TaxTMI 
TaxTMI 
2019 (4) TMI 510
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.... the order, (ii) Addl. CIT can perform functions and, exercise powers of an Assessing Officer only if he is specifically directed u/s 120(4)(b) of the Act and (iii) assessment has to be completed by the authority who has initiated proceedings for making assessment and any other authority can take over proceedings only after a proper order of transfer u/s 127(1) or 127(2) of proceedings. In this regard, the Ld. counsel of the assessee relied upon the order of the Co-ordinate Bench on similar facts and filed a copy of those orders. The Ld. counsel submits that the additional ground raised herein go to the very root of the matter and deal with the jurisdiction and authority of the AO to pass the assessment order. The question of jurisdiction can always be raised as an additional ground for the first time and is bound to be entertained as was decided in K.P. Narayansetty v. CIT (1967) 66 ITR 11 (Mys.). As the additional grounds of appeal filed by the assessee go into the matter of jurisdiction and similar issues have been decided by the Co-ordinate Bench, we admit the said additional grounds of appeal for adjudication. 3. The assessee-company filed its return of income for the asses....
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.... 732 (E) dated 31.07.2001 has directed the Additional/Joint CIT to exercise powers and perform functions of the Assessing Officer in respect of certain classes of person of a certain territorial area. Thus the Ld. DR submits that the Addl. CIT has validly exercised power of the Assessing Officer in initiating and completing the assessment proceedings in respect of the assessee. 5. We have heard the rival submissions and perused the relevant materials on record. We find that similar issue arose before the Co-ordinate Bench as mentioned by the Ld. counsel. In this context, we may reproduce the following observation of the Bench in Tata Sons Ltd. (supra) : "3.12. We have examined this issue. It is well accepted position that the Tribunal is a final fact finding body. Requisite documents required for establishing legal authority of the Assessing Officer who had passed the assessment order are expected to be available in the assessment records. Thus, the legal issue raised by the assessee falls in the category of cases which can be decided on the basis of material held on record. 3.13. Further, it is noted by us that the aforesaid grounds are purely legal grounds and do not requir....
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....imilar situation in the case of Valvoline Cummins Ltd 307 ITR 103 (Del) wherein challenge was made to the jurisdiction of Additional Commissioner of Income Tax who had passed the assessment order. It was contended on behalf of the Revenue that challenge of jurisdiction must be made within the stipulated time during the course of assessment proceedings in view of restrictions imposed by the provisions contained in section 124 of the Act. Hon'ble Delhi High Court in the aforesaid case held as under:- "This is well settled that mere acquiescence in the exercise of powers by a person who does not have jurisdiction to exercise that power cannot work as an estoppel against him." 3.15. It is further noted by us that in the case before us, a challenge has been made about the legal competence of the Additional Commissioner of Income tax and his jurisdiction to exercise the powers and perform the functions of the Assessing Officer of the assessee and to carry out the assessment proceedings and frame the assessment order in accordance with the provisions of the Income tax Act, 1961. TThus, reliance upon the provisions contained in Section 124 of the Act would be of no help to the Revenue a....
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....sFaithfully Sd/- (Jagadish Prasad Jangid) ACIT Cir. 2(3), Mumbai. 3.21 Thus, from the above, it is clear that initially the jurisdiction was with ACIT Cir. 2(3), Mumbai, for passing the assessment order. Subsequently, a notice u/s 143(2) was issued by DCIT Cir. 2(3) dated 1.12.2003 who was indeed successor to the first officer. Subsequently, assessee received a dated 10 th December, 2004 from the Additional CIT range 2(3) Mumbai. Apparently, Commissioner of Income Tax was not successor of ACIT/DCIT who had issued earlier notice. But, the assessee has contended that there is nothing on record to show as to how the Additional Commissioner of Income Tax became AO of the assessee and passed the impugned assessment order. 3.22. Thus, the first issue raised by the assessee before us is that in this case assessment proceedings were initiated by the Assistant Commissioner of Income Tax but were taken over in the middle of the proceedings by the Additional Commissioner of Income Tax and completed by him without there being any valid transfer of jurisdiction from the Assistant Commissioner of Income Tax to the Additional Commissioner of Income tax, as required under section 127 of the ....
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....explained in detail by Hon'ble Delhi High Court in the case of Vaholines Cummins Ltd. (supra). Similar view was taken by the Delhi bench of the Tribunal in the case of Mega Corpn. Ltd. (supra) following the aforesaid judgment of the Delhi High Court. Relevant part of order is reproduced below for the sake of ready reference:- "...... 9. Another contention specifically raised is that there is no transfer order u/s 127 of the Act from transferring the case from the DCIT to the Addl. CIT, Range 6, and New Delhi. The learned CIT(A) has held that hi the cases of transfer of cases to another AO after issue of notice u/s 143(2) of the Act by another AO, the issue involves the interpretation of concurrent jurisdiction which is beyond the scope of this appeal within the restricted directions of the Hon'ble IT AT. He has held that, "in my considered opinion, since both Addl. CIT Range-6 and DCIT Circle-6(l) works as subordinate officer to the same CIT and the CIT having entire territorial jurisdiction, the passing of assessment order by the Addl. CIT after issue of notice u/s 143(2) by the DCIT Circle 6(1) does not affect the taxability of the appellant or appellant is not adverse....
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....atory bail. 30. In the facts of the present case, since the Additional Commissioner had exercised the power of an Assessing Officer, he was required to continue to exercise that power till his jurisdiction in the matter was over. His jurisdiction in the matter was not over merely on the passing of the assessment order but it continued in terms of section 220(6) of the Act in dealing with the petition for stay. What has happened in the present case is that after having passed the assessment order, the Additional Commissioner seems to have washed his hands of the matter and left it to the Deputy Commissioner to decide the stay petition filed under section 220(6) of the Act. We are of the opinion that this was not permissible in law." 9.1 We therefore hold that applying the above judicial position that assessment has to be completed by the authority who has initiated the proceedings for making assessment-and any other authority can take over the proceedings only after a proper order of transfer u/s 127(1) or 127(2) of the proceedings. The revenue has not brought any order for transfer of the proceedings from DCIT, Circle6(l), New Delhi to the Additional CIT, Range- 6, New Delhi and th....
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....ction as per law. 3.24. Next issue raised by the Ld. Senior Counsel was that the Additional Commissioner who had passed the impugned assessment order was not authorized to act as assessing officer of the assessee and pass the impugned assessment order. We analyzed the provisions of law in this regard and find that section 2(7A) defines the term of Assessing Officer as under: "Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or subsection (2) of section 120 or any other provision of this Act, and the Joint Commissioner or Joint Director who is directed under clause (6) of subsection (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act." 3.25. Subsequently, the word 'Additional Commissioner' was also added in the said definition by Finance Act, 2007, with retrospective effect from day 01.06.1994. Thus, from the above, it is clear that when the impugned assessment order was passed....
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....e Chief Commissioners or Commissioners for issuance of orders to the effect that powers and functions of an Assessing Officer for a particular assessee or classes of assessee shall be exercised by a 'Joint Commissioner'. Despite numerous directions, the Revenue was not able to bring before us any order wherein any specific authority was given by any Chief Commissioner or Commissioner authorizing the impugned Additional Commissioner to pass impugned assessment order. We find force in the argument of Ld. Counsel that at the relevant time when the assessment proceedings were in progress, the word 'Additional Commissioner' was not available in the aforesaid section and therefore, it was not possible for the Chief Commissioner or the Commissioner to have authorized an Additional Commissioner for exercising powers and functions of an Assessing Officer for a particular assessee or ".lasses of assessee. Even otherwise, no order could be shown to us, whereby any such authority was given to the Joint Commissioner of the Range. Under these circumstances, we find that the Revenue is not able to show any order or notification in favour of the Additional Commissioner authorizing ....
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.... authorizing in turn the Joint Commissioner of Income tax who are subordinate to them for exercising of the powers and performance of the functions of the Assessing Officers. It also, inter alia, authorizes the Joint Commissioners who were so authorized by the Commissioners, to issue orders in writing to the Officers who are subordinate to them for the exercise of the powers and performance of the functions of the Assessing Officers for specified assessee or class of assessee. Relevant part of the said notification is reproduced as under for the sake of ready reference:- "......(c) authorise the Commissioner of Income Tax referred to in this notification to issue the orders in writing for the exercise of the powers and performance of the functions of the Joint Commissioners of Income tax, who are subordinate to them, in respect of such cases or classes of cases specified in the corresponding entries in column (6) of the Schedule-I and Schedule -II of such persons or classes of persons specified in the corresponding entries in column (5) of the said Schedules, in such territorial areas specified hi the corresponding entries in column (4) of the said Schedules, and hi respect all of ....
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....s appeal relates to the validity of order of assessment dated 29.12.2008 passed by Additional CIT, Range 6, New Delhi. According to the appellant/assessee, it is incumbent under the scheme of statute to vest the Additional CIT u/s 120(4)(6) of the Act to exercise or perform all or any of the powers and functions of Assessing Officer under the Act. 5.1 To examine the above contention, we consider it appropriate to firstly extract section 2(7A) of the Act which reads as under: "2(7A) Assessing Officers (7A) "Assessing Officer" means the Assistant Commissioner or 2Deputy Commissioner 3 or Assistant Director 4 or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (l)or sub-section (2) of Section 120 or any other provision of this Act, and the 6 [Additional Commissioner or] 6 '[Additional Director or] 7 5 Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act;" 5.2 A plain reading of the aforesaid provision woul....
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....der such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply." 5.3 It will be seen that the said provision provides that Board may by general or special order and subject to such conditions, restrictions or limitations as may be specified therein empower the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on or as the case may be, assigned to, Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director and where any order is made under this clause, reference in any other provision of this Act or hi any rule made there under to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or a Joint Director by whom, the powers and functions are to be exercised or performed under such order and any provision of this Act requiring approval or sanction ....
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....uthorized by the Legislature, the Chief Commissioner of Income-tax or Commissioner of Income-tax were duty bound, if at all they were to exercise such delegated power to act according to the provisions of law; meaning thereby that it was incumbent upon the Chief Commissioner of Income-tax or the Commissioner of Income-tax, as the case maybe, if at all they wanted to authorize the Additional CIT to act and perform the functions of an AO, to pass a proper order delegating such functions/powers upon hin This view of ours is fully supported by the decision of the Hon'ble Delhi High Court in the case of Dr. Nalini Mahajan v. DIT [20011 252 ITR 123/r20021122 taxman 897 wherein the Hon'ble High Court, while discussing the powers of Additional Director Investigation, held as under: "It is now well-settled that when a power is given to do a certain thing hi a certain manner, the same must be done in that manner or not at all. A delegation of power is essentially a legislative function. Such a power of delegation must be provided by the statute. The director himself for certain matters is the delegating authority. He, unless the statute expressly states, cannot sub-delegate his power....
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..... Asstt. CIT [2016] 157 ITD 869/67 taxmann.com 109. Relevant part of observations of the Bench is reproduced below:- ".......As regard the contention of the assessee that no order under section 127 was passed by the Commissioner of Income-tax, the revenue has submitted that the Addl. Commissioner of Income Tax was provided concurrent jurisdiction over the cases through the order of the Commissioner of Income tax and, therefore, no separate order under section 127 was required to be passed by the Commissioner of Income tax. However, no such order of the Commissioner of income tax conferring the concurrent jurisdiction to the Addl. Commissioner of Income Tax over the cases of the Income tax officer is either available on assessment record, or was produced by the revenue. Thus, in absence of any such order, it can't be established that said assessment order passed was within the jurisdiction of the Addl. Commissioner of Income Tax. Thus, the assessment completed, by Additional Commissioner of Income Tax in the case being without jurisdiction, is void ab initio. Accordingly, the ground of appeal of the assessee is allowed." 3.37. In the case ofBindal Apparels Ltd. (supra), Del....