2019 (7) TMI 1515 - AT - Income Tax

Tribunal quashes assessment order for lack of jurisdiction under Income Tax Act

Tata Sons Limited. Versus Addl. CIT-2 (3), Mumbai.

The Tribunal quashed the assessment order passed by the Additional Commissioner of Income Tax (Addl. CIT) due to lack of valid jurisdiction under sections ... AO jurisdiction to pass assessment order in absence of a valid order passed u/s 120(4)(b) as well as section 127(1) - HELD THAT:- With view taken by the coordinate bench in assessee’s own case for AY 2004-05 [2019 (4) TMI 510 - ITAT MUMBAI] we are of the considered view that the AO who passed impugned assessment order is having no jurisdiction to pass assessment order in absence of a valid order passed u/s 120(4)(b) as well as section 127(1) consequently, the assessment order passed by the AO is bad in law and liable to be quashed. Accordingly, we quashed assessment order passed by the AO. Issues Involved:1. Jurisdiction of the Additional Commissioner of Income Tax (Addl. CIT) to pass the assessment order.2. Validity of the assessment order passed by the Addl. CIT without a valid order under sections 120(4)(b) and 127(1) of the Income Tax Act, 1961.3. Consequence of quashing the assessment order on the grounds raised by both the assessee and the revenue.Detailed Analysis:Jurisdiction of the Additional Commissioner of Income Tax (Addl. CIT):The core issue in these appeals was whether the Addl. CIT had the jurisdiction to pass the assessment order. The assessee argued that the assessment order was invalid as the Addl. CIT did not have the requisite jurisdiction under sections 120(4)(b) and 127(1) of the Income Tax Act, 1961. The Tribunal noted that this issue was previously decided in favor of the assessee in their own case for AY 2004-05. The Tribunal emphasized that the legal competence of the officer who passed the assessment order must be established based on the provisions of the law and not on the conduct of the assessee.Validity of the Assessment Order:The Tribunal examined the relevant provisions and previous judicial decisions to determine the validity of the assessment order. It was observed that the Addl. CIT could not exercise the powers of an Assessing Officer without a valid order under sections 120(4)(b) and 127(1). The Tribunal cited several judgments, including those from the Hon’ble Supreme Court and various High Courts, which established that an order passed by an officer without proper jurisdiction is void ab initio. The Tribunal concluded that the Addl. CIT did not have the authority to pass the assessment order in the absence of a valid transfer of jurisdiction.Consequence of Quashing the Assessment Order:Given that the assessment order was quashed due to lack of jurisdiction, the Tribunal held that the grounds raised by both the assessee and the revenue on the merits of the case became academic and did not require specific adjudication. Therefore, the appeal filed by the assessee was allowed, and the appeal filed by the revenue was dismissed.Conclusion:The Tribunal quashed the assessment order passed by the Addl. CIT due to the lack of valid jurisdiction under sections 120(4)(b) and 127(1) of the Income Tax Act, 1961. Consequently, the grounds raised by both the assessee and the revenue on the merits were not adjudicated as they became academic in nature. The appeal by the assessee was allowed, and the appeal by the revenue was dismissed.