s. 127 of the Act transferring the case of the assessee from ITO-4(4), Raipur to ITO-3(2), Raipur and secondly, assessment u/s.147 r.w.s. 143(3) of the Act was completed by the ITO-3(2), Raipur without issuance of any notice u/s.148 of the Act. In view thereof, I hold that ITO-3(2), Raipur who had completed the assessment in the case of the assessee u/s. 147 r.w.s. 143(3) of the Act did not have valid inherent jurisdiction to frame such assessment which, therefore, is arbitrary, void ab initio and bad in law, hence, quashed.

10. Since the assessment itself is quashed subsequent thereof all the other proceedings are non-est as per law. This legal issue is answered in favour of the assessee and against the Revenue, therefore, all other grounds becomes academic only.

11. In the result, appeal of the assessee is allowed as per afore-stated terms.

6. Another aspect is that as per the decision of the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal (2024) 469 ITR 46 (SC), wherein the Hon’ble Supreme Court observed that if a statute expressly confers a power or imposes a duty on a particular authority, then such power and duty must be exercised or performed by that authority itself. It is further held that any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid. That there cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of the assessment. In this regard, notice of reassessment that has been issued under section 148 of the Act by ITO, ward-1(4), Raipur, suffers from jurisdictional defects since finally assessment under section 147 r.w.s. 143(3) of the Act has been completed by the ITO, Ward-1(2), Raipur also without issuance of notice under section 148 of the Act, in this count also assessment framed is invalid.

7. Respectfully following the aforestated judicial pronouncement and upon examination of the facts and circumstances, the reassessment framed is vitiated, since, there is no order of transfer under section 127 of the Act and second, the AO completing the reassessment has not issued any notice under section 148 of the Act to the assessee and 3^rd notice under section 148 of the Act as has been issued by the ITO Ward-1(4), Raipur suffers from being inherent invalid jurisdiction as per Hon’ble Apex Court in the case of Rajeev Bansal (supra), the assessment being arbitrary bad in law is therefore, quashed. Subsequent proceedings are non-est as per law. Rest of the grounds stand academic only.

8. In the result, the appeal of the assessee is allowed.

Order pronounced in open court on 9th day of July, 2026.