2010 (12) TMI 1242 - AT - Income Tax

Assessment order quashed due to jurisdiction issue and limitation bar. Grounds of appeal deemed academic.

M/s. Prachi Leathers Pvt. Ltd. Versus The Addl. CIT, Range -VI, Kanpur

The Tribunal quashed the assessment order dated 15.02.2005 under Section 143(3) of the Act due to the invalidity of the jurisdiction conferred on the ... Exercising power of AO by the Addl. CIT - Validity of framing of assessment by the ld. Addl CIT (II) - HELD THAT:- According to tribunal, In the present case, no such document has been brought to our notice by the Department and therefore, very existence of order is in doubt. Under the provisions of law any direction or order transferring jurisdiction over case of any person/assessee or authorizing any officer to exercise and perform the powers and functions of a particular authority, in the present case that of the AO, the order or direction has to be signed by the concerned authorities and in the present case it was the CIT. This letter signed by the Income-tax Officer (Tech.), In our considered view, the decision rendered by the Tribunal in A.Y.2001-02 of the assessee’s own case in ITA No.744(Luc.)/2004 is squarely applicable to the facts of the present case and therefore, cannot be taken as an order passed by the CIT in exercise of is power u/s 120 or u/s 120(4)(b) or u/s 127. therefore, we quash the assessment order dated 15.2.2005 passed u/s 143(3). we may also observe that the notice dated 17.9.2004 issued u/s 143(2) is clearly barred by limitation as per proviso to section 143(2) because the same was issued and served upon the assessee beyond the period of 12 months from the end of the month the return was filed i.e. 30.10.2002. Issues Involved:1. Jurisdiction of Additional CIT to act as Assessing Officer (AO).2. Validity of notice under Section 143(2) issued by Additional CIT.3. Limitation period for issuing notice under Section 143(2).Detailed Analysis:1. Jurisdiction of Additional CIT to Act as Assessing Officer (AO):The primary issue was whether the Additional CIT, Range-VI, Kanpur, had the jurisdiction to act as an AO at the time of issuing the notice under Section 143(2) for the assessment year 2002-03. The appellant argued that the Additional CIT was not vested with such jurisdiction. The CIT(A) noted that the CIT-II, Kanpur, had issued an order on 21.01.2003 assigning specific cases, including the appellant's, to the Additional CIT for scrutiny and assessment. This was supported by a notification from the CBDT (S.O. No. 889(E) dated 17th September 2001) conferring AO powers on an Additional Commissioner. The Tribunal, however, found that the letter dated 21.01.2003 signed by the ITO (Tech.) could not be considered an order passed by the CIT under Sections 120 or 127 of the Act. The Tribunal had previously quashed a similar assessment order for the assessment year 2001-02 on these grounds, and this decision was applied to the present case, leading to the quashing of the assessment order dated 15.02.2005.2. Validity of Notice under Section 143(2) Issued by Additional CIT:The appellant contended that the notice under Section 143(2) dated 21.02.2003, issued by the Additional CIT, Range-VI, Kanpur, was invalid due to the lack of jurisdiction. The CIT(A) held that the Additional CIT had concurrent jurisdiction and was competent to issue the notice. However, the Tribunal, referencing its earlier decision, stated that the letter from the ITO (Tech.) did not constitute a valid order conferring jurisdiction on the Additional CIT. Consequently, the notice under Section 143(2) was deemed invalid.3. Limitation Period for Issuing Notice under Section 143(2):The appellant argued that the notice dated 17.09.2004 issued by the ACIT-VI, Kanpur, was barred by the limitation period specified in the proviso to Section 143(2) of the Act. The Tribunal agreed, noting that the notice was issued and served beyond the 12-month period from the end of the month in which the return was filed (30.10.2002). Therefore, the notice was clearly barred by limitation.Conclusion:The Tribunal quashed the assessment order dated 15.02.2005 under Section 143(3) of the Act due to the invalidity of the jurisdiction conferred on the Additional CIT and the notice under Section 143(2) being barred by limitation. Other grounds of appeal were deemed academic and not necessary to decide. The order was pronounced in the open court on 08.12.2010.