Section 127

Section 127 — the law in short

What the courts have decided on section 127, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• PCIT v ABC Papers Ltd Supreme CourtCuts both ways
  My case was transferred under section 127 to an Assessing Officer in another state — which High Court now hears the appeal against the Tribunal's order?
  The High Court where the Assessing Officer who passed the assessment order sits. The Supreme Court held on 18 August 2022 that an appeal under section 260A lies only to that High Court, and that a transfer of the case under section 127 does not shift appellate jurisdiction — even a transfer for the same assessment year. The Delhi High Court's contrary decisions in CIT v. Sahara India Financial Corporation Ltd. and CIT v. Aar Bee Industries Ltd. were overruled. Nor does the location of the Tribunal decide the forum, since a Bench of the Tribunal often covers several states.
• B. Mohammad Iqbal v ACIT High CourtHelps taxpayerValidity unconfirmed
  The section 276CC complaint against me was filed by an Assistant Commissioner although my case was with the Income-tax Officer, and no assessment was ever made on the capital gain the complaint alleges. Can that prosecution stand?
  No, on this decision. The Madras High Court quashed the complaint. Only the officer on whom jurisdiction has been conferred by directions or orders is the Assessing Officer; here the show cause notice came from the Income-tax Officer of the ward while the complaint was laid by the Assistant Commissioner, with no transfer under section 127 and no intimation under section 129, so the sanction under section 279 had been given without any application of mind to the question of jurisdiction. Separately, no regular assessment had ever been made, so the tax threshold in the proviso to section 276CC could not be tested and the prosecution was premature.
• FCS Manufacturing (India) Pvt Ltd v DDIT High CourtCuts both waysValidity unconfirmed
  Your bank accounts are provisionally attached and the business cannot operate. Is there a way out short of paying?
  Yes — offer security. Provisional attachment exists to protect the revenue, not to freeze a business indefinitely. Where a bank guarantee and directors' undertakings could secure the revenue, continuation of the attachment was set aside.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.