Vishan Gunna Vs ACIT (ITAT Delhi)
No Section 127 Order, No Jurisdiction- ITAT quashes assessment- Transfer without section 127 order invalidates Assessment
Assessee e-filed her return with an Indian address in Hyderabad & claimed capital gains exemptions u/s 54F & 54EC. Notices u/s 143(2) & assessment proceedings were initiated by the ACIT (International Taxation) in New Delhi. Assessment was completed at ₹10.05 crore against returned income of ₹9.99 lakh. Assessee challenged the assessment on various factual & legal grounds, including jurisdiction.
Assessee raised (for the first time before the ITAT) that her Indian jurisdictional AO should have been in Hyderabad. No order u/s 127 was passed to transfer jurisdiction from Delhi to Hyderabad or vice versa. Hence, the assessment order passed by the New Delhi AO was without jurisdiction & void. Ground being legal in nature requiring no verification of the facts & it is established proposition of law that legal ground can be raised at any stage of proceedings as has been held by the Hon’ble Supreme Court in the case of NTPC reported in 229 ITR 383 (SC), additional ground was admitted.
ITAT noted that Assessee had consistently filed returns with Hyderabad address. Although initial notice was issued by ACIT, International Taxation-1(1)(1), Delhi, the final assessment was completed by ACIT, International Taxation-1(3)(1), Delhi, without any order u/s 127. Tribunal held that in the absence of an order u/s 127, the jurisdiction could not be validly transferred or assumed. Reliance was placed on Raj Sheela Growth Fund (P) Ltd. (affirmed by Delhi HC), which clarified that assessments without valid jurisdiction (i.e., absent section 127 transfer) are void ab initio.
