Akula Suvarna, Nizamabad v. ACIT, Nizamabad

ITSSA 85/HYD/2003 | misc
Pronouncement Date: 29-01-2010 | Result: Dismissed

Appeal Details

RSA Number 8522516 RSA 2003
Assessee PAN ABQPA5937M
Bench Hyderabad
Appeal Number ITSSA 85/HYD/2003
Duration Of Justice 6 year(s) 7 month(s) 11 day(s)
Appellant Akula Suvarna, Nizamabad
Respondent ACIT, Nizamabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-01-2010
Date Of Final Hearing 05-01-2010
Next Hearing Date 05-01-2010
Assessment Year misc
Appeal Filed On 18-06-2003
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER IT(SS)NO.85/HYD/2003 ASST. YEARS: 1988-99 TO 1999-2000 SMT.AKULA SUVARNA NIZAMABAD (PAN - ABQPA 5937 M) VS. ACIT CIRCLE 7 (1) HYDERABAD (APPELLANT) (RESPONDENT) AND IT(SS)NO.86/HYD/2003 ASST. YEARS: 1988-99 TO 1999-2000 SHRI. AKULA VENKATI NIZAMABAD (PAN - ABQPA 4743 R) VS. ACIT CIRCLE 7 (1) HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI DAYAKAR FOR SHRI AJAY GANDHI RESPONDENT BY : SMT. VASUNDHARA SINHA SMT. NIVEDITA BISWAS DRS O R D E R PER: CHANDRA POOJARI ACCOUNTANT MEMBER THESE TWO APPEALS PREFERRED BY THE ASSESSEES ARE DIRECTE D AGAINST SEPARATE ORDERS PASSED BY THE CIT(A)-GUNTUR (CA MP AT HYDERABAD) BOTH DATED 31.3.2003 IN THE CONTEXT OF BL OCK ASSESSMENTS MADE UNDER S.158BD OF THE ACT FOR THE BLOCK PERIOD CON SISTING OF ASSESSMENT YEARS 1988-99 TO 1999-2000. SINCE THERE ARE C ERTAIN 2 2 COMMON ISSUES INVOLVED IN BOTH THE APPEALS THEY ARE BE ING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE AKULA SUVARNA RAISED THE FOLLOWING GROUNDS IN HER APPEAL VIZ. IT(SS)A NO. 85/HYD/2003 : 1. THE CIT(A) HAS ERRED IN CONCLUDING THAT U/S 127 THE OPPORTUNITY OF BEING HEARD SHOULD BE GIVEN WHEREVER IT IS POSSIBLE AND IT WAS NOT MANDATORY TO DO SO BEFORE CHANGING JURISDICTION. 2. THE CIT(A) HAS ERRED IN REJECTING THE ASSESSEES SU BMISSION THAT THE ASSESSMENT WAS WITHOUT JURISDICTION. 3. THE CIT(A) HAS ERRED IN IGNORING THE ASSESSEES SUB MISSION THAT THE INCOME WAS ALREADY OFFERED TO TAX EVEN BEFORE THE P ROVISIONS OF CHAPTER XIV B WERE APPLICABLE TO HER. 4. THE CIT(A) HAS ERRED IN IGNORING THE ASSESSEES SUB MISSION THAT THE RETURN WAS FILED VOLUNTARILY AND BEFORE SHE WAS SUB JECT TO THE PROVISIONS OF BLOCK ASSESSMENT THE INCOME OFFERED BY THE ASSESSEE IN THE REGULAR RETURNS SHOULD HAVE BEEN ACCEPTED AND THE ASSESSMENT SHOULD HAVE BEEN DONE BY WAY OF REGULAR ASSESSMENT U/S 143(3) AND NOT U/S 158BC. 5. THE CIT(A) HAS ERRED IN REJECTING THE ASSESSEES SU BMISSION THAT HALF OF THE RENT EARNED IS TO BE TAXED IN THE HANDS OF T HE HUSBAND OF THE ASSESSEE 6. THE CIT(A) HAS ERRED IN IGNORING THE ASSESSEES SUB MISSION THAT SHE IS ENTITLED TO THE STATUTORY DEDUCTION OF REPAIRS OF I NCOME FROM HOUSE PROPERTY. 7. THE CIT(A) HAS ERRED IN REJECTING THE ASSESSEES SU BMISSION THAT THE PROPERTY WAS PURCHASED PRIOR TO THE BLOCK PERIOD. 8. THE CIT(A) HAS ERRED IN REJECTING THE ASSESSEES SU BMISSION THAT THE SOURCE FOR PURCHASE OF PROPERTY WAS BY WAY OF SALE OF JEWELLERY. 9. THE CIT(A) HAS ERRED IN REJECTING THE ASSESSEES SU BMISSION THAT FOR SALE OF JEWELLERY MADE IN SMALL TOWNS MAY NOT BE S UBSTANTIATED BY DOCUMENTARY EVIDENCE. 3. THE ASSESSEE AKULA VENKATI RAISED THE FOLLOWING G ROUNDS IN HIS APPEAL VIZ. IT(SS) NO.86/HYD/2003: 1. THE CIT(A) ERRED IN CONCLUDING THAT U/S 127 THE OPPORTUNITY OF BEING HEARD SHOULD BE GIVEN WHEREVER IT IS POSSIBLE AND IT WAS NOT MANDATORY TO DO SO BEFORE CHANGING JURISDICTION. 3 3 2. THE CIT(A) ERRED IN REJECTING THE ASSESSEES SU BMISSION THAT THE ASSESSMENT WAS WITHOUT JURISDICTION. 3. THE CIT(A) ERRED IN IGNORING THE ASSESSEES SUB MISSION THAT THE INCOME WAS ALREADY OFFERED TO TAX EVEN BEFORE THE P ROVISIONS OF CHAPTER XIV WERE APPLICABLE TO HER. 4. THE CIT(A) ERRED IN IGNORING THE ASSESSEES SUB MISSION THAT THE RETURN WAS FILED VOLUNTARILY AND BEFORE SHE WAS SUB JECT TO THE PROVISIONS OF BLOCK ASSESSMENT THE INCOME OFFERED BY THE ASSESSEE IN THE REGULAR RETURNS SHOULD HAVE BEEN ACCEPTED AND T HE ASSESSMENT SHOULD HAVE BEEN DONE BY WAY OF REGULAR ASSESSMENT U/S 143(3) AND NOT U/S 158BC. 4. DURING THE COURSE OF HEARING THE ASSESSEES COUNSEL HAS ARGUED ONLY THE GROUNDS (1) & (2) IN THE ABOVE TWO A PPEALS AND AS SUCH WE ARE REJECTING THE OTHER GROUNDS VIZ. GROUND N OS.2 TO 9 IN IT(SS)A NO.85/HYD/03 AND GROUNDS NO.3 & 4 IN IT(SS) A NO.86./HYD/03 AS NOT PRESSED. 5. THE MAIN CONTENTIONS OF THE ASSESSEES COUNSEL IN RE LATION TO GROUNDS NO.1 AND 2 ARE THAT THE ISSUE RELATE TO T RANSFER OF FILE U/S 127. THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEES WERE ASSESSED IN THE NORMAL COURSE BY ACIT NIZAMABA D SINCE THEY ARE RESIDENTS OF NIZAMABAD. IMPUGNED BLOCK ASSESSMENT PROCEEDINGS WERE INITIATED BY ISSUANCE OF NOTICE DATED 1 3.10.1999 BY DCIT CIRCLE 3(2) HYDERABAD U/S 158BD AS THE ASSESSEES CASE WAS SAID TO HAVE BEEN NOTIFIED VIDE ORDERS U/S 127(1). THE ASSE SSEES IN RESPONSE TO THE SAID NOTICE VIDE LETTER DATED 25.11.1999 INF ORMED THE DCIT THAT THEIR ASSESSING OFFICER WAS ACIT NIZAMABAD AND THE DOCUME NTS MAY BE TRANSFERRED BACK TO HIM HAVING JURISDICTION OVER THE CASE S OF THE ASSESSEE AND NOTICE U/S 158 BD MAY BE WITHDRAWN. HE SUBM ITTED THAT NO ORDERS U/S 127 WERE PASSED AND THE TRANSFER OF JURISD ICTION TOOK PLACE WITHOUT PASSING ANY ORDERS U/S 127. HE FURTHER SUBMITT ED THAT ESSENTIAL CONDITIONS SO AS TO CONSTITUTE A VALID TRANSFER U/S 127 AND THE ACTUAL 4 4 STATUS AS TO FULFILLMENT OF THOSE CONDITIONS IN THE PRESEN T CASES ARE AS FOLLOWS- ESSENTIAL REQUIREMENTS STATUS OPPORTUNITY FOR HEARING TO BE GIVEN BEFORE EFFECTING TRANSFER NO OPPORTUNITY WAS GIVEN OBJECTIONS BY ASSESSEE WHEN OPPORTUNITY WAS GIVEN NO OPPORTUNITY WAS GIVEN. HOWEVER ASSESSEE OBJECTED TO JURISDICTION ON RECEIPT OF NOTICE U/S 158BD. NO ACTION TAKEN ON THE OBJECTIONS REASONS TO BE SPECIFIC AND BE RECORDED NO SHOW CAUSE NOTICE NO REASONS RECORDED REASONS TO BE COMMUNICATED NO REASONS COMMUNICATED TO BE ASSESSEE AS NO ORDER WAS SERVED SPEAKING ORDER TO BE PASSED NO SPEAKING ORDER WAS PASSED. THE ORDER U/S 127 GIVEN DURING HEARING BEFORE ITAT GIVES A NON SPECIFIC UNSUBSTANTIATED REASONS AS TO FACILITATE DETAILED AND COORDINATED INVESTIGATION ORDER TO BE SERVED NO ORDER WAS SERVED ON THE ASSESSEE. THE ASSESSEE HAS CONSISTENTLY BEEN CLAIMING THAT NO ORDER ITSELF WAS PASSED. A COPY OF THE ORDER U/S 127 WAS GIVEN DURING HEARING BEFORE ITAT FOR THE TIME. THE AR SUBMITTED THAT THE CIT(A) HAS GIVEN SEVERAL REA SONS FOR NOT UPHOLDING THE ASSESSEES OBJECTIONS AS TO JURISDICTION. HE SU BMITTED THAT WHILE THE CIT(A) HAS HELD THAT PROCEDURE U/S 124 (4) IS NOT APPLICABLE TO NOTIFICATIONS U/S 127 THIS OBSERVATION OF THE CIT(A) IS OBVIOUSLY NOT CORRECT SINCE THE PROVISIONS OR S.124(4) AND S.127 ARE VERY CLEAR ON THIS ASPECT AND THERE ARE SEVERAL DECISION S IN SUPPORT OF HIS CONTENTIONS IN THIS BEHALF. HE SUBMITTED THAT WHILE THE CIT(A) OBSERVED THAT THE ASSESSEE HAS NOT ESTABLISHED THAT NO OPP ORTUNITY WAS GIVEN SINCE IT IS THE AFFIRMATION OF THE ASSESSEE THAT N O OPPORTUNITY WAS 5 5 GIVEN IT IS FOR THE DEPARTMENT TO PROVE THAT AN OP PORTUNITY WAS INDEED GIVEN. IN ANY EVENT ASSESSEE CANNOT BE EXPECTED TO ESTA BLISH NEGATIVE FACT. HE PLACED RELIANCE ON THE DECISION OF THE HONBLE B OMBAY HIGH COURT IN THE CASE OF SHANTILAL HIRALAL & CO. (152 ITR 236) (BOM) WHEREIN IT WAS HELD THAT THE ACTUAL SERVICE OF NOTICE AN D OF HEARING MUST BE PROVED BY DEPARTMENT WHICH HAS NOT BEEN DONE IN TH E PRESENT CASE. HE SUBMITTED THAT THE CIT(A) IS COMPETENT TO ADJUDGE J URISDICTION AND LEGALITY OF AN ASSESSMENT. WHEN ASSESSEE DENIES LIABILITY T O TAX CHALLENGES ASSESSMENT THEN THE APPELLATE AUTHORITIES ARE NOT ONLY ENTITLED TO BUT DUTY BOUND CONSIDER THE LEGALITY OF THE ASSESSMENT. HE FURTHER SUBMITTED THAT THE OBSERVATION OF THE CIT(A) THAT PROPER REMEDY FOR THE ASSESSEE IS A WRIT PETITION IS NOT CORRECT AND TH E ASSESSEE IS ENTITLED TO QUESTION LEGALITY OF AN ASSESSMENT DURING A SSESSMENT AND APPELLATE PROCEEDINGS AS WELL. HE SUBMITTED THAT THE ASS ESSEE CAN VERY MUCH DENY THE LIABILITY TO BE TAXED AND WRIT JURISDICT ION IS ONLY AN ALTERNATIVE REMEDY AND NOT THE ONLY ONE AVAILABLE O R POSSIBLE FOR THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ORDER U/S 127 WA S NEVER SERVED ON THE ASSESSEE AND AS SUCH IT WAS NOT POSSIBLE FOR THE ASSESSEE TO FILE A WRIT PETITION IN THE ABSENCE OF AN ORDER W HICH WAS OFFERED FOR THE FIRST TIME ONLY DURING THE APPELLATE PROCEEDINGS B EFORE THE TRIBUNAL. HE SUBMITTED THAT IT IS A FACT THAT NO ORDER U/S 127 WA S SERVED ON THE ASSESSEE. THIS NON-SERVICE OF THE ORDER UNDER S.127 ON TH E ASSESSEE RESULTS IN THAT ORDER NOT COMING INTO EFFECT AND CONSEQUE NTLY NOT GIVING JURISDICTION TO THE OFFICER WHO PASSED THE ORDER. THAT B EING SO IMPUGNED ASSESSMENTS WOULD BE NULLITY. 6. HE FURTHER SUBMITTED THAT NO APPEAL LIES AGAINST AN ORDER U/S 127. IN THE CIRCUMSTANCES ASSESSEES ARE CHALLENGING THE ASSESSM ENTS ONLY AS BEING WITHOUT JURISDICTION TO WHICH THE ASSESSEE S ARE VERY MUCH ENTITLED TO. WHEN THE ASSESSMENTS ARE CHALLENGED ON GROUNDS THAT GO TO THE ROOT OF THE ASSESSMENT IT IS REQUIRED BY THE APPELLATE 6 6 AUTHORITIES TO EXAMINE THE PRESENCE OR ABSENCE OF GOOD A ND LEGAL JURISDICTION AND ADJUDICATE ON THE VALIDITY OF THE ASSESSM ENT. HE ALSO SUBMITTED THAT THE AUTHORITIES FOR VARIOUS REASONS DISCUSSE D ABOVE WHICH INCLUDES ABSENCE OF OPPORTUNITY OF BEING HEARD V ITIATES ORDERS REASONS TO BE SPECIFIC REASONS TO BE COMMUNICATED ORDER TO BE COMMUNICATED FOR BETTER INVESTIGATION ETC. THE TRANSFE R OF JURISDICTION IN THE PRESENT CASES IS NOT LEGAL OR VALID. HE PLACED RELIAN CE ON THE FOLLOWING DECISIONS IN SUPPORT OF THE ABOVE CONTENTIONS. 1. VIJAYASHANTI INVESTMENTS 187 ITR 405. 2. AJANTHA INDUSTRIES VS. CBDT 102 ITR 281 (SC) 3. SAPTAGIRI ENTERPRISES VS. CIT (189 ITR 705) (AP) 4. VIJAYAKUMAR GOWRISHANKAR (283 ITR 524) 5. NITIN DEVELOPERS VS. CIT (284 ITR 605) (DEL.) 6. MUKUTLA LALITA VS. CIT (226 ITR 23) 7. VINAYKUMAR JAISWAL VS. CIT (221 ITR 568) 8. MELCO INDIA (260 ITR 450) (DEL.) 9. ITO VS. MANGILAL NANDKISHORE (40 ITD 538) (JP) 10.ALL INDIA CHILDREN CARE & EDUCATIONAL DEVELOPMENTA L SOCIETY VS. JCIT (87 ITD 209) 10. GENERAL EXPORTERS VS. CIT (234 ITR 860) (MAD.) 11. BANSAL SHAREVESTS SERVICES VS. CIT (283 ITR 332) 12. SHANTILAL HIRALAL & COMPANY (152 ITR 236) (BOM.) 13. POWER CONTROLS VS. CIT (241 ITR 807 (DEL.) 14. RAJESH MAHAJAN VS. CIT (257 ITR 577) (P&H) 6.1. HE FURTHER SUBMITTED THAT THE TRIBUNAL HAS THE POWER TO EXAMINE JURISDICTION IN SPITE OF JUDGEMENT OF THE APEX COURT IN THE CASE 7 7 OF RAI BAHADUR SETH TEOMAL V/S. CIT (36 ITR 9)- SC IT WAS ONLY HELD IN THAT CASE THAT OBJECTIONS AS TO THE PLACE OF ASSESSMENT CAN NOT BE MADE IN AN APPEAL. IT MEANS THAT ONCE THE PLACE OF JURISDICT ION IS DECIDED BY AN AUTHORITY IT CANNOT BE APPEALED AGAINST. THIS DECIS ION DOES NOT COVER CASES WHERE ASSESSMENTS ARE MADE WITHOUT JURISDICTION BEING ACQUIRED LEGALLY. HE ALSO PLACED RELIANCE ON THE FOLLOWING JUDGE MENT OF THE DELHI HIGH COURT IN THE CASE OF KANJIMAL & SONS V/S. CIT (138 ITR 391) (DEL.) WHEREIN IT WAS HELD AT PAGE 404 OF THE REPORTS (138 I TR) AS FOLLOWS- IF AN ASSESSEE FAILS TO RAISE THE OBJECTION BEFORE THE ITO AND WITHIN THE TIME SPECIFIED HE WILL BE SHUT OUT FROM RAISING THE QUESTION ALTOGETHER. WHERE HE RAISED THE QUESTION AND IT IS GOT DECIDED BY THE CIT THAT DECISION WOULD BE FINAL AN D CANNOT BE QUESTIONED IN THE APPELLATE BUT WHERE HE RAISES THE ISSUE BUT THE ITO DOES NOT REFER THE QUESTION TO THE CIT AS IN TH E PRESENT CASE (OR THE CIT OR THE BOARD DOES NOT DECIDE THE QUESTI ON BEFORE THE ASSESSMENT IS COMPLETED) WHAT WILL BE THE RESULT OF THE FAILURE? 6.2. THE HONBLE DELHI HIGH COURT HELD THAT TRIBUNAL CAN CONSIDER THE JURISDICTION ISSUE IN AN APPEAL AGAINST THE ASSESSMENT AND IN THE MATTER BEFORE IT IT OUGHT TO HAVE ANNULLED THE ASSESSM ENT AS BEING WITHOUT JURISDICTION AND OUGHT NOT TO HAVE REMANDED THE MATTER TO THE AAC FOR DISPOSAL AS CLEARLY SEC 124(7)(AS IT STOOD THEN) DID NOT APPLY. THE COURT ALSO HELD THAT A FAILURE TO DO SO WILL RENDER THE ASSESSMENT NULL AND VOID AND WITHOUT JURISDICTION AS HELD IN DI NA NATH HEMRAJ V CIT 2ITC 304 (ALL) WHICH HAS BEEN REFERRED TO AND IN NO WAY DISAPPROVED IN TEOMALS CASE 36 ITR 9 (SC) . HE FURTHER INVITED OUR SPECIFIC ATTENTION TO THE DECISIONS OF THE ALLAHABAD HIGH COURT IN THE CASE S OF CIT V MOHD AYYUB 197 ITR 637 ALL AND ABDUL MAJID V CIT 281 ITR 366 ALL WHEREIN IT HAS BEEN HELD THAT WHEN A PLEA OF JURISDIC TION IS TAKEN BEFORE THE TRIBUNAL IT NOT ONLY HAS THE POWER BUT A STATUT ORY OBLIGATION TO ENTERTAIN THE PLEA AND DECIDE THE SAME. SPECIFIC ATTE NTION IS ALSO INVITED TO THE DECISION OF THE GUWAHATI HIGH COURT IN THE CASE O F 28 ITR 265 (GUWAHATI) WHEREIN IT WAS HELD THAT THE ISSUE OF JURI SDICTION (U/S 124) 8 8 GOING TO THE ROOT OF THE MATTER ITAT CAN LOOK INTO IT AND ADJUDICATE UPON THE SAME. HE SUBMITTED THAT ITAT HAS ALWAYS ENTERT AINED APPEALS CHALLENGING THE ASSESSMENT ON GROUNDS OF JURISDICTION AN D ADJUDICATED UPON THE SAME. SOME CASES WHERE THE TRIBUNAL HAS DONE SO (OTHER THAN THOSE REFERRED TO IN OTHER CONTEXTS IN THIS DOCUMENT) AR E AS FOLLOWS- (A) ACIT VS. PRAGATI CERAMICS (P) LTD. 100 TTJ 167 (B) ACIT VVS.. SAHARA INDDIA (100 ITD 93)-LUCKNOW (C) ZIAULLA SHERIFF V ACIT 7 DT 286 (D) MI BUILDERS (P) LTD. V ITO 115 ITD 419 LUCKNOW (E) RAMESH CHAND V ITO 21 TTJ 460 DELHI WHEREIN IT HAS BEEN HELD THAT ASSESSMENT DONE BY ITO WHO HAD NO JURISDICTION IS A NULLITY 7. HE FURTHER SUBMITTED THAT IT HAS CONSISTENTLY BEEN HELD THAT WHEN AN ASSESSMENT IS DONE BY AN OFFICER WHO HAS NO JURISDI CTION IT RESULTS IN AN ORDER WHICH IS VOID AB INITIO AND A NULL ITY. THE TRIBUNAL HAS ALWAYS ANNULLED IT. HE RELIED ON FOLLOWING PRECEDENT S: 1. ALL INDIA CHILDREN CARE & EDUCATIONAL DEVELOPMENT SO CIETY VS. JCIT 87 ITD 209 2. EMPIRE ESTATE VS. ITO 41 ITD 23 BOM 3. MANAK CHAND AGARWAL VS. ACIT 61 ITD 60 CAL. 4. AMULYA GENERAL TRADING 65 ITD 329 DEL. 5. ITO VS. PRIX SMALL SAVINGS 69 ITD 51 CAL. 6. KANJI MAL & SONS VS. ITO 7 TTJ 222 CAL 7. GURDEV SINGH VS. ITO 86 TTJ CHANDIGARN 8. SATYANARAYANA PREETI VS. ITO 7 ITD 496 HYD. 7.1 HE FURTHER REFERRED TO THE JUDGEMENT OF THE PU NJAB & HARYANA HIGH COURT IN THE CASE OF CHARAN PAL SINGH (307 ITR 132) RELIED UPON BY THE LOWER AUTHORITIES AND SUBMITTED THAT THIS CASE IS 9 9 CLEARLY DISTINGUISHABLE AS THERE WAS A NEXUS WITH THE PL ACE OF TRANSFER AS CLEARLY BROUGHT OUT BY THE COURT. HE FURTHER SUBMITTE D THAT THE DOCUMENTS SEIZED HAVE TO BE HANDED OVER ONLY TO THE ASS ESSING OFFICER HAVING JURISDICTION OVER THE OTHER PERSON AND ONLY TH EN THE ASSESSING OFFICER CAN PROCEED U/S 158BC. HE ALSO SUBMITTED THAT THE ASSESSEE HAS STATED THAT SHE BELIEVES THAT NO ORDER U/S 127 WAS PASSED AND HER JURISDICTION REMAINS WITH THE ITO NIZAMABAD. IN ANY CASE NO ORDER CAN BE PASSED WITHOUT FOLLOWING DUE PROCESS OF SECTION 124 AND AS SUCH THE ORDER IS A NULLITY. AS SUCH THE ITO NIZAMABAD OUGHT TO HAVE PROCEEDED U/S 158 BD AND AS SUCH THE RESULTANT BLOCK ASSESSMENTS IN THE PRESENT CASES ARE BAD IN LAW. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON TH E OTHER HAND SUBMITTED THAT ASSESSEE HAS CLAIMED THAT THE ASSESSMENT WAS MADE WITHOUT JURISDICTION. IN THE COURSE OF THE HEARI NG AND THROUGH SUBMISSIONS IT HAS BEEN ARGUED THAT THE LACK OF JURISDICTIO N AROSE OUT OF THE INVALIDITY OF THE ORDER U/S 127. VARIOUS ARGUMEN TS HAVE BEEN PUT FORTH TO SUPPORT THE VIEW THAT DUE PROCEDURE HAD NOT BEEN FOLLOWED WHILE PASSING THE SECTION 127. SHE FURTHER SUBMITTED THAT IT IS A FACT THAT AN ORDER U/S. 127 HAS BEEN PASSED BY THE CIT AP-I I HYDERABAD ON 1.4.1999. THE ASSESSING OFFICER HAS ISSUED THE NOTICE U/S 1 58BD ON THE STRENGTH OF THIS ORDER U/S 127. A COPY OF THE ORDER WA S PLACED BEFORE THE BENCH AS PER ITS DIRECTIONS. THE AR HAS FAIRLY ADMI TTED IN HIS WRITTEN SUBMISSIONS THAT NO APPEAL LIES AGAINST AN ORDER U/S 127. HOWEVER IT IS CLAIMED THAT THE ASSESSEE IS CHALLENGING THE ASSESSMENT AS BEIN G WITHOUT JURISDICTION AND NOT THE ORDER U/S 127. SHE SU BMITTED THAT BROADLY THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE O RDER UNDER S.127 ARE THAT THE ASSESSEE WAS NOT GIVEN AN OPPORTUNIT Y OF BEING HEARD BEFORE THE ORDER WAS PASSED; THAT NO REASONS WERE RECORDED WHILE PASSING THE ORDER; AND THAT THE ORDER MUST BE SERVED ON THE ASSESSEE AND CONSEQUENTLY DUE TO THESE INFIRMITIES IN THE ORDER U/S 127 THE 10 10 LEGALITY OF THE ASSESSMENT HAS BEEN COMPROMISED. IT IS IMP LICIT IN THIS ARGUMENT THAT THE ASSESSMENT CANNOT BE HELD AS INVALID UN LESS AND UNTIL IT IS FIRST HELD THAT THE ORDER U/S 127 IS INVALID. I N EFFECT THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ORDER U/S 127 IN TH E GARB OF CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER. SHE SUBMITTED THAT ANY DECISION BY ITAT ON THE LEGALITY AND VALIDITY OF THE ORDER U/S 127 WOULD BE BEYOND THE REALM OF ITS OWN JURISDICTION U/S 253. SHE SUBMITTED THAT DISTINCTION MUST BE DRAWN BETWEEN THE PO WER OF THE ITAT TO ENTERTAIN THE APPEAL CHALLENGING THE APPEALS ON GR OUNDS OF JURISDICTION AND TO ENTERTAIN AN APPEAL CHALLENGING VA LIDITY OF THE ACTION WHICH PRECEDED THE ASSESSMENT. HE SUBMITTED THAT TO ENTERTA IN APPEAL CHALLENGING THE ORDER OF JURISDICTION ITSELF THE FIR ST SITUATION REQUIRES AN EXAMINATION WHETHER THE ASSESSEE FALLS WITHIN THE AMBIT OF EXISTING JURISDICTIONAL ORDERS AND WHETHER THE PARTICULAR ASSESSING OFFICER WAS EMPOWERED UNDER THOSE ORDERS TO ACTION. THE SECOND SITUA TION CALLS FOR AN EXAMINATION OF THE VALIDITY AND LEGALITY OF THE JURISDICTIONAL ORDERS THEMSELVES. THERE IS NO DISPUTE THAT THE ITAT DOES HAVE THE AUTHORITY TO EXAMINE THE ISSUE OF JURISDICTION FALLING WITHIN THE FIRST SITUATION. IT IS A SECOND SITUATION WHICH FALLS BEYOND THE SCOPE OF ITS PO WER. SHE SUBMITTED THAT THERE CAN BE NO DOUBT THAT IF THE ORD ER U/S 127 IS HELD TO BE VALID THE JURISDICTION OF THE ASSESSING OFFICER CANNOT B E QUESTIONED. THE JURISDICTION OF THE ASSESSING OFFICER CAN BE QUESTIONED ONLY IF THE ORDER U/S 127 ITSELF IS HELD AS INVALID. THERE IS NO DO UBT THAT THERE WAS AN ORDER U/S 127 PASSED ON 14.9.99. THE ASSESSING OFFICER ASSUMED JURISDICTION UNDER THIS ORDER. THUS THE ASSUMPTION OF JU RISDICTION BY THE ASSESSING OFFICER CANNOT BE FALTERED AND INDEED HAS NOT BE EN FALTERED BY THE ASSESSEE TILL DATE. WHAT HAS BEEN CONTENTED IS THAT THE ORDER U/S 127 DID NOT FOLLOW DUE PROCEDURE AND WAS THUS RENDERED IRREGULAR. SHE SUBMITTED THAT THE DISPUTE THEREFORE IS NOT WHETHE R THE ASSESSING OFFICER HAD BEEN EMPOWERED BY THE ORDER U/S 127 TO ASSU ME JURISDICTION OVER THE ASSESSEE; BUT THE DISPUTE IS WHETHER THERE WAS A VALID U/S 127 11 11 OR NOT. SHE SUBMITTED THAT THE TRIBUNAL HAS ALWAYS ENT ERTAINED APPEALS CHALLENGING THE ASSESSMENT ON GROUNDS OF JURISDICTION AN D ADJUDICATED ON THEM WHETHER ITAT HAS THE COMPETENT TO EXAMINE EXI STENCE OF JURISDICTION IS NOT THE ISSUE IN THIS APPEAL. THE ISSUE IS WHETHER THE ITAT HAS THE COMPETENT TO ADJUDICATE ON THE VALIDITY OF AN ORDER U/S 127. IN PRACTICAL TERMS THE ITAT WOULD HAVE HAD THE COMPETENCE TO ADJUDICATE ON JURISDICTION IF THERE HAD BEEN NO ORDER U/S 127 AT ALL BUT HAS NO COMPETENCE TO ADJUDICATE ON THE VALIDITY OF SUCH AN ORDE R WHERE SUCH AN ORDER EXISTS. SHE SUBMITTED THAT HE HAS RELIED ON CER TAIN CASE LAWS PERTAINING TO SECTION 124 TO CLAIM THAT THE ITAT HAS ON GROUNDS OF FAILURE TO FOLLOWING PROCEDURE U/S 124 STRUCK DOWN ASSESSME NTS AS INVALID OR VOID AB INITIO. AN ASSESSEE IS ENTITLED U/S 1 24 (4) TO QUESTION THE JURISDICTION OF THE ASSESSING OFFICER. IT IS NOTEWOR THY THAT THIS RIGHT OF THE ASSESSEE PERTAINS TO QUESTIONING THE JURISDICTION O F THE ASSESSING OFFICER UNDER THE EXISTING JURISDICTIONAL ORDERS. THIS RIGHT DOES NOT EXTENT TO QUESTIONING THE JURISDICTIONAL ORDER ITSELF. IT IS FOR THIS REASON THAT VARIOUS COURTS INCLUDING ITAT HAVE ENTERTAINED A PPEALS CHALLENGING LACK OF JURISDICTION AND HELD THAT IF THE DUE PROCEDU RE U/S 124 (4) READ WITH 124(2) IS NOT FOLLOWED THE ASSESSMENT IS INVALID . HE SUBMITTED THAT THE SITUATION IS ENTIRELY DIFFERENT WHEN IT COMES TO CHA LLENGING THE VALIDITY OF THE JURISDICTION ORDER ITSELF. SUCH CHALLE NGE IS ENVISAGED IN THE ACT EXCLUSIVELY U/S 127 ITSELF BEFORE THE ORDER IS PA SSED AND BEFORE THE HIGH COURT AFTER THE ORDER IS PASSED. REFERRING SPECIFICALLY TO THE FOLLOWING CASE LAWS RELIED ON BY THE ASSESSEE IN SUPPORT OF THE CONTENTION IS THAT ITAT DOES HAVE JURISDICTION TO EXAMIN E THE ISSUE OF JURISDICTION IN THE ASSESSEES CASE HE PUT FORTH ELABORATE REASONS WHY THESE CASE LAWS ARE NOT APPLICABLE TO THE FACTS OF THE ASSE SSEES CASE WHICH ARE SUMMARIZED HEREUNDER 1) RAIBAHADUR SETH TEOMAL VS. CIT (36 ITR 9 )(SC) 2) ABDUL MAZID VS. CIT (281 ITR 366) ALL 12 12 3) SATYANARAYAN PEETI VS. ITO (7 ITD 496) (HYD.) 4) ALL INDIA CHILDREN CARE AND EDUCATIONAL DEVELOPMENT SO CIETY VS. JCIT (87 ITD 209) (ALL) 5) MI BUILDINGS (P) LTD. VS. ITO (115 ITD 419) (LUCKNOW) 6) ZIAULLAH SHERIFF VS. ACIT (7 DTR 286) (BANGALORE) 7) MANK CHAND AGRAWAL VS. ACIT (4 DTR (JP) (TRB) 584) 8) ITO VS. GURUDEV SINGH (86 TTJ (CHD.) 861) 9) KANJIMAL & SONS VS. CIT 138 ITR 391 (DEL) 10) CLIFTONS PEARSON EXPORTS & AGENCIES LTD. VS. ACIT 11) 61 ITD 60 (CAL) 12) AMULYA GENERAL TRADING & AGENCIES LTD. VS. AC IT(65 ITD 329) (DEL) 13) ITO VS. PRIXSMALL SAVINGS & INVESTMENTS LTD.(69 ITD 51) (CAL.) 14)ACIT VS. PRAGATI CERAMICS (P) LTD. TTJ (NAG. ) 167 14) RAMESH CHAND VS. ITO (21 TTJ (DEL) 460) 15) ITO VS. KANJIMAL & SONS (7 TTJ (DEL) 222) 8.1. SHE SUBMITTED THAT THE DECISIONS IN THE CASES AT S. NO. 10 TO 15 ABOVE PERTAIN TO VALIDITY OF TWO SIMULTANEOUS ASSESSM ENTS WHETHER THE PROCEDURE U/S 124 HAD BEEN FOLLOWED AND WHETHER SE C. 124(7) WAS APPLICABLE. AS SUBMITTED IN PARA 9 ABOVE SEC. 124 PERMI TS CHALLENGING OF ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER UNDE R EXISTING JURISDICTION ORDERS; BUT IT DOES NOT ENVISAGE A CHALLENGE TO THE JURISDICTION ORDERS THEMSELVES. THESE CASE LAWS ARE THEREFO RE NOT RELEVANT TO THE ASSESSEES CASE SINE WHAT IS UNDER CHALLENGE HERE IS NOT WHETHER THE ASSESSEES CASE WAS COVERED BY THE ORDER U/S 127 BUT WHETHER THE ORDER ITSELF WAS VALID OR NOT. SHE SUBMIT TED THAT IT MAY BE 13 13 NOTED THAT ALL DECISIONS ON VALIDITY OF THE ORDERS U/S 1 27 HAVE BEEN ADJUDICATED UPON AND RENDERED BY HIGH COURTS IN WRIT P ETITIONS AND NOT IN APPEALS ARISING OUT OF ITAT ORDERS. SHE SUBMITTED T HAT ARGUMENT OF THE THAT LEARNED AR THAT THE ORDER U/S 127 WAS NEVER SERVED ON THE ASSESSEE AND THAT IT WAS NOT POSSIBLE FOR THEM TO FILE WR IT PETITION IN THE ABSENCE OF AN ORDER WHICH WAS OFFERED FOR THE FIRST TIME DURING HEARING BEFORE THE TRIBUNAL IS NOT CORRECT. AS IT IS VERY CLE AR FROM THE ORDER DATED 31.03.2003 OF THE CIT(A) THAT THE ASSESSEE WAS AWA RE OR MADE AWARE OF THE ORDER U/S 127 IN THE COURSE OF THE APPEAL PROCEEDINGS. THE ASSESSEE FOR HER OWN REASONS CHOSE NOT TO FILE A WRIT PETI TION BEFORE THE HIGH COURT. SHE FURTHER SUBMITTED THAT EVEN OTHERWI SE THE ASSESSEES INABILITY TO FILE A WRIT PETITION SO FAR OR THE INCO NVENIENCE THAT MAY HAVE BEEN CAUSED BY A LONG DRAWN OUT LEGAL PROCEDURE IN THE APPEAL OR OTHER SUCH CONSIDERATIONS CANNOT CONFER ON THE ASSESSEE THE RIGHT T O AGITATE ON THE ISSUES BEFORE THE ITAT WHICH IS NOT WITHIN THE JU RISDICTION OF THE ITAT UNDER SEC. 253. SHE PROCEEDED TO MAKE THE FOLLO WING SUBMISSIONS WITHOUT PREJUDICE TO THE ABOVE TO SHOW THAT THE ORD ER U/S 127 IS LEGALLY VALID: 9. THE DR PLACED RELIANCE ON THE ARGUMENTS OF THE CI T(A) IN SUPPORT OF THE ORDER U/S 127 WHICH PROVIDES FOR AN OPP ORTUNITY TO BE GIVEN WHEREVER IT IS POSSIBLE AND THE WORDS USED IN TH E ACT IS MAY. SHE SUBMITTED THAT SPECIFIC REASONS HAVE BEEN RECORDED IN THE ORDER U/S 127 AND THE SUFFICIENCY OF SUCH REASONS HAS BEEN UPHELD BY THE COURTS AS HELD IN CHARANPAL SINGH VS. ITO 307 ITR (P & H). I T IS ALSO SUBMITTED THAT IT HAS BEEN HELD BY VARIOUS COURTS AND BENCHES OF THE TRIBUNAL THAT LACK OF OPPORTUNITY MAKES AN ORDER IRREGULAR BUT NOT ILLEGAL AND SUCH IRREGULARITY CAN BE CURED. SHE PLACED RELIANCE ON THE FOLLOWING JUDGMENTS: 1. CIT VS. DAMODARDAS MURARILAL (222 ITR 401) 14 14 2. CIT VS. SMT. PUSHPA DEVI (250 ITR 495). 9.1. SHE SUBMITTED THAT IN THE INSTANT CASE IF AT A LL THERE IS ANY IRREGULARITY ARISING OUT OF THE ALLEGED ABSENCE OF DU E OPPORTUNITY TO THE ASSESSEE IT CAN BE CURED; SUCH IRREGULARITY CANNOT BE A BASI S FOR ANNULLING THE ASSESSMENT. SHE SUBMITTED THAT THE BENCH HAD DIRECTED THAT COPY OF THE ACKNOWLEDGEMENT OF SERVICE OF ORDER U /S 127 MAY BE PLACED BEFORE IT. WITHOUT PREJUDICE TO THE SUBMISSIONS MADE EARLIER REGARDING THE RELEVANCE OF THIS DOCUMENT IN THE PRESENT PROCEEDINGS AND THE COMPETENCE OF THE ITAT TO EXAMINE THE VALIDITY OF THE ORDER U/S 127 THE ASSESSING OFFICER HAS SUBMITTED THAT THE ACKNOWLEDG EMENT COULD NOT BE READILY TRACED AND HAS SOUGHT FURTHER TI ME FOR SUBMISSION OF THE ACKNOWLEDGEMENT. IN VIEW OF THE ABOVE SUBMISSIO NS REGARDING THE POSITION IN LAW AS PER ABOVE SUBMISSIONS IT IS PRAYE D THAT THE ASSESSEES GROUNDS OF APPEAL NOS. 1 AND 2 MAY BE REJECTED. THE DR ALSO SUBMITTED THAT THE AR HAS FILED WRITTEN RESPONSE IN RESP ONSE TO DEPARTMENTAL SUBMISSIONS ON 7.12.2009 IN WHICH THE AR HAS REFERRED TO THE OBSERVATION OF THE DR THAT THE ASSESSEE HAD BEEN MAD E AWARE OF THE ORDER U/S 127 IN THE COURSE OF THE APPEAL PROCEEDIN GS AND CONCLUDED THAT THE DEPARTMENT HAS ACCEPTED THAT THE ORDER WAS NOT SERVED ON THE ASSESSEE. THE REFERRED OBSERVATION IT WAS SUBMITTED HAD BEEN MADE IN THE CONTEXT OF THE ASSESSEES CLAIM THAT IT WAS NOT POSSIBLE FOR THE ASSESSEES TO FILE A WRIT PETITION IN THE ABSENCE OF THE O RDER WHICH WAS OFFERED FOR THE FIRST TIME DURING HEARING BEFORE THE TRIBUNAL. THE AR HAS NOT COUNTERED THE FACTUAL CORRECTNESS OF THE OBSERVATION T HAT THE ASSESSEE HAD BEEN MADE AWARE OF THE ORDER U/S 127 AT LEA ST DURING THE APPEAL PROCEEDINGS BEFORE THE CIT(A). SHE HAS ALSO NO T OFFERED ANY EXPLANATION WHY THE ASSESSEE HAVING BEEN MADE AWARE OF THE ORDER U/S 127 DURING THE FIRST APPEAL PROCEEDINGS THEN CHOSE NOT TO FILE A WRIT PETITION. THE DR SUBMITTED THAT IT IS AFFIRMED THAT THE OBSERVATION CITED BY THE AR IS NOT AN ADMISSION THAT THE ORDER U/S 127 WA S NOT SERVED 15 15 BEFORE THE ASSESSMENT PROCEEDINGS. THE OBSERVATION IS TO B E READ IN THE LIMITED CONTEXT AS EXPLAINED ABOVE. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E RECORDS. S.127 OF THE ACT READS AS FOLLOWS- '127. POWER TO TRANSFER CASES. (1) THE DIRECTOR GENERAL OR CHIEF COMMISSIONER OR CO MMISSIONER MAY AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF B EING HEARD IN THE MATTER WHEREVER IT IS POSSIBLE TO DO SO AND AFTER RE CORDING HIS REASONS FOR DOING SO TRANSFER ANY CASE FROM ONE OR MORE ASSES SING OFFICERS SUBORDINATE TO HIM (WHETHER WITH OR WITHOUT CONCURRE NT JURISDICTION) TO ANY OTHER ASSESSING OFFICER OR ASSESSING OFFICERS (W HETHER WITH OR WITHOUT CONCURRENT JURISDICTION) ALSO SUBORDINATE TO HIM. (2) WHERE THE ASSESSING OFFICER OR ASSESSING OFFICE RS FROM WHOM THE CASE IS TO BE TRANSFERRED AND THE ASSESSING OFFICER O R ASSESSING OFFICERS TO WHOM THE CASE IS TO BE TRANSFERRED ARE NOT SUBORDI NATE TO THE SAME DIRECTOR GENERAL OR CHIEF COMMISSIONER OR COMMISSION ER - (A) WHERE THE DIRECTORS GENERAL OR CHIEF COMMISSIONER S OR COMMISSIONERS TO WHOM SUCH ASSESSING OFFICERS ARE SU BORDINATE ARE IN AGREEMENT THEN THE DIRECTOR GENERAL OR CHIEF COMMISSIONER OR COMMISSIONER FROM WHOSE JURISDICTIO N THE CASE IS TO BE TRANSFERRED MAY AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD IN THE MATTER WHEREVER IT IS POSSIBLE TO DO SO AND AFTER RECORDING HIS REASONS FOR DOING S O PASS THE ORDER; (B) WHERE THE DIRECTORS GENERAL OR CHIEF COMMISSIONE RS OR COMMISSIONERS AFORESAID ARE NOT IN AGREEMENT THE ORDE R TRANSFERRING THE CASE MAY SIMILARLY BE PASSED BY THE BOARD OR ANY SUCH DIRECTOR GENERAL OR CHIEF COMMISSIONER OR COMMISSIONER AS THE BOARD MAY BY NOTIFICATION IN THE O FFICIAL GAZETTE AUTHORISE IN THIS BEHALF. (3) NOTHING IN SUB-SECTION (1) OR SUB-SECTION(2) SH ALL BE DEEMED TO REQUIRE ANY SUCH OPPORTUNITY TO BE GIVEN WHERE THE T RANSFER IS FROM ANY ASSESSING OFFICER OR ASSESSING OFFICERS (WHETHER WI TH OR WITHOUT CONCURRENT JURISDICTION) TO ANY OTHER ASSESSING OFF ICER OR ASSESSING OFFICERS (WHETHER WITH OR WITHOUT CONCURRENT JURISD ICTION) AND THE OFFICES OF ALL SUCH OFFICERS ARE SITUATED IN THE SAME CITY LOCALITY OR PLACE. (4) THE TRANSFER OF A CASE UNDER SUB-SECTION(1) OR SU B-SECTION(2) MAY BE MADE AT ANY STAGE OF THE PROCEEDINGS AND SHALL NOT RENDER NECESSARY THE RE-ISSUE OF ANY NOTICE ALREADY ISSUED BY THE ASSE SSING OFFICER OR ASSESSING OFFICERS FROM WHOM THE CASE IS TRANSFERRED. EXPLANATION.-IN SECTION 120 AND THIS SECTION THE WORD 'CASE' IN RELATION TO ANY PERSON WHOSE NAME IS SPECIFIED IN ANY ORDER O R DIRECTION ISSUED THEREUNDER MEANS ALL PROCEEDINGS UNDER THIS ACT IN RESPECT OF ANY YEAR WHICH MAY BE PENDING ON THE DATE OF SUCH ORDER OR DIR ECTION OR WHICH MAY HAVE BEEN COMPLETED ON OR BEFORE SUCH DATE AND INC LUDES ALSO ALL 16 16 PROCEEDINGS UNDER THIS ACT WHICH MAY BE COMMENCED AFT ER THE DATE OF SUCH ORDER OR DIRECTION IN RESPECT OF ANY YEAR.' 10.1 THE PROVISIONS OF S.127(2) OF THE ACT ARE RELEVA NT INSOFAR AS THE ASSESSEES HEREIN ARE CONCERNED AS THE CASE RECORDS WERE TRANSFERRED FROM THE JURISDICTION OF ACIT NIZAMABAD TO DCIT CENTRAL CIRCLE HYDERABAD. CLAUSE (A) TO S.127(2) OF THE ACT CA TEGORICALLY SAYS THAT AFTER GIVING AN ASSESSEE A REASONABLE OPPORTUNITY OF BE ING HEARD IN THE MATTER AND AFTER RECORDING HIS REASONS FOR DOING SO PASS THE ORDER . THE COMMISSIONER HAVING JURISDICTION OVER ACIT NIZ AMABAD UNDER WHOSE JURISDICTION ASSESSEES WERE BEING ASSESSED BEFORE TRANSFERRING THE CASE RECORDS WAS REQUIRED TO GIVE REA SONABLE OPPORTUNITY OF HEARING TO THE ASSESSEES IN THE MATTER I .E. THE MATTER OF TRANSFER OF RECORDS. THE RIDER IN THE SAID PROVISION IS WHEREVER IT IS POSSIBLE TO DO SO . IN THE FACTS OF THE PRESENT CASES THE ASSESSEES ARE SITUATED AT NIZAMABAD AND THE COMMISSIONER TRANSFERRING RECORDS IS AT HYDERABAD. NO REASONS HAVE BEEN BROUGHT ON RECORD TO P ROVE THAT IT WAS NOT POSSIBLE TO AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE OPPORTUNITY OF HARING IS NOT OPPORTUNITY SIMPLICITOR BUT REASONABLE OPPORTUNITY OF HEARING THOUGH IT IS THE D ISCRETION OF THE OFFICER TO GIVE SUCH OPPORTUNITY AS THE TERM USED IS MAY IN CONJECTURE WITH WHEREVER IT IS POSSIBLE TO DO SO . THE PROVISIONS OF S.127(2) FURTHER PROVIDE THAT THE DG/CCIT/CIT SHALL AFTER R ECORDING THE REASONS FOR TRANSFER PASS ORDERS. IT IS A COROLLARY THAT WHEREV ER REASONABLE OPPORTUNITY IS TO BE GIVEN AND ORDERS ARE PASSED AFTER RECORDING REASONS FOR DOING SO THE SAME IS TO BE COMMUNICATED TO THE ASSESSEE S. AN ORDER PASSED AGAINST ANY PERSON IS NOT ONLY TO BE CONSIGN ED TO FILE BUT ALSO TO BE COMMUNICATED TO THE RESPECTIVE PARTIES WHO AR E AFFECTED BY SUCH ORDERS. THE CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS TRIED TO CALL FOR THE FILE OF THE COMMISSIONER AP-II HYDERABAD WHO NOTIFIED THE CASES OF THE APPELLANTS UNDER S.127 BUT CO ULD NOT OBTAIN 17 17 DETAILS OF OPPORTUNITIES GIVEN TO THE ASSESSEES AND IT IS NOT EVEN ESTABLISHED THAT SUCH AN OPPORTUNITY WAS NOT GIVEN. 11. THEIR LORDSHIPS OF HONBLE SUPREME COURT IN THE CA SE OF AJANTHA INDUSTRIES(SUPRA) HELD AS UNDER- 'WE ARE CLEARLY OF OPINION THAT THE REQUIREMENT OF RECORDING REASONS UNDER S.(1) IS A MANDATORY DIRECTION UNDER THE LAW AND NON- COMMUNICATION THEREOF IS NOT SERVED BY SHOWING THAT THE REASONS EXIST IN THE FILE ALTHOUGH NOT COMMUNICATED TO THE ASSESS EE. THUS NOT ONLY THE REASONS ARE TO BE RECORDED PRIOR TO T RANSFER OF RECORDS BUT ALSO COMMUNICATED TO THE PERSON CONCERNED. MERE RECO RDING OF REASONS WITHOUT COMMUNICATING THE SAME TO THE CONCERNED PERSON IS AGAINST THE PROVISIONS OF S.127 OF THE ACT. 12. THE QUESTION FOR FURTHER ADJUDICATION BEFORE US I S WHETHER ANY APPEAL IS PROVIDED AGAINST THE ORDER UNDER S.127 OF THE ACT. THE ASSESSEE HAS RAISED THE ISSUE OF EXISTING OF JURISDICTION IN THE ACIT NIZAMABAD ON TRANSFER OF RECORDS FROM THE ACIT NIZAMA BAD. THE VESTING OF JURISDICTION IS PURSUANT TO THE ORDER PASSED UNDER S .127 OF THE ACT AND THE QUESTION OF MAINTAINABILITY OF APPEAL AGAINS T THE ORDER OF TRANSFER UNDER S.127 IS TO BE DECIDED BEFORE GOING INT O THE QUESTION OF VESTING OF JURISDICTION IN THE ASSESSING OFFICER AT HYDERABA D. THEIR LORDSHIPS OF HONBLE SUPREME COURT IN AJANTHA INDUSTRI ES CASE (SUPRA) HAD HELD ON THIS ASPECT AS UNDER- 'THE REASON FOR RECORDING OF REASONS IN THE ORDER A ND MAKING THESE REASONS KNOWN TO THE ASSESSEE IS TO ENABLE AN OPPORTUNITY TO THE ASSESSEE TO APPROACH THE HIGH COURT UNDER IT S WRIT JURISDICTION UNDER ARTICLE 226 OF THE CONSTITUTION OR EVEN THIS COURT UNDER ARTICLE 136 OF THE CONSTITUTION IN AN A PPROPRIATE CASE FOR CHALLENGING THE ORDER INTER ALIA EITHER ON TH E GROUND THAT IT IS MALA FIDE OR ARBITRARY OR THAT IT IS BASED ON IR RELEVANT AND EXTRANEOUS CONSIDERATIONS. WHETHER SUCH A WRIT OR S PECIAL LEAVE APPLICATION ULTIMATELY FAILS IS NOT RELEVANT FOR A DECISION OF THE QUESTION.' 18 18 13. THE CHANDIGARH BENCH OF TRIBUNAL IN THE CASE OF R EMAOL DASS V/S. ACIT (53 TTJ 111) HAD HELD AS UNDER- THE HIGH COURTS AND SUPREME COURT UNDER THE WRIT JURISDICTION MAY STRIKE DOWN AN ORDER BUT NO APPEAL IS PASSED BY THE BOARD OR THE CIT UNDER S.127 OF THE ACT. 14. FURTHER IN THE CASE OF DGP HINODAY INDUSTRIES LTD. V/S. DCIT (13 SOT 733)(MUM) IT WAS HELD THAT AS NO APPEAL IS PROVIDED AGAINST AN ORDER UNDER S.127(2) THE TRIBUNAL CANNOT ENTERTAIN THE ISSUE OF VESTING OF JURISDICTION IN ANOTHER ASSESSING OFFICER BY ORDER UNDER S.127(2). 15. FURTHER WE MAKE IT CLEAR THAT THE VALIDITY OF THE ORDER UNDER S.127 HAVE BEEN ADJUDICATED BY HIGHER COURTS IN WRIT P ETITIONS AND NOT IN APPEALS ARISING OUT OF THE ORDERS OF THE TRIBUNAL AND AS SUCH IN OUR HUMBLE OPINION THE RATIO LAID DOWN BY THE HIGH COURT S IN THE CASES RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE CANNOT BE APPLIED BY US IN THE PRESENT CASES. 16. IN THE LIGHT OF THE ABOVE DISCUSSION RESPECTFULLY FOLLOWING SETTLED POSITION OF LAW LAID DOWN BY THE APEX COURT I N THE CASE OF AJANTHA INDUSTRIES (SUPRA) AND IN OTHER CASES DISCUSSED ABOV E IN OUR OPINION AS NO APPEAL IS PROVIDED AGAINST A TRANSFER OR DER MADE UNDER S.127 OF THE ACT THIS TRIBUNAL CANNOT GO INTO THE ISSU E OF VALIDITY OR LEGALITY OF THE TRANSFER OF RECORDS FROM ACIT NIZAMBAD TO ACIT (3)(2) HYDERABAD. THE REMEDY IN THE MATTER LIES UNDER THE WR IT JURISDICTION BEFORE THE RESPECTIVE HIGH COURT AND/OR SUPREME COURT. CONSEQUENTLY WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE ASSESSEES IN THIS BEHALF. 19 19 17. IN THE RESULT APPEALS OF THE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON : 29 .1.201 0 SD/- SD/- (N.R.S. GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 29 TH JANUARY 2010 COPY FORWARDED TO: 1. SMT. AKULA SUVARNA (NIZAMABAD) C/O. M/S GANDHI & GANDHI CA 1002 PAIGAH PLAZA BASHEERBAGH HYDERABAD 2. SMT. AKULA VENKATI (NIZAMABAD) C/O. M/S GANDHI & GANDHI CA 1002 PAIGAH PLAZA BASHEERBAGH HYDERABAD 2. ACIT CIRCLE 7 (1) NIZAMABAD 3. CIT(A)GUNTUR (CAMP) HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP