Notice Quashed as Statutory Transfer Order Overrides ITBA System’s PAN Jurisdiction.

By | November 10, 2025
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Notice Quashed as Statutory Transfer Order Overrides ITBA System’s PAN Jurisdiction.

Issue

Whether a reassessment notice issued by an Assessing Officer (AO) is valid if that AO’s jurisdiction is based only on the PAN details reflected in the ITBA system, even though a formal statutory order under Section 127 of the Income-tax Act had previously transferred the case jurisdiction to a different officer?

Facts

  • The assessee-company’s jurisdiction was formally transferred from Ahmedabad to Bhavnagar by a statutory order under Section 127 on October 25, 2016.
  • The assessee’s subsequent assessments were completed in Bhavnagar, and it filed its return for AY 2017-18 with the Bhavnagar AO.
  • On March 30, 2021, the original AO in Ahmedabad (ITO Ward 1(1)(3)) issued a reassessment notice under Section 148 for AY 2017-18.
  • The Ahmedabad AO rejected the assessee’s objection, claiming he had jurisdiction because the assessee’s PAN was reflected in the ITBA system as being under his ward.
  • The assessee contended that the system’s database (ITBA) could not override a formal, un-superseded statutory transfer order.

Decision

  • The High Court ruled decisively in favour of the assessee.
  • It held that the impugned notice issued by the Ahmedabad AO was without jurisdiction and therefore illegal.
  • The court affirmed that the statutory transfer order under Section 127 is definitive and remains in force until a fresh order is passed to modify it.
  • The jurisdiction merely reflected in the ITBA system, which may be based on old PAN data, cannot confer or override the legal jurisdiction established by the Section 127 order.
  • Consequently, the notice under Section 148 and the order disposing of the assessee’s objections were quashed.

Key Takeaways

  • Statutory Order > System Database: A formal, statutory order (like a Section 127 transfer) has superior legal force over an administrative database (like ITBA).
  • ITBA is a Tool, Not the Law: The ITBA system is a processing and administrative tool; it does not, by itself, confer or override statutory jurisdiction.
  • Jurisdiction is a Foundation: A notice issued by an officer who lacks valid jurisdiction is void ab initio (invalid from the beginning) and cannot be the basis for a valid assessment.
  • Section 127 Orders are Enduring: Once a case is transferred under Section 127, it remains with the new AO for all purposes (including future reassessments) until a new, subsequent transfer order is passed.
HIGH COURT OF GUJARAT
Diamond tmt and Procon (P.) Ltd.
v.
Income-tax Officer
BHARGAV D. KARIA and Pranav Trivedi, JJ.
R/SPECIAL CIVIL APPL. NO. 5370 of 2022
SEPTEMBER  16, 2025
B S Soparkar, Adv. for the Petitioner. Varun K.Patel, Adv. for the Respondent.
JUDGMENT
Bhargav D. Karia, J.- Heard learned advocate Mr. B.S. Soparkar for the petitioner and learned Senior Standing Counsel Mr. Varun K. Patel for the respondents.
2. Having regard to the controversy in a narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing.
3. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Varun K. Patel waives service of notice of rule on behalf of the respondents.
4. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 30.03.2021 issued under Section 148 of the Income Tax Act, 1961 (For Short “the Act”) for the Assessment Year 2017-18 on the ground that the respondent Assessing Officer, Ward 1(1)(3), Ahmedabad has no jurisdiction to issue the notice as the jurisdiction of the petitioner lies with the Assessing Officer, Bhavnagar, in addition to their challenge to the merits of the notice.
5. The brief facts of the case are as under :
5.1. The petitioner filed return of income for Assessment Year 2017-18 at Bhavnagar on 28.09.2017 declaring loss of Rs.1,47,53,889/-. The respondent no. 1 Income Tax Officer, Ward 1(1)(3), Ahmedabad issued the impugned notice dated 30.03.2021 calling upon the petitioner to file the return of income for Assessment Year 2017-18 under Section 148 of the Act. The petitioner without prejudice filed its return in compliance to the said notice on 22.04.2021 and sought for reasons recorded for reopening which were provided by the respondent no. 1 on 10.06.2021.
5.2. The petitioner thereafter filed the preliminary objection on 02.08.2021 challenging the validity of the impugned notice raising the objection that as per provisions of Section 124 of the Act, the business of the petitioner is carried out at Bhavnagar and the impugned notice was issued by the respondent no. 1 at Ahmedabad showing the address of the petitioner at Bhavnagar. It was also pointed out that the impugned notice was followed by the notice under Section 143(2) read with Section 147 of the Act dated 18.06.2021 issued by the respondent no. 1 situated at Ahmedabad though the petitioner has no office, factory or place of business in Ahmedabad or in Ahmedabad District and, therefore, the respondent no. 1 has no jurisdiction or authority to issue the notice for reopening of the assessment for the year under consideration.
5.3. The respondent no. 1 by order dated 28.02.2022 communicated on 01.03.2022 disposed of the preliminary objection of the petitioner by stating that the PAN of the petitioner was in Ahmedabad till 08.11.2019 and thereafter the PAN was in Bhavnagar from 08.11.2019 to 13.10.2020 and from 13.10.2020 onwards the PAN is in Ahmedabad and reopening process like getting approval from the competent authority, issuance of the notice etc. to be done in system only which is PAN based and where the PAN is there, the officer only can initiate reopening proceedings and issue notice under Section 148 of the Act. Being aggrieved, the petitioner has preferred this petition.
6. Learned advocate Mr. B.S. Soparkar for the petitioner submitted that the jurisdiction of the Assessing Officer was transferred from Ahmedabad to Bhavnagar in the year 2016 and the Assessment Orders for Assessment Year 2013-14, Assessment Year 2014-15 and Assessment Year 2015-16 were passed on 20.01.2016, 13.12.2016 and 24.11.2017 respectively by the Income Tax Officer, Bhavnagar. Learned advocate Mr. Soparkar invited attention of the Court of such Assessment Orders placed on record from page 201 to 211 of the paper book. It was, therefore further submitted that there is no order passed under Section 127 of the Act placed on record by the respondent to show that the jurisdiction of the petitioner was transferred from Bhavnagar to Ahmedabad after 2016. It was submitted that as per order under Section 127 of the Act dated 25.10.2016 (page 227 of the paper book) placed on record by the respondent no. 1 along with further affidavit-in-reply affirmed on 05.08.2025, and the transfer memo dated 28.10.2016 the case records are transferred from Ahmedabad to Bhavnagar.
6.1. It was therefore submitted that the reliance placed by the respondent on the screenshot showing the PAN jurisdiction in the ITBA (Income Tax Business Application) portal is of no consequence in absence of the order passed under Section 127 of the Act by the competent authority. It was, therefore, submitted that in view of such undisputed fact, the petition is required to be allowed as the impugned notice and the order disposing of the objections are without jurisdiction. It was submitted that in alternative also the petitioner has a very good case on merits as the reasons recorded for reopening are pertaining to the entities with which the petitioner has never dealt with and, therefore, there is no information available on record which shows that there is escapement of income so as to reopen the assessment for the year under consideration.
7. Per contra, learned Senior Standing Counsel Mr. Varun K. Patel for the respondents referred to and relied upon the first affidavit affirmed on 19.01.2025 on behalf of the respondent no. 1 wherein it is contended as under :-
“5. With reference to para 3.2, the respondent denies each and every allegation, averment and/or contention raised in this para. In support, the PAN Jurisdiction sheet extracted from the ITBA portal of the Income Tax Department is annexed as per Annexure-R1. It can be seen from the Jurisdiction sheet that the system generated Transfer order number with date are available on it. In view of the above fact, the plea of the assessee company is factually incorrect.
As the jurisdiction over the PAN of the assessee company was with Pr. Commissioner of Income-Tax-1, Ahmedabad, the reopening process like getting approval from competent authority, issuance of notice etc. is to be done through the system, which is PAN based. Therefore, where the PAN is active, that officer can only initiate reopening proceedings and issue notice under Section 148 of the Act.
It is further submitted that at the time of initiation of reopening proceedings the PAN was active with ITO, Ward-1(1)(3), Ahmedabad and therefore the officer who issued notice under Section 148 is having rightful jurisdiction over the assessee company.
6. With reference to para 3.3 to 3.7, the respondent denies each and every allegation, averment and/or contention raised in this para. It is submitted that on examination of the information received on Insight Portal, it is seen that M/s. Diamond TMT & Procon Pvt. Ltd., was entered into the transactions of Rs.1,59,50,000/- with Shripal Vora. n the information it wins informed that a search action was 132 of the Act on 16.12.2016. The Investigation wing is carried out on Shri Sripal V Vora, S Vora & Associates u/s integral part of the Income Tax department who is specialized unit and involved in unearthing the modus operandi of tax evasion. While reopening the case of the assessee company, the then AO had mentioned the facts related to the case of assessee company and also mentioned its opinion in Para-2 to 4 of reason recorded before reopening of the case of the assessee. The same is available as Annexure-C of the petition. The reasoning of the AO is available at page- 18 to 26 of said Annexure-C. The then AO has reason to belief for escapement of income which is sufficient for reopening of the case. On the basis of the information it was opined the statement of Shri Shripal Vora u/s 131/132(4) of the IT Act, the evidence found and seized during the course of the search in the form of cash receipts, are merely accommodation entries and not the genuine one. The same was an unaccounted fund of M/s. Globe 200 Sourcing Pvt. Ltd which has been routed back to M/s. Globe 200 Sourcing Pvt. Ltd in the form of unsecured loans and the Surat based entities were being used as a conduit only. Therefore, the reason assigned while issuing notice and order under Section 148 are just and proper. Annexed hereto and marked as Annexure-R/2 is a copy of information along with documents available to the assessing officer on the insight portal in the present case.”
7.1 From the above averments it was submitted that the respondent no. 1 had assumed the jurisdiction on the basis of the information relating to the PAN jurisdiction available in the system. Learned Senior Standing Counsel Mr. Patel invited the attention of the Court to the Annexure-R1 (page 62 of the paper book to demonstrate that after 2020, the PAN jurisdiction is with the respondent no 1. It was submitted that the jurisdiction was transferred from Ward 1(1)(4), Ahmedabad to Ward 2(1) Bhavnagar on 08.11.2019 by transfer order ending with 16109 and thereafter the jurisdiction was transferred from Ward 1(1) (4), Ahmedabad to Ward 1(1)(3) Ahmedabad on 13.10.2020 by transfer order ending with 46063 and thereafter again the PAN jurisdiction was transferred from Ward 1(1)(3) Ahmedabad to Circle (1) Bhavnagar on 13.03.2024 for transfer order ending with 06117. It was therefore submitted that when the respondent no.1 issued the impugned notice, the PAN jurisdiction was available as per the system and therefore, the impugned notice is issued by exercising the rightful jurisdiction by the respondent no. 1.
7.2. Learned Senior Standing Counsel Mr. Patel thereafter referred to the affidavit-in-reply affirmed on 04.07.2025 wherein the Assistant Commissioner Income Tax, Circle (1) Bhavnagar has stated as under :-
“2. It is submitted that the present affidavit is filed for producing the following details pursuant to the order dated 23.06.2025 passed by this Hon’ble Court in the present petition. Regarding the Transfer Order No. 2000000016109 dated 08.11.2019 transferring PAN AANCS9634E of the petitioner-assessee from ITO ward (1)(1)(4), Ahmedabad to ITO ward -2(1) Bhavnagar, it is submitted that a ticket bearing number 2932795 has been raised with ITBA through system on 26.06.2025 to enquire about the facts related to transfer order No.2000000016109 dated 08.11.2019 by which the PAN of the assessee was transferred from ITO, Ward-1(1)(4), Ahmedabad to ITO, ward-2(1), Bhavnagar. In response, the ITBA states that the said order was not executed and thus PAN was not transferred. T reply of the ITBA is reproduced as under:

“The transfer order: 2000000016109 executed and the PAN: was AANCS9634E was transferred from ITO, Ward-1(1)(4), Ahmadabad ITO, ward-2(1), Bhavnagar.”

It is thus submitted that the transfer of the PAN Ahmedabad to Bhavnagar could not be executed by aforesaid transfer order, the PAN of the assessee had remained with the office of ITO Ward-1(1)(4), Ahmedabad.
3. Regarding the issue as to when the PAN of the petitioner assessee is transferred from ITO Ward 2(1), Bhavnagar, Deputy commissioner of Income Tax, Circle-1, Bhavnagar as stated in para 2 of the objections of petitioner in response to reasons recorded to ITO Ward 1(1)(4), Ahmedabad, it is submitted that as stated herein above, since the transfer of the PAN from Ahmedabad to Bhavnagar could not be not executed by aforesaid transfer order, the PAN of the assessee had remained with the office of ITO Ward – 1(1)(4), Ahmedabad at relevant point of time.
4. It is further relevant to submit that though the assessee in his objections stated that the assessee company does not have any or in office/factory/place of business at Ahmedabad Ahmedabad district, the website of the petitioner company i.e. diamondtmt.com/contact-us and diamondtmt.com/about [DIAMONDTMT500+] shows as on the date that the corporate office of the company is in Ahmedabad at 402, Ashirvad Paras Near Prahladnagar, Auda Garden, Satelite, Ahmadabad Gujarat (IN)-380015. The screenshot of relevant pages of website of the petitioner company are marked as Annexure-R/2.”
7.3. Referring to the above averments it was submitted that the Assistant Commissioner, Income Tax Bhavnagar has also stated that the transfer of the PAN from Ahmedabad to Bhavnagar could not be executed in view of the transfer order dated 25.10.2016 and the PAN of the petitioner had remained with the office of the ITO Ward 1(1) (4) Ahmedabad at the relevant point of time, which was further transferred on system to Ward 1(1) (3) Ahmedabad and therefore, the impugned notice is with jurisdiction. It was also submitted that the Assistant Commissioner of Income Tax Bhavnagar in the affidavit has also stated that the petitioner is having the Corporate office at Ahmedabad and therefore, the respondent no. 1 has a concurrent jurisdiction to issue the impugned notice which is not required to be interfered with.
7.4. Learned Senior Standing Counsel Mr. Patel thereafter referred to the further affidavit filed by the Assistant Commissioner of the Income Tax Circle (1), Bhavnagar on behalf of the respondents, though he is not a party respondent in the petition, to point out that though the order under Section 127 of the Act was passed on 25.10.2016, the physical records were also transferred, but due to system shortcoming, the technical migration of PAN on the system was not effected and the jurisdictional history of the assessee continued to reflect on the Ahmedabad charge. Learned Senior Standing Counsel Mr. Patel referred to and relied upon the following averments made in the said affidavit-in-reply.
“1. It is submitted that the present affidavit is being filed to place on record the circumstances in which the notice under Section 148 of the Income Tax Act, 1961, dated 30.03.2021 for Assessment Year 2017-18, came to be issued by the ITO ward-1(1)(3) Ahmedabad, despite an earlier order of transfer o jurisdiction having been passed under Section 127 of the Act.
2.It is submitted that an order under Section 127 of the Act was passed on 25.10.2016, transferring the jurisdiction in respect Petitioner’s PAN from ITO, Ward 111314), Ahmedabad PCIT-1, Ahmedabad) to DCIT, Circle-1. Bhavnagar (under PCIT-6, Ahmedabad). A copy of the said order u/s 127 25.10.2016 is annexed hereto and marked as Annexure-R1. It is further submitted that pursuant to the above order under Section 127, the physical case records for A.Y. 2014-15 were also transferred by the ITO, Ward 1(1)(4), Ahmedabad to DCIT, Circle-1, Bhavnagar on 11.11.2016, as is evident from the Transfer Memo, copy of which annexed hereto and marked as Annexure-R/2.
3.It however appears that due to system shortcoming, the technical migration of PAN on the system was not effected and the jurisdictional history of the assessee continued to reflect under the Ahmedabad Charge. The relevant system history is annexed hereto and marked as Annexure-R/3.
4.is further submitted that the details of the assessment proceedings conducted after the passing of the order u/s.127 of dated 25.10.2016 are annexed hereto and marked as Annexure-R/4.
5.It is submitted that efforts were made by the AO to effectuate the PAN transfer on the system. That for a brief period during 2019, the PAN did reflect technically under Bhavnagar jurisdiction, however, this was not sustained due to system-related constraints. As per the ITBA, the transfer order could not be executed on 08.11.2019 and thus PAN could not be erred, acknowledging the system failure.
6.It is further respectfully submitted that in the current systempendent regime, jurisdiction is effectively exercised only appropriate jurisdiction in the ITBA portal. The transfer of case records, although duly completed, does not suffice in practical terms without technical reflection of PAN. For complete transfer of the case from one charge to other charge both activities are necessary i.e. passing of order u/s 127 of the Act and PAN transfer. Notwithstanding the technical shortcoming, the AO at Bhavnagar was able to conduct necessary proceedings in coordination with the AO at Ahmedabad and carried out basic assessment functions.
7.It is submitted that when the notice under Section 148 for A.Y. 2017-18 was issued on 30.03.2021, during the peak of the COVID-19 pandemic and after merger/ demerger of the charges due to restructuring of the department, the then AO at Ahmedabad appears to have relied on the jurisdictional status as reflected in the ITBA system. It appears that the then AO was unaware of the earlier physical transfer u/s.127, as the order was not visible on ITBA system, and due to the high volume of PANs and dependence of IT system, it is humanly practical for the AO to manually verify prior jurisdiction of case.
8.It is submitted that the re-opening in the present case was made as per the provisions of the Act and after taking approval /s. 151 of the Act by the Addl. CIT, Range-1(1), Ahmedabad. The non-transfer of PAN on ITBA was a systemic lapse rather than a jurisdictional illegality. Therefore, procedural failure of transfer of PAN, due to which the ITO, ward-1(1)(3), Ahmedabad issued the notice u/s 148 of the Act is covered u/s 2928 & 292BB of the Act, which saves the proceedings from being vitiated due to any procedural irregularity. Once the assessee files return and participates in proceedings without timely objection, they cannot challenge notice or jurisdiction.
9.It is thus submitted that the notice under Section 148 was issued bonafide, based on the jurisdiction reflected in the system, and without any mala fide or conscious deviation from the Act.
10.It is further submitted that the petitioner filed return of income on 22.04.2021 in response to the said notice dated 30.03.2021 and participated in the proceedings. Notice under Section 143(2) r.w.s. 147 was then issued on 18.06.2021. The petitioner raised jurisdictional objection only on 02.08.2021. It is submitted that Section 124(3) provides a time-bound opportunity to raise jurisdictional within one month the date of return or participation in proceedings. If no objection is raised within that time, jurisdiction is deemed to be accepted. In the present case, the return was filed on 22.04.2021, and proceedings were continued without objection. The assessee raised jurisdictional objection only on 2.08.2021, well beyond the statutory deadline. Thus, there is substantial delay in the filing of objections from the date of participation in the assessment proceedings. Accordingly, the challenge is barred by law under Section 124(3) (a) of the I.T. Act. Reliance is placed on the judgment of Hon’ble High Court of Calcutta in the case of Elite Pharmaceuticals v. ITO. ward 46(1) Kolkata (Calcutta) and the judgment of Hon’ble High Court, Delhi in the case of Abhisek Jain v. ITO, Ward- 55(1), New Delhi  (Delhi)/[2018] 405 ITR 1 (Delhi)].”
7.5. Referring to the above affidavit and the averments made therein, it was submitted that as the petitioner is having place of business in Ahmedabad and respondent no. 1 has jurisdiction to issue the impugned notice for reopening under Section 148 of the Act.
8. In support of his submissions, reliance was placed on the following decisions ::
(1)The decision of Hon’ble Delhi High Court in case of Abhishek Jain v. ITO  ITR 1 (Delhi).
(2)The decision of Hon’ble Delhi High Court in case of CIT v. S.S. Ahluwalia  (Delhi).
8.1. It was submitted that in both the cases, similar facts were available with the Hon’ble Delhi High Court. It was submitted that in case of Abhishek Jain (supra) the notice issued under Section 148 of the Act by the respondent Department was under challenge calling upon the jurisdiction of the Assessing Officer as the notice was issued by the Officer at Noida, whereas the place of business of the petitioner was at New Delhi. It was submitted that the Hon’ble Delhi High Court after considering the submissions made by the respondent Department held that the contention of the assessee that transfer by the Income Tax Officer, Ward 1(1) Noida to Income Tax Officer, Ward 58(2) Delhi required an order under Section 127 of the Act is fallacious and without merit as Section 127 of the Act related to transfer of case from one Assessing Officer having jurisdiction to another Assessing Officer who is otherwise not having jurisdiction as per direction of the Board under Section 120 and Section 124 of the Act.
8.2. It was pointed out that the Hon’ble Delhi High Court has held that under sub-section (1), transfer order under Section 127 can be passed by the Director General, Chief Commissioner or Commissioners from one Assessing Officer to another Assessing Officer subordinate to them and after analysing the provisions of the Act, the Hon’ble Delhi High Court held that it was not the case of transfer under Section 127 of the Act, wheres the objection raised by the assessee stating that the Income Tax Officer, Ward 1(1) Noida should not continue with the assessment as the petitioner assessee was regularly filing returns with the Income Tax Officer, Ward 58(2) Delhi. The said objection was not raised within time under Section 124(3) of the Act and there was a delay and non-compliance and therefore, the Income Tax Officer, at Noida accepted the prayer of the petitioner and transfer pending proceedings to the Assessing Officer, Ward 58(2) Delhi and therefore, there was no need to invoke and follow the procedure mentioned under sub-section (2) of Section 127 of the Act.
8.3. It was therefore submitted that in the facts of the case also the petitioner had not raised objection for issuance of the impugned notice under Section 124(3) of the Act and therefore, there is no need of an order under Section 127 of the Act to transfer the jurisdiction from Bhavnagar to Ahmedabad.
9. Referring to the decision in case of S.S. Ahluwalia (supra) it was submitted that the power to transfer the cases for each year is separate and distinct in case of the assessee once the assessee shifts his residence or place of business or work etc. the Assessing Officer of place where the assessee has shifted or otherwise will have jurisdiction and it is not necessary that in such cases, an order under Section 127 of the Act is required to be passed. It was, therefore submitted, that when the petitioner has Corporate office at Ahmedabad there is no need of any order of transfer under Section 127 of the Act to assume the jurisdiction to issue notice under Section 148 of the Act.
10. Having heard the learned advocates for the respective parties and considering the facts of the case, it is not in dispute that there is no transfer order passed under Section 127 of the Act is available after the transfer of the case of the petitioner to Bhavnagar by the transfer order dated 25.10.2016. It appears that the respondent no. 1 Assessing Officer has assumed the jurisdiction only on the basis of the data reflected in the ITBA system which shows that the PAN jurisdiction of the Assessing Officer was with the respondent no. 1.
10.1. It is therefore very apparent that the respondent no. 1 Assessing Officer has without application of mind as to whether the petitioner has filed the return of income for the Assessment Year 2017-18 in the Ward 1(1)(3) Ahmedabad or not and without considering the assessment records of the petitioner has merely followed what is shown in the system to assume the jurisdiction. It is also apparent from the record that the respondent Assessing Officer has also remained negligent and careless in his conduct by not verifying the records available on the system regarding the Assessment Orders passed in case of the petitioner from Assessment Year 2013-14 onwards by the Assessing Office at Bhavnagar.
10.2. It is pertinent to note that when this Court made queries and inquiries, the respondent Assessing Officer as well as the Assistant Commissioner at Bhavnagar, have found out the details with regard to the transfer order dated 25.10.2016 and had the Assessing Officer while issuing the impugned notice dated 30.03.2021 would have remained vigilant and found out that the Assessing Officer at Bhavnagar is having jurisdiction then though the prima facie case of the Revenue is very strong, the Assessing Officer at Bhavnagar could have issued the impugned notice with jurisdiction. In such circumstances, but for the sheer negligence and non-application of mind on the part of the respondent no. 1 Assessing officer, the impugned notice would have survived the test of jurisdiction.
11. Reliance placed on behalf of the respondents on the decisions of the Hon’ble Delhi High Court in case of Abhishek Jain (supra) and S.S. Ahluwalia (supra) would not be applicable in the facts of the case because before the Delhi High Court the facts were totally different which can be referred to as under :-
11.1. In case of Abhishek Jain (supra), the Income Tax Officer, Noida issued the notice under Section 148 of the Act though the petitioner before the Delhi High Court was filing the return with Income Tax Officer, Ward No. 36(1), Delhi and thereafter with the Ward No. 58(2) Delhi and the transfer of the case records by the Income Tax Officer, Noida to Income Tax Officer, Ward 58(2) Delhi was made pursuant to the notice under Section 148 of the Act for the Assessment Year 2009-10 issued by the former which is void and bad in law as the Income Tax Officer Ward No. 1(1), Noida did not have the jurisdiction and the procedure prescribed for transfer of case as per Section 127 of the Act was not followed. The Chief Commissioner having jurisdiction over the Income Tax Officer, Noida had not passed any order for transfer of the case. In such facts, the Hon’ble Delhi High Court held that the case of the petitioner before the Court did not respond to the notices issued under Section 148 of the Act and thereafter the objection was raised to the Income Tax Officer Ward 1(1) Noida after 31.03.2016 and thereafter so as to see that the prescribed time limit under Section 149 of the Act is over and thereafter the Income Tax Officer, Delhi could not not have issued the fresh notice under Section 148 of the Act. In view of the provisions of the Act and peculiar facts of the case, it was held as under :-
“19. We would reiterate that sub-section (1) to Section 124 states that the Assessing Officer would have jurisdiction over the area in terms of any direction or order issued under sub-section (1) or sub-section (2) to Section 120 of the Act. Jurisdiction would depend upon the place where the person carries on business or profession or the area in which he is residing. Sub- section (3) clearly states that no person can call in question jurisdiction of an Assessing Officer in case of non-compliance and/or after the period stipulated in clauses (a) and (b), which as observed in S.S. Ahluwalia (supra) would negate and reject arguments predicated on lack of subject matter jurisdiction. Where an assessee questions jurisdiction of the Assessing Officer within the time limit and in terms of sub-section (3), and the Assessing Officer is not satisfied with the correctness of the claim, he is required to refer the matter for determination under sub-section (2) before the assessment is made. Reference of matter under sub-section (2) would not be required when Assessing Officer accepts the claim of the assessee and transfers the case to another Assessing Officer in view the objection by the assessee. (In terms of subsection (3) to Section 124 of the Act, the petitioner had lost his right to question jurisdiction of the Income Tax Officer, Ward No. 1(1), Noida.)
20. Sub-section (5) to Section 124, though limited in scope, would also be applicable in the facts and circumstances of the present case as the Income-Tax Officer, Ward-1 (1), Noida had the power to assess income accruing or arising within the area as it is not the case of the petitioner- assessee that the said officer did not have jurisdiction in view of location of the bank account and/or petitioner’s place of work. Section 124(5) of the Act saves assessment made by an assessing officer provided that the assessment does not bring to tax anything other than income accruing, arising or received in that area over which the assessing officer exercises jurisdiction. However, notwithstanding Section 124(5), the Act does not postulate multiple assessments by different assessing officers, or assessment of part or portion of an income [see Kanjimal & Sons v. Commissioner of Income Tax, New Delhi, (1982) 138 ITR 391 (Del)]. Thus, it is necessary that the Assessing Officers having concurrent jurisdiction ensure that only one of them proceeds and adjudicate. This is the purport and objective behind subsection (2) to Section 124 of the Act.
21. Contention of the petitioner that the transfer by Income-Tax Officer, Ward-1(1), Noida to Income-Tax Officer, Ward-58 (2), Delhi required an order under Section 127 of the Act is fallacious and without merit. Section 127 relates to transfer of case from one Assessing Officer having jurisdiction to another Assessing Officer, who is otherwise not having jurisdiction as per directions of the Board under Section 120 and Section 124 of the Act. Under sub-section (1), transfer order under Section 127 can be passed by the Director General, Chief Commissioner or Commissioners from one Assessing Officer to another Assessing Officer subordinated to them. Sub-section (2) applies where the Assessing Officer to whom the case is to be transferred is not subordinated to the same Director General, Chief Commissioner or Commissioners of the Assessing Officer from whom the case is to be transferred. This is not a case of a transfer under Section 127 of the Act. This is a case in which the assessee had raised an objection stating that the Income-Tax Officer, Ward-1 (1), Noida should not continue with the assessment as the petitioner-assessee was regularly filing returns with the Income-Tax Officer, Ward-58 (2), Delhi. Objection as raised were treated as made in terms of sub-section (3) to Section 124, notwithstanding the fact that there was delay and non-compliance. The Income-Tax Officer, Ward-1 (1), Noida accepted the request/prayer of the petitioner and had transferred pending proceeding to the Assessing Officer, Ward-58 (2), Delhi. Therefore, there was no need to invoke and follow the procedure mentioned in subsection (2) to Section 127 of the Act. Section 127 of the Act would come into play when the case is to be transferred from the Assessing Officer having jurisdiction to a third officer not having jurisdiction over an assessee (a case) in terms of the directions of the Board under section 120 of the Act. Section 127 of the Act could also apply when the department wants transfer of a case, and Sections 120 and 124 of the Act are not attracted.
22. Counsel for the petitioner had relied upon judgment of the Supreme Court in Hasham Abbas Sayyad v. Usman Abbas Sayyad & Ors., (2007) 2 SCC 355 which draws distinction between a person or authority lacking inherent jurisdiction which makes the order passed by them a nullity, and therefore, principle of estoppel, waiver and acquiescence or even res judicata which are procedural in nature, would not have any application. Such orders passed without jurisdiction would suffer lack of coram non judice and cannot be given effect to. This decision refers to Harshad Chiman Lal Modi v. DLF Universal Ltd. & Anr., (2005) 7 SCC 791, which classifies and draws jurisprudential difference amongst – territorial or local jurisdiction; pecuniary jurisdiction; and jurisdiction over the subject matter. As far as territorial or pecuniary jurisdictions are concerned, objection should be taken at the earliest possible opportunity and /or before the settlement of issues and not at the subsequent stage. Jurisdiction as to the subject matter is distinct and stands on a different footing.
23. In view of the above discussion, objections as to the jurisdiction of assessing officer in the present case cannot be equated with lack of subject matter jurisdiction. They relate to place of assessment. Income-Tax Officer Ward 1(1), Noida would not per se lack jurisdiction, albeit he had concurrent jurisdiction with the Income-Tax Officer Ward 36(1)/58, Delhi. In the facts of the present case the contention raised about the lack of jurisdiction would not justify quashing the notice under Section 147 /148 of the Act”
12. The Hon’ble Delhi High Court while arriving at the above decision relied upon its own decision in case of S.S. Ahluwalia (supra) wherein it is held as under :-
“52. In view of the aforesaid discussion, we answer the substantial questions of law relating to the first round, i.e., ITA Nos. 256/02, 257/02 and 255/02 holding:-
(i)There was failure on the part of the Assessing Officer, Delhi and ITO, Dimapur in not following the procedure prescribed under Section 124 of the Act, but this would not make the assessment in the first round a nullity. The assessment order passed should have been set aside as was directed by CIT(Appeals) and assessments remitted for a fresh decision. Question of law is accordingly answered in favour of the Revenue and against the respondent-assessee but in the aforesaid terms.
(ii)ITA Nos. 314/02, 315/02 and 316/02 which relate to the second round, the substantial question of law is answered in favour of the Revenue and against the respondent-assessee. The tribunal clearly erred in not noticing that in the second round assessment order were passed by ITO, Dimapur and consequent to the order under Section 127, the first appeal was decided by CIT(Appeals) at Delhi. In view of the decision in ITA Nos. 256/02, 257/02 and 255/02 relating to the first round, the order of the tribunal dated 13.05.2002 cannot be sustained.
(iii)In view of the answers to the substantial questions of law mentioned above relating to the first and the second round, the substantial question of law in the fourth round i.e. ITA Nos. 1577/2006, 1578/2006 and 1580/2006 has to be answered in favour of the Revenue and against the respondent-assessee but subject to the observations made above.”
12.1 In the case of S.S. Ahluwalia (supra) before the Delhi High Court, the facts were to the effect that the respondent assessee did not file the return pursuant to the notices for the Assessment Year 1985-86 to 1987-88 issued under Section 148 of the Act and subsequently the notices were issued under Section 142(1) of the Act and thereafter the assessee raised objection to the jurisdiction of the Assessing Officer, Delhi on the ground that the assessee was employed with the Government of Nagaland and was regularly assessed by the Income Tax officer, ‘A’ Ward, Dimapur for the last many years. The Hon’ble Delhi High Court after considering such facts and the orders passed by the Assessing Officer, CIT (Appeals) and Tribunal and after considering the proceedings initiated by the assessee carried out litigation under Section 127(2) of the Act for transfer of the cases challenging the order passed under Section 127(2) (a) of the Act, passed by the Income Tax Officer, Dimapur in March, 1995 and preferring appeal before the CIT (Appeals) framed the substantial questions of law to the effect that “Whether the ITAT was correct in law in holding that the order of assessment passed by the ACIT, Investigation Circle 8(1), New Delhi were without jurisdiction and therefore void ab initio?
12.2. In such facts, the Hon’ble Delhi High Court after considering the provisions of Sections 120, 124 and 127 arrived at the following findings :
52. In view of the aforesaid discussion, we answer the substantial questions of law relating to the first round, i.e., ITA Nos. 256/02, 257/02 and 255/02 holding:-
(i)There was failure on the part of the Assessing Officer, Delhi and ITO, Dimapur in not following the procedure prescribed under Section 124 of the Act, but this would not make the assessment in the first round a nullity. The assessment order passed should have been set aside as was directed by CIT(Appeals) and assessments remitted for a fresh decision. Question of law is accordingly answered in favour of the Revenue and against the respondent-assessee but in the aforesaid terms.
(ii)ITA Nos. 314/02, 315/02 and 316/02 which relate to the second round, the substantial question of law is answered in favour of the Revenue and against the respondent-assessee.

The tribunal clearly erred in not noticing that in the second round assessment order were passed by ITO, Dimapur and consequent to the order under Section 127, the first appeal was decided by CIT(Appeals) at Delhi. In view of the decision in ITA Nos. 256/02, 257/02 and 255/02 relating to the first round, the order of the tribunal dated 13.05.2002 cannot be sustained.

(iii)In view of the answers to the substantial questions of law mentioned above relating to the first and the second round, the substantial question of law in the fourth round i.e. ITA Nos. 1577/2006, 1578/2006 and 1580/2006 has to be answered in favour of the Revenue and against the respondent-assessee but subject to the observations made above.
58. In light of the aforesaid discussion and the position of law, the substantial question of law raised in the present wealth tax appeals are answered in favour of the appellant-Revenue and against the respondent-assessee. It is apparent that the respondent assessee did not challenge and object to the jurisdiction of the Assessing Officer at any stage. Reference to the Commissioner/Commissioners was not required as per the Section 124 of the Act. There was waiver and respondent/assessee had accepted jurisdiction of the AO, Delhi. Tribunal could not have, therefore, held to the contrary. The tribunal will now decide the appeals of the assessee/Revenue pending before them on merits and not on the question of jurisdiction of the Assessing Officer. To cut short delay, parties are directed to appear before the tribunal on 15th April, 2014, when a date of hearing will be fixed.”
13. Considering the facts of both the above case, it appears that the Hon’ble Delhi High Court has held in favour of the Revenue only on the ground that the Assessing Officer had jurisdiction to issue notice under Section 148 of the Act considering the peculiar facts of each case, whereas in the facts of the present case, admittedly there was a transfer order dated 25.10.2016 transferring the case of the petitioner from Ahmedabad to Bhavnagar and the entire case records were transferred to Bhavnagar by the Transfer Memo dated 28.10.2016 and thereafter the Assessing Officer, Bhavnagar had passed the Assessment Orders from Assessment Year 2013-14 to Assessment Year 2015-16 and the assessee continued to file the assessment return of income at Bhavnagar and in absence of any order thereafter passed under Section 127 of the Act, the respondent Assessing Officer could not have assumed the jurisdiction to issue the notice under Section 148 of the Act relying upon the ITBA system showing the PAN jurisdiction with the respondent no. 1.
14. It is pertinent to note that the respondent has failed to show that as to how the PAN jurisdiction shown in the ITBA system would confer the jurisdiction upon the respondent without there being any order passed under Section 127 of the Act to transfer the case of the petitioner from Bhavnagar to Ahmedabad. It is admitted by the respondent Assistant Commissioner, Bhavnagar in its affidavit-in-reply affirmed on 05.08.2025 that due to system shortcoming, the technical migration of the PAN on the system was not effected and the jurisdiction of the assessee continue to reflect under the Ahmedabad Charge. Thus, it is apparent that the respondent no. 1 has assumed the jurisdiction only on the ground of the system shortcomings by not effecting migration of the jurisdiction from Ahmedabad to Bhavnagar pursuant to the order dated 25.10.2016 passed under Section 127 of the Act. Therefore, we are of the opinion that the system cannot prevail over the orders passed under the provisions of the Act and the system cannot be the master of the proceedings in absence of the orders passed under the statute. The respondent Assessing Officer has, thus, become a slave of the system instead of using the system for exercise of the jurisdiction. Therefore without entering into the merits of the matter, the impugned notice dated 30.03.2021 and the order disposing of the objections are hereby quashed and set aside only on the ground that the respondent no. 1 has no jurisdiction to issue the impugned notice and the order passed by the respondent as admittedly the jurisdiction remains with the Income Tax Officer at Bhavnagar from 25.10.2016 till date. It is also clarified that the Assessing Officer has jurisdiction at Bhavnagar and if time permits he may exercise his jurisdiction in accordance with law.
15. The petition stands disposed of. Rule is made absolute to the aforesaid extent with no order as to costs.