Jurisdictional validity of assessment order turns on lawful vesting of Assessing Officer powers; section 144C challenge fails.

Section 144C applied to assessment year 2010-11 because it was in force from 1 April 2009 and the assessee had participated in the Dispute Resolution Panel process; the objection to its applicability therefore failed. However, a Joint Commissioner can pass an assessment order only if validly vested with Assessing Officer jurisdiction under the Act or through lawful transfer or authorisation. As no valid empowerment or transfer order was shown, the assessment was held to have been made without jurisdiction and was quashed. The appeal succeeded on the jurisdictional ground, while the challenge to section 144C was rejected.

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Issues: (i) whether the provisions of section 144C of the Income Tax Act, 1961 applied to assessment year 2010-11 and whether the assessment framed under that provision was invalid for that reason; (ii) whether the Joint Commissioner who passed the assessment order had jurisdiction and competence to act as the Assessing Officer in the absence of a valid empowerment or transfer of jurisdiction.

Issue (i): whether the provisions of section 144C of the Income Tax Act, 1961 applied to assessment year 2010-11 and whether the assessment framed under that provision was invalid for that reason.

Analysis: Section 144C was inserted with effect from 01.04.2009 and operated as a special mechanism for eligible assessees whose variations arose from a transfer pricing order. The assessee had itself invoked the Dispute Resolution Panel procedure, filed objections, and participated in the statutory process. The draft assessment order, DRP directions, and final assessment were all passed within the framework contemplated by section 144C. The contention that the provision was inapplicable to assessment year 2010-11 was rejected.

Conclusion: The challenge based on non-applicability of section 144C failed and was decided against the assessee.

Issue (ii): whether the Joint Commissioner who passed the assessment order had jurisdiction and competence to act as the Assessing Officer in the absence of a valid empowerment or transfer of jurisdiction.

Analysis: A Joint Commissioner can function as an Assessing Officer only when validly vested with jurisdiction under section 120(4)(b) or through a legally sustainable transfer or authorisation. The material on record did not show a valid order conferring such jurisdiction on the Joint Commissioner for the assessee's case. The notification relied upon did not cure the defect, and no valid transfer order under section 127 was shown. In the absence of lawful jurisdiction, the assessment order was treated as having been passed without authority.

Conclusion: The assessment order was quashed for want of jurisdiction and the issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded on the jurisdictional ground, resulting in quashing of the impugned assessment order, while the objection to the applicability of section 144C was rejected.

Ratio Decidendi: An assessment order is void if passed by an officer who has not been validly vested with jurisdiction as Assessing Officer under the Act, and a Joint Commissioner can assume that role only through a lawful statutory empowerment or transfer.

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