By TIOL News Service

NEW DELHI, OCT 27, 2016: THE issue is - Whether transfer of assessment file from jurisdictional AO of one State to another, can be sustained, in the absence of any agreement between the two jurisdictional Commissioners. NO is the verdict.

Facts of the case

The assessee had preferred the present appeal challenging the order of the High Court of Madras, Madurai Bench, whereby, the transfer of the income-tax/assessment file of the assessee from Tamil Nadu to Kerala as made by the jurisdictional CIT, Madurai, had been upheld.

Having heard the parties, the Supreme Court held that,

++ as the Income-tax/assessment file of the assessee has been transferred from one AO in Tamil Nadu to another AO in Kerala and the two AOs are not subordinate to the same Director General or CCIT, u/s 127(2)(a) of the Act an agreement between the Director General, Chief Commissioner or Commissioner, as the case may be, of the two jurisdictions is necessary;

++ the counter affidavit filed on behalf of the Revenue does not disclose that there was any such agreement. In fact, it has been consistently and repeatedly stated in the said counter affidavit that there is no disagreement between the two Commissioners. Absence of disagreement cannot tantamount to agreement as visualized u/s 127(2)(a) which contemplates a positive state of mind of the two jurisdictional CIT which is conspicuously absent. In the above circumstances, this court holds that the transfer of the Income-tax/assessment file of assessee from AO, Tamil Nadu to AO, Kerala is not justified and/or authorized u/s 127(2)(a) and the order of transfer is accordingly set aside.

(See 2016-TIOL-182-SC-IT)