Additional CIT lacks jurisdiction to pass assessment order without proper authorization under sections 120 or 127

The ITAT Mumbai held that an assessment order passed by Additional CIT under section 143(3) read with section 144C(13) was without jurisdiction and set it aside. The Revenue failed to produce orders under section 120(4)(b) or section 127 authorizing the Additional CIT to exercise Assessing Officer powers. The court distinguished that section 124(3) time limits apply only to territorial jurisdiction challenges, not cases where the officer acts without legal authority. The assessee's appeal was allowed.

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Issues Involved:
1. Jurisdiction of the Additional Commissioner of Income Tax (Addl. CIT) in passing the assessment order.
2. Admission of additional grounds of appeal by the assessee.
3. Validity of the assessment order under section 143(3) read with section 144C(13) of the Income Tax Act, 1961.

Summary:

1. Jurisdiction of the Additional Commissioner of Income Tax (Addl. CIT):
The assessee challenged the jurisdiction of the Addl. CIT in passing the assessment order dated 28.10.2011 u/s 143(3) read with section 144C(13) of the Act, arguing that the Addl. CIT lacked the legal and valid jurisdiction as he was not conferred such jurisdiction u/s 120(4)(b) of the Act, nor was there an order transferring the jurisdiction u/s 127 of the Act. The Tribunal noted that the Revenue failed to produce the assignment orders or any order u/s 120(4)(b) or section 127 of the Act, which would authorize the Addl. CIT to act as an Assessing Officer. The Tribunal emphasized that the jurisdictional challenge goes to the root of the matter and must be addressed even if raised for the first time before the Tribunal.

2. Admission of Additional Grounds of Appeal:
The Tribunal admitted the additional grounds of appeal raised by the assessee, citing the Supreme Court's decision in NTPC Ltd., which allows legal issues to be raised for the first time before the Tribunal if the relevant facts are on record. The Tribunal dismissed the Revenue's objection regarding the delay in raising these grounds, referencing multiple cases where similar grounds were admitted after significant delays. The Tribunal held that the challenge to the jurisdiction of the authority under the Act is a pure question of law and can be raised at any stage.

3. Validity of the Assessment Order:
The Tribunal found that the assessment order passed by the Addl. CIT was without jurisdiction due to the absence of requisite orders under section 120(4)(b) and section 127 of the Act. The Tribunal quashed the impugned final assessment order for the assessment year 2007-08, as it was passed without proper jurisdiction. Consequently, the regular grounds of appeal on merits raised by the assessee were deemed academic and left open.

Conclusion:
The appeal by the assessee was allowed, and the appeal by the Revenue was dismissed as infructuous. The Tribunal set aside the impugned final assessment order due to lack of jurisdiction by the Addl. CIT.

Order Pronounced:
The order was pronounced in the open Court on 07/06/2024.

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