The ITO passed a reassessment order under section 147/143(3) in case of assessee by making an addition of nominal amount as against assessees income. Thereafter, the assessees case was transferred under section 127 from ITO to Dy. CIT. Later on, Pr. CIT invoked his revisionary jurisdiction under section 263 requiring to set aside such reassessment order originally framed by ITO under section 147/143(2) and directed de novo assessment. Thereafter, the ITO (the erstwhile AO) gave effect to order of Pr. CIT and set aside such earlier order passed by him under section 147/143(3) and framed fresh assessment. The assessee challenged the said fresh assessment order challenging the jurisdiction of the AO, as the erstwhile AO passed the said order did not have jurisdiction over the assessee on the said date as the jurisdiction lied with the Dy. CIT to whom the order was transferred vide order under section 127.

The Tribunal held that  from plain reading of order under section 127 it was clear that jurisdiction over assessee’s case was transferred from ITO to Dy. CIT. The Tribunal following the Calcutta High Court  ruling in the case of. Ramshila Enterprises Pvt. Ltd. (2016)   383 ITR 546 /239 Taxman 17  (Cal) (HC), held that since the jurisdiction was divested of the ITO by virtue of transfer order, he ceased to be Assessing Officer after the date of transfer. As a result, the assessment order passed by the ITO (i.e. the erstwhile AO) was legally unsustainable and therefore null in the eyes of law and thereby quashed. (AY.2008-09)