Assessment order ruled invalid due to lack of jurisdiction post-restructuring.

The ITAT upheld the CIT(A)'s decision, ruling that the assessment order passed by Addl. CIT, Range-7, on 27.02.2015 was invalid due to lack of jurisdiction post-restructuring. The ITAT affirmed the CIT(A)'s order, stating it was correct and dismissing the Revenue's appeal. The decision was pronounced on 23.01.2019.

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Issues Involved:
1. Validity of the assessment order passed by Addl. CIT considering it to be extra-jurisdictional.
2. Interpretation of the order restructuring passed by the CBDT and its impact on the jurisdiction of the Addl. CIT.
3. The procedural correctness of the assignment of the case to Addl. CIT under section 120(4) and section 127.

Detailed Analysis:

1. Validity of the Assessment Order Passed by Addl. CIT:
The primary issue revolves around whether the Addl. CIT, Range-7, had the jurisdiction to pass the assessment order for the assessment year 2012-13. The assessee contended that the Addl. CIT, Range-7, could not have performed the functions of an Assessing Officer (A.O.) after 15.11.2014 due to the restructuring of jurisdiction as per the CBDT notification dated 22.10.2014. The CIT(A) agreed with the assessee, noting that the Addl. CIT was divested of jurisdiction as an A.O. effective from 15.11.2014, as no valid order authorizing the Addl. CIT to act as an A.O. was passed post-restructuring.

2. Interpretation of the Order Restructuring Passed by the CBDT:
The restructuring notification dated 22.10.2014, which came into effect on 15.11.2014, superseded the previous notification (S.O. 732(E) dated 31.07.2001). According to the new notification, the Principal Commissioners or Commissioners of Income-tax were authorized to issue orders in writing for the exercise of powers and performance of functions by the Addl. CIT or Jt. CIT. However, the CIT(A) observed that no such order was passed post-restructuring authorizing the Addl. CIT, Range-7, to act as an A.O. Consequently, the assessment order passed by the Addl. CIT on 27.02.2015 was deemed illegal and unsustainable in law.

3. Procedural Correctness of the Assignment of the Case:
The CIT(A) examined whether the assignment of the case to Addl. CIT, Range-7, under section 120(4) or section 127 was valid. The CIT(A) noted that even if the case was assigned under section 127, the Addl. CIT, Range-7, was no longer an A.O. for the case from 15.11.2014 due to the restructuring. The remand report from Jt. CIT, Range-7, suggested that the restructuring was an administrative exercise and the order under section 120(4) remained valid post-restructuring. However, the CIT(A) disagreed, emphasizing that the restructuring notification explicitly required new orders to be passed to authorize the Addl. CIT to act as an A.O. post-restructuring.

Conclusion:
The ITAT upheld the CIT(A)'s decision, confirming that the assessment order passed by Addl. CIT, Range-7, on 27.02.2015 was invalid due to the lack of jurisdiction post-restructuring. The ITAT approved and confirmed the order of the CIT(A), stating that the conclusions arrived at by the CIT(A) were correct and did not require any interference. The appeal filed by the Revenue was thus dismissed. The order was pronounced in the open court on 23.01.2019.

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