Commissioner's revision order under Section 263 void due to lack of territorial jurisdiction over assessee

Calcutta HC held that a revision order u/s 263 passed by Commissioner of Income Tax IV, Kolkata was void ab initio due to lack of territorial jurisdiction. The court found that CIT 11, Kolkata was the jurisdictional commissioner when the order was passed, not CIT IV. The court ruled that territorial jurisdiction goes to the root of authority and such defects render orders nullity. Section 292BB was held inapplicable as it relates to deemed service, not territorial jurisdiction. The substantial questions of law were answered in favor of the assessee.

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Issues:
1. Territorial jurisdiction of the Assessing Officer in quashing the Assessment Order.
2. Entertaining the plea of territorial jurisdiction after the lapse of time limit specified in the Income Tax Act.

Analysis:
1. The High Court of Calcutta heard an appeal regarding the territorial jurisdiction issue raised by the appellant/revenue against the Assessment Order passed by the Assessing Officer. The respondent/assessee's assessment was initially completed by the ITO Ward No.12(2), Kolkata, but subsequent jurisdictional changes occurred. The respondent filed an appeal before the ITAT challenging the jurisdiction of the CIT-IV, Kolkata to pass orders under Section 263 of the Income Tax Act, 1961. The ITAT found that the CIT-IV, Kolkata did not have jurisdiction, as per a notification issued by the CBDT, and concluded that the order passed by CIT-IV was without jurisdiction. The High Court noted that the lack of territorial jurisdiction of the authority to pass an order renders the order null and void abinitio, citing relevant legal precedents. The Court upheld the ITAT's decision, dismissing the appeal and ruling in favor of the assessee against the revenue.

2. The appellant argued that the Tribunal should not have entertained the ground of territorial jurisdiction as the respondent did not raise any objection within the time limit specified under Section 124(3) of the Income Tax Act, 1961. However, the High Court analyzed Section 124(3) and concluded that it does not apply to proceedings under Section 263 of the Act. The Court emphasized that the power of the CBDT to confer jurisdiction is crucial, and in this case, the Commissioner of Income Tax-11, Kolkata had jurisdiction, not the Commissioner of Income Tax-IV, Kolkata who passed the order under Section 263. The Court clarified that Section 292BB, relating to deemed service of notice, does not apply to the issue of territorial jurisdiction. The High Court held that the question of territorial jurisdiction was fundamental and could be raised at any stage, supporting the ITAT's decision to entertain the jurisdictional issue raised by the respondent/assessee. Ultimately, the Court dismissed the appeal, upholding the ITAT's order in favor of the assessee and against the revenue.

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