An officer divested of jurisdiction under Section 127 cannot issue a valid Section 148 notice.

The petitioner-company, engaged in trading commodities, shares, securities and mutual funds, shifted its registered office from Kolkata to Gujarat pursuant to an order of the Company Law Board dated 4 February 2011 and obtained a corresponding change in its PAN address.

On 7 December 2015, the Principal Commissioner of Income Tax-1, Kolkata, exercising powers under Section 127 of the Income Tax Act, 1961, transferred the petitioner’s case from the Income Tax Officer, Ward 3(3), Kolkata, to the Income Tax Officer, Ward 3(1)(4), Ahmedabad, “with immediate effect”.

Subsequent assessments for A.Ys. 2013-14 and 2014-15 were completed by the Ahmedabad Assessing Officer.

For A.Y. 2012-13, the petitioner’s return had been processed under Section 143(1), without scrutiny proceedings under Section 143(2).

On 31 March 2019, the Kolkata Assessing Officer issued a notice under Section 148 seeking to reopen the assessment.

The notice recorded that approval had been obtained from the PCIT-1, Kolkata, notwithstanding the earlier transfer of the petitioner’s case to Ahmedabad.

The petitioner objected that the Kolkata officer lacked jurisdiction, but the objection was not addressed and the officer proceeded to call for an e-return.

The Revenue contended that the petition was premature, that an alternative remedy existed, and that the PAN database continued to reflect jurisdiction with the Kolkata officer.

Whether the Income Tax Officer, Ward 3(3), Kolkata, continued to be the petitioner’s “Assessing Officer” on 31 March 2019 after the petitioner’s case had been transferred to the Ahmedabad charge under Section 127 of the Income Tax Act?

Whether a notice under Section 148 issued by an officer who lacked jurisdiction over the assessee was valid, merely because the PAN database continued to reflect that officer’s jurisdiction?

Whether the impugned notice and consequential reassessment proceedings were liable to be quashed in writ jurisdiction despite the Revenue’s objection regarding alternative remedy?

The Court applied Sections 147 and 148 of the Income Tax Act, 1961, which confer the power to reopen an assessment and issue the foundational reassessment notice only upon the “Assessing Officer”.

Section 2(7A) defines “Assessing Officer” as the competent income-tax authority vested with relevant jurisdiction under directions or orders issued under Section 120 or any other provision of the Act.

Section 127 authorises the transfer of a case from one Assessing Officer to another, and its Explanation includes all proceedings—pending, completed or commenced thereafter—in respect of any assessment year.

Consequently, upon a valid transfer under Section 127, the transferee officer alone possesses jurisdiction over the assessee, while the transferor officer is divested of jurisdiction.

The Court relied on Hynoup Food & Oil Industries Ltd. v. Assistant Commissioner of Income-Tax, (2008) 307 ITR 115 (Guj.), holding that a notice under Section 148 issued by an officer lacking jurisdiction, and the proceedings founded upon it, are without jurisdiction and unsustainable.

The Section 127 transfer order dated 7 December 2015 expressly transferred the petitioner’s case from Kolkata to Ahmedabad with immediate effect and was neither recalled nor set aside.

The Revenue itself acted upon the transfer by completing the petitioner’s assessments for A.Ys. 2013-14 and 2014-15 through the Ahmedabad officer.

Therefore, on 31 March 2019, the Ahmedabad officer alone was the petitioner’s Assessing Officer under Section 2(7A), and the Kolkata officer lacked authority to form the requisite belief, obtain sanction or issue a notice under Section 148.

The Court rejected reliance on the PAN database, holding that administrative database entries cannot confer statutory jurisdiction; any failure to migrate the PAN was merely an internal lapse of the Revenue and could not override the Section 127 order.

Since a valid Section 148 notice issued by the jurisdictional Assessing Officer was a condition precedent to reassessment, the notice issued by the Kolkata officer was non-est and could not sustain consequential proceedings.

Jurisdiction had vested exclusively in the Income Tax Officer, Ward 3(1)(4), Ahmedabad, pursuant to the Section 127 transfer order dated 7 December 2015.

The notice dated 31 March 2019 issued under Section 148 for A.Y. 2012-13, together with all consequential proceedings, was quashed and set aside.

The writ petition was allowed, the Rule was made absolute, and there was no order as to costs.