Transfer of jurisdiction in absence of any order u/s 127 is unsustainable

Vedanta Resources Ltd Vs ACIT (Orissa High Court)

Orissa High Court held that transfer of jurisdiction from CIT (IT)-1, New Delhi to Bhubaneswar without passing of any order under section 127 of the Income Tax Act transferring jurisdiction is unsustainable and liable to be set aside.

Facts- Vedanta Resources Limited (VRL) has filed these writ petitions questioning the notices dated 31st March, 2021 issued by the Assistant Commissioner of Income Tax, International Taxation, Bhubaneswar (Opposite Party No.1) under Section 148 of the Income Tax Act, 1961 (‘Act’) as well as the reasons for initiating the reassessment u/s. 147/148 of the Act for the Assessment Years (AYs) 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18.

The Petitioner has drawn the attention of this Court to the web portal of the Department where in the page titled ‘Know Your Jurisdictional AO’, the jurisdiction of the Petitioner is indicated as ‘Circle International Taxation (1)(1)(1)’ with its address at New Delhi. The e-mail id displayed corresponds to the said DCIT. On this basis, it is contended that Opposite Party No.1 i.e. ACIT International Taxation, Bhubaneswar could not have issued the impugned notices to the Petitioner. It is pointed out that the Petitioner has not been made aware of or provided any order passed u/s. 127 of the Act transferring the jurisdiction vis-à-vis the Petitioner from Delhi to Bhubaneswar.

Conclusion- A perusal of Section 127 (2) of the Act indicates that it envisages transfer of cases of an Assessee to an Assessing Officer (AO) not subordinate to the same Commissioner, who originally exercises jurisdiction over the Assessee. In the present case, it is CIT (IT)-1, New Delhi who would have to pass orders transferring jurisdiction of the cases of VRL to O.P. No.1 in Bhubaneswar. The latter is not subordinate to the CIT (IT)-1, New Delhi, but to his counterpart in Kolkata. In such event, under Section 127(2)(a), no such transfer of jurisdiction can take place without affording the Assessee a reasonable opportunity of being heard in the matter. The Department in the present case has not been able to produce any such order, transferring the jurisdiction vis-à-vis VRL from the CIT (IT)-1, New Delhi to Opposite Party No.1 in Bhubaneswar.

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