TaxTMI 
TaxTMI 
2020 (1) TMI 646
X X X X Extracts X X X X
X X X X Extracts X X X X
....TA No.3460/Mum/2011 for A.Y.2005-06 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-15, Mumbai in appeal No.CIT(A)-15/IT 216/08-09 dated 11/03/2011 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 31/03/2008 by the ld. Additional Commissioner of Income Tax, Range - 1(3),Mumbai (hereinafter referred to as ld. AO). ITA No.8768/Mum/2010 (A.Y.2006-07) - Assessee Appeal This appeal in ITA No.8768/Mum/2010 for A.Y.2006-07 preferred by the order against the revision order of the ld. Addl. Commissioner of Income Tax, Range1(3), Mumbai u/s.263 of the Act dated 22/10/2019 for the A.Y.2006-07. CO No.15/Mum/2018 (A.Y.2005-06) -(Cross Objection of Revenue This Cross Objection No.15/Mum/2018 for A.Y.2005-06 arises out of the ITA No.3460/Mum/2011 on the additional grounds raised by the assessee against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 31/03/2008 by the ld. Additional Commissioner of Income Tax, Range - 1(3),Mumbai (hereinafter referred to as ld. AO). First let us take up the appeals for the A.Y.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Income tax indeed had jurisdiction to pass the said order under section 143.(3), in view of Notification (a) S.O 732(E) - Notification No.228/2001 [F No. 187/5/2001 - ITA-1] dated 31/07/2001 of CBDT, red with (b) Notification dated 01/08/2001 issued by the Commissioner of Income Tax, City-1, Mumbai read with (c) Notification dated 08/08/2001 issued by the Addl Commissioner of Income T ax, Range 1(3), Mumbai. (ii) On the facts and circumstances of the case and in law, it is denied that the Addl.Commissioner of Income Tax lacked jurisdiction to exercise powers and functions of Assessing Officer since he was duly empowered u/s 120(b) (4) to perform functions of Assessing Officer by the CBDTs Notification in S.O 889(E) -NotificationNo.267/2001 [F.No. 187/5/2001 -ITA-1] dated 17/09/2001. (iii) On the facts and circumstances of the case and in law, reliance placed by the assessee on the decision in the case of M/s Mega Corporation Ltd. Vs. Addl CIT (ITA No.l02/Del/2014) dated 22/09/2015 in which the ITAT held that Addl. Commissioner of Income-tax had not been empowered to perform the duties of the Assessing Officer as per the CBDT's Notification No. 267 of 2001 date....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l grounds raised by the assessee are purely legal and jurisdictional issues and can be decided on the basis of facts available on record and there is no requirement to investigate into new facts in the light of the decisions of Hon'ble Supreme Court in the case of Jute Corporation of India Ltd. vs. CIT reported in 187 ITR 688; Hon'ble Supreme Court in the case of CIT vs. NTPC Ltd. reported in 229 ITR 383 (SC) and Hon'ble Jurisdictional High Court in the case of CIT vs. Pruthvi Brokers and Shareholders reported in 349 ITR 336 (Bom), among others. 5.1. At the instance of the bench, the ld. DR filed the following written submissions clarifying the queries raised by the bench as a matter of abundant caution:- 6. We have heard the rival submissions and perused the materials available on record. We find that the following documents filed by the assessee in the paper book require crucial consideration to understand the background of the case, a. Page No.1 of the paper book contains a certificate issued by DCIT - 1(3), Mumbai in proceedings No.DCIT-1(3)/Cert./2005-06 dated 23/09/2005 certifying that he is the Assessing Officer of the assessee. b. Page No.2 of the pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essing Officer". Thus, in this context, facts / material which require examination are the statutory notices issued under section 142(1) / 143(2) by the concerned Assessing Officer and the relevant notifications conferring jurisdiction upon the DCIT / Addl. CIT to act as an Assessing Officer of the assessee. Since the statutory notices issued under section 142(1) / 143(2) are already part of the assessment record and the notifications conferring power on the concerned officer to act as an Assessing Officer of the assessee are part of the Department's record they do not require investigation into fresh facts. In any case of the matter, the issues raised by the assessee in the additional / supplementary additional ground are purely legal and jurisdictional issues going to the root of the matter as it affects the very jurisdiction of the Addl. CIT in proceedings with the assessment and completing it. That being the case, assessee can raise such issue at any stage. Merely because assessee participated in the assessment proceedings, that will not make the assessment order sacrosanct, if the assessee can otherwise prove that the officer completing the assessment had no authority / jurisd....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dl. CIT was not an Assessing Officer within the definition provided u/s 2(7A) of the Act as it stood at the relevant time. He submitted, Addl CIT was included within the definition of 'Assessing Officer' u/s 2(7A0 of the Act by the Finance Act, 2007, with retrospective effect from 1st June 1994. However, the Addl CIT can exercise / perform power of an Assessing Officer only if he is directed under clause (b) of sub-section (4) of section 120 of the Act. The ld AR submitted by virtue of amendment brought to section 2(7A) of the Act by Finance Act 2007 , corresponding amendment was also made to section 120(4)(b) of the Act with retrospective effect from 1st June 1994 by vesting jurisdiction of Assessing Officer on the Addl. CIT , if the Board by virtue of general or special order authorizes / empowers the Director General of Income Tax (DGIT) or Chief Commissioner of Income Tax (CCIT) or Commissioner of Income Tax (CIT) to issue orders vesting the powers of Assessing Officer on the Addl CIT. The ld AR submitted that in case of assessee, there is no such notification issued by the Board u/s 120(4)(b) of the Act, by virtue of which the Addl CIT was vested with jurisdiction to act as an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court in the case of Hatkesh Co-operative Housing Society Ltd vs ACIT in ITA No. 328/2014 dated 22.8.2016 stated that the decision of one division bench of tribunal is binding on another division bench of tribunal. Accordingly, he vehemently submitted that the assessment order passed by the ld Addl. CIT being without jurisdiction should be quashed. 5.2. The ld. DR submitted, the additional ground raised by the assessee is not maintainable as the issue of jurisdiction can only be raised under section 124 of the Act. In support of such contention, the ld. DR relied upon the following decisions:- i) CIT v/s British India Corp. Ltd. [2011] 33 ITR 64 (All.); ii) ACIT v/s Punjab Urban Development Authorities, [2014] 42 taxmann.com 160 (Chandigarh); iii) Subhash Chander v/s CIT, [2008] 218 CTR 191 (P&H). 5.3 The ld. DR referring to the provisions contained under section 2(7A), 2(28C), 2(1c), 116(cc), 117, 118, 119, 120, 124, 127 of the Act and various other provisions of the Act emphasized that the term "Assessing Officer" would include Addl. CIT. He further submitted, as per section 2(28C) of the Act, the JCIT would also include Addl. CIT sin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to pass the assessment order. He further submitted, while coming to their conclusion, the Tribunal has not properly interpreted statutory provisions. In this context, drawing the attention of the Bench to the amendment made to section 2(7A) of the Act including Addl. CIT as an Assessing Officer by Finance Act, 2007 with retrospective effect from 1st July 1994, he submitted that the intention of legislature being clear no interpretation is required. The ld. DR submitted, plain reading of section 120 as a whole would demonstrate that CCIT / CIT, is not the only authority who can issue orders empowering Addl. CIT to act as an Assessing Officer. The ld. DR though fairly admitted that to his knowledge there is no order under section 127 of the Act passed by the CIT transferring jurisdiction of the assessee from the DCIT to the Addl. CIT. However, he submitted that there is no necessity for such an order under section 127 of the Act as both the officers enjoyed concurrent jurisdiction. He submitted, instead of an order under section 127 of the Act arises only when the officer to whom the case is to be assigned does not have extant jurisdiction over the case. He submitted, since in the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....epartment has failed to produce any order conferring Addl. CIT with jurisdiction of an Assessing Officer, whether exclusive or concurrent. The ld. AR for the assessee submitted, the reliance of the Department to the provisions contained under section 124 of the Act to argue that the assessee can challenge the jurisdiction under the said provision is unacceptable as section 124 of the Act applies only where directions are issued under sub-section (1) or (2) to section 120 of the Act. The ld. AR for the assessee submitted that all these arguments / contentions raised by the Department have been dealt with and decided against them in a series of decisions of the Tribunal including the decisions rendered in the Tata Sons Ltd. (supra) and Mega Corporation ltd. (supra). Therefore, as far as the assessee is concerned, the issue stands fully covered in its favour. The ld. AR submitted, the contention of the ld. DR to set aside the issue to ld. CIT(A) should not be accepted because in case of Mega Corp. ltd. (supra) both the parties had agreed for set aside. However, in the present case, since the relevant notifications relied upon by the Department are already on record, no further examina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e certain provisions of the Act. The expression "Assessing Officer' has been defined under section 2(7A) of the Act. The aforesaid provision as it existed during the relevant period is extracted hereunder for convenience: Definitions 2. In this Act, unless the context otherwise requires, - (1) ......... (2) .......... (7A) "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 subsection (1) or sub-section (2) of sect/on 120 or any other provision of this Act, and the Additional Commissioner or Additional Director or 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. 14. A plain reading of the aforesaid provision makes it clear that it is in two parts. First limb of the provision says, the Assessing Officer would include ACIT or DCJT or Asstt. Director or Dy. Director o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... iv) Notification no.267/2001 dated 17.09.2001 15. At this stage, we propose to deal with each of the aforesaid notification relied upon by the Department to establish the valid exercise of jurisdiction as an Assessing Officer by the Addl. CIT. The first notification being notification no.228 of 2001 dated 31st July 2001, corresponding to notification no. S.O. 732(E) dated 31 July 2001, is a notification issued under sub-section (1) and (2) of section 120 of the Act and obviously is not a notification issued under clause (b) of sub-section (4) of section 120. As observed earlier by us, the Addl. CIT was not included as an Assessing Officer either under section 2(7A) or under section 120(4)(b) earlier. Only by virtue of Finance Act, 2007, the aforesaid provisions were amended by including Addl. CF as an Assessing Officer. However, even after such inclusion of Addl. CIT as Assessing Officer with retrospective effect from 1st April 1994, Section 2(7A) made it clear, Asstt. CIT, DCIT, ADIT, DDIT, ITO, can act as an Assessing Officer if they are vested with relevant jurisdiction by virtue of directions and orders issued under sub-section (1) or sub-section (2) of secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2001, can be said to have conferred the jurisdiction of assessing officer on Addl. CIT. In this context, it is necessary to deal with the argument of the Department that as per the definition of JCIT under section 2(28C), it includes Addl. CIT, therefore, the notification dated 17th September 2001, issued under Section 120(4)(b) also covers the Addl. CIT. We are not convinced with the aforesaid submissions of the Department. Had it been the intention of the legislature to treat the Addl. CIT as JCIT and, in turn, as Assessing Officer under section 2(7A) r/w section 120(4)(b), there was no necessity to amend the provisions of section 2(7A) and 120(4)(b) specifically including the Addl. CIT and Addl. DIT, since JCIT and JDIT were already included as Assessing Officer under both the provisions. This clarifies the intention of legislature in not treating JCIT and Addl. CIT as one. Thus, the Department has failed to bring to our notice any notification issued in conformity with section 120(4)(b) empowering the Add!. CIT, Range-1(3), to act as an Assessing Officer in respect of present assessee. The notifications relied upon by the learned Departmental Representative are not under secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat these decisions of the Tribunal have been rendered more or less on identical facts and issues and after considering the very same notifications relied upon by the learned Departmental Representative in the present case and the Tribunal has ultimately concluded that in absence of a valid notification under section 120(4)(b) the Addl. CIT cannot exercise power of an Assessing Officer. In this context, it is necessary to reproduce the observations of the Bench in the case of Tab Sons Ltd. (supra) hereunder:-. 3.11. Admission of Additional Grounds: The assessee has challenged legal competence of the Additional Commissioner of Income Tax to act as an Assessing Officer of the assessee and to pass the impugned assessment order by way of additional grounds. The issue raised by the assessee goes to the root of the matter and seeks to shake the very sustainability of the impugned assessment order in the eyes of law. During the course of hearing, it was shown by the Ld. Senior Counsel of the assessee that law in this regard has been developed recently. Moreover, this fact was not in the knowledge of the assessee that the Additional Commissioner of Income Tax had assumed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arried out by the AO to frame the assessment order. it is well settled law that consent of the assessee cannot confer jurisdiction to an assessing officer who lacked jurisdiction under the law. Similarly, vice versa is also true i.e. absence of consent of the assessee shall not take away jurisdiction from an Assessing Officer who actually possessed a valid jurisdiction in the eyes of law. Thus, legal competence of the officer who passed the assessment order as well as validity of the assessment order must be examined on the basis of factual analysis and provisions of law and not on the basis of conduct of the assessee. This issue is not res-integra. Immediate reference in this regard can be made on the judgment of Hon'ble Bombay High Court in the case of Inventors Industrial Corporation Limited Vs. CIT 194 ITR 548 (Bombay). Similar view was taken by Hon'ble Gujarat High Court in the case of P.V. Doshi Vs. CIT 113 ITR 22 (Gui). Recently Hon'ble Delhi High Court handled a similar 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 wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of assessment was with the said officer. Subsequently, notice u/s 143(2) was issued by the DCIT dated 01.12.2003. Thereafter a questionnaire was issued by the Additional Commissioner of Income Tax Range -2(3), Mumbai dated 10th February 2004 and finally the Additional Commissioner of Income Tax framed the assessment order. He took us through the various provisions of Income Tax Act to impress upon the point that Additional Commissioner of Income tax was not legally competent to act as Assessing Officer and to pass assessment orders. He referred to provisions of section2(7A) which provide definition of the term 'Assessing Officer'. He also referred to the provisions of section 2(28C) which defines Joint Commissioner of Income Tax. It was argued that in the definition of Assessing Officer earlier only Joint Commissioner was provided and Additional Commissioner was inserted subsequently. It was further submitted that only those Joint Commissioners/Additional Commissioners were competent to pass the assessment order who were authorized to act an Assessment Officer as per clause (b) of sub-section 4 of section 120. It was vehemently argued that the Additional Commissioner who pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sel of the assessee again took us through all the previous order sheet entries recorded by the bench on earlier dates wherein bench had repeatedly directed and had given opportunity to the department to produce if there Was any order authorizing the Additional Commissioner of Income Tax to pass impugned assessment order, It was further submitted by him that assessee is not challenging territorial jurisdiction of the assessee; but the assessee is challenging legal competence of the officer to pass the impugned Assessment order and it can be done at any stage. Under these circumstances, the restriction provided u/s 124 was not applicable. If the legal competence of the officer is challenged, then it is for the Revenue to establish that the officer was legally authorized to. pass the assessment order. It was lastly argued that case of the assessee was squarely covered in view of various judgment relied upon by the counsel wherein it has been inter alia held that if the law mandates a particular act to be done in a particular manner, then that act should be done by the concerned authorities in that manner alone as has been prescribed under the law, else it shall be deemed that the said....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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 Income Tax Act. In this regard, Ld. CIT-DR was of the view that the Additional Commissioner of Income tax and Assistant Commissioner of Income tax have concurrent jurisdiction over the assessee. In our view, contention of Ld. CIT-DR is not valid as it is not based upon correct appreciation of the law. It appears that Revenue has misunderstood and miss-applied the very concept of concurrent jurisdiction' and has ignored the distinction between the 'concurrent jurisdiction' and Joint jurisdiction'. When we talk about assignment of concurrent jurisdiction' to two officer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 ITAT. He has held that, "in my considered Opinion, since both Addl. CIT Range-6 and DCIT Circle-6(1) 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 adversely affected by the order" The Hon'ble . Delhi High Court in the above context in the case of Valvoline Cummins Ltd. (supra) has held as under:- "28. On the issue of 'concurrent' jurisdiction between the Additional Commissioner and the Deputy Commissioner, learned counsel for the assessee relied upon a decision of the Calcutta High Court in Berger Paints India Ltd. v, Asstt. CIT [2000] 246 ITR 133. The Calcutta High Court had explained the meaning of the expression 'concurrent' to mean two authorities having equal powers to deal with a situation -but....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... stay petition filed Under section 220(5) 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 12 7(2) of the proceedings. The revenue has not brought any order for transfer of the proceedings from DCIT, Circle-6(1), New Delhi to the Additional CIT, Range-6, New Delhi and therefore it is quite evident that the Additional CIT, Range-6 took over the assessment proceedings without there being an order u/s 127(1). In the case of Prachi Leathers Pvt. Ltd. (supra), it has been held as under: 19. We are further of the opinion that the notice under section 143(2) of the Act having been issued by the Income-tax Officer, Range 6(2), Kanpur on 16.8.2002, it was Income-tax Officer alone who could frame the assessment subject however to the fact that that the assessment could be framed by any other officer also provided there was an order of transfer of jurisdiction over assessee'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 (b) of sub-Section (4) of that section to exercise or perform all or any f the powers and functions conferred on, 'or assigned to, an Assessing Officer under this Act." 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, definition of the word 'Assessing Officer' did not include 'Additional Commissioner of Income Tax. It is further noted that section 2(28C) defines Joint Commissioner. Section 2(28C) was available on statute since 01.10.1998 and provide as under: "2(28C) Joint Commissioner means a person appointed to be a Joint Commissioner of Income Tax or an Additional Commissioner of Income Tax under sub-section (1) of section 117. On the other. hand, section 2(1C) defines 'Additional Commissioner' as under: "Additional Commissioner ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 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 classes 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 him for performing the powers and functions of the Assessing Officer of the assessee. 3.27. During the course of hearing, Ld. CIT-DR had drawn our attention upon Board's Notification No.267/2001 dated 17-9-2001, Notification No.228/2001 dated 31.7.2001 and Notification No.335/2001 dated 29-10-2001 with a view to argue that the jurisdiction was assigned to all the Officers including 'Additional Commissioner' for exercise of powers as Assessing Officer, and thus the 'Additional Commissioner. of Income Tax' who had passed the i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 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 C 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 in the corresponding entries in column (4) of the said Schedules, and in respect all of incomes or classes of income. ..(d) authorises the Joint Commissioner of Income Tax referred to in clause (c) of this notification, to issue orders in witing for the exercise of the powers and performance of functions by the Assessing Officers, who are subordinate to them, in respect of such specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, in respect of which such Joint Commissioners of Income Tax are authorised by the Commissioner of I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s under: 2(7A) Assessing Officers 2(7A) "Assessing Officer" means the Assistant Commissioner 2 Deputy 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 [Additional Commissioner or]6 7[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 would show that it is in two parts. The first part provides that Assessing Officer means the "Assistant Commissioner" or "Deputy Commissioner" or "Assistant Director" or "Deputy Director" or "Income Tax Officer" who is vested with the relevant jurisdiction by virtue of directions or orders issued under section 120(1) or 120(2) or any other provision of this Act. The second part provides that Assessing Officer means the "Additional Commissioner" or "Additional Dire....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions conferred on or as the case may be, assigned to, Assessing Officer by or under this Act in respect of any spec/fled 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 in 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 of the Joint Commissioner shall not apply. 54 The position which emerges thus is that an Additional under the Act. He can perform the functions and, exercise the powers of an Assessing Officer only if he is specifically directed under section 120(4)(b) of the Act." 3.33. Similar issue has been decided by the Lucknovv bench of ITAT in the case of Prachi Leather Put. Ltd Vs. Additional CIT in ITA No. 26(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ew of ours is fully supported by the decision of the Hon'ble Delhi High Court in t case of Dr. Nalini Mahajan vs DIE 257 ITR 123,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 in a certain manner, the same must be done in that manner or not at alt 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 to any other authority. In any event, if an authority, which had no jurisdiction to issue such an authorization, did so, the same would be liable to be quashed as ultra vires. Thus, unless and until an amendment is carried out, by reason of the re-designation itself, read with the provisions of the General Clauses Act, the Addl. Director does not get any statutory power to issue authorization to issue warrant. Therefore, the Addl. Director (Investigation) cannot be said to have any power to issue any authorization or warrant to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 of Bindal Apparels Ltd vs. ACIT, Delhi Bench of ITAT took a similar view and held that in view of definition of Assessing Officer contained u/s 2(7A), an Additional Commissioner cannot be an authority to exercise and perform all or any of the powers of the functions of the Assessing Officer to make assessment of Income. The Bench analysed the provisions of Sect/on 2(7A) as it existed prior to amendment made by Finance Act, 2007. 3.38. During the course of hearing, it was also submitted by id. CIT-DR to defend the impugned assessment order that in any case ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t has to be done in that manner only............ 3.40. Thug, in view of the legal discuss/op made above and facts of the case, it is clear that impugned assessment order has been passed without authority of law in as much as Revenue has not been able to demonstrate that the Additional Commissioner of Income tax who had passed the assessment order had valid authority to perform and exercise the powers and functions of an Assessing Officer of the assessee and to pass the impugned assessment order. Under these circumstances, we have no other option but to hold the same as nullity and, therefore, the impugned assessment order is quashed having been passed without authority of law 16. The ratio laid down in the decision of Tata Sons Ltd (supra) and other decisions relied upon by the Bench therein, clearly applies to the facts of the present case. Therefore, adhering to the, principle of judicial discipline we follow the decisions of the Tribunal referred to the above and hold that in the facts of the present case, the Addl. CIT in the absence of a valid order under section 120(4)(b) as well as section 127(1) of the Act could not have exercised powers of on Assessing Of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e allow the additional grounds raised by the assessee challenging the validity of assessment framed by the ld Addl. CIT and accordingly quash the assessment so framed. Since we have quashed the assessment order on legal / jurisdictional issue, the grounds rasied on merits have become infructuous and hence not adjudicated." 6.2. Respectfully following the aforesaid decision, we allow the additional grounds raised by the assessee challenging the validity of assessment framed by the ld Addl. CIT and accordingly quash the assessment so framed. Since we have quashed the assessment order on legal / jurisdictional issue, the grounds rasied on merits have become infructuous and hence not adjudicated. 7. In the result, the quantum appeal of the assessee for the A.Y.2005-06 in ITA No.3460/Mum/2011 is allowed and quantum appeal of the revenue in ITA No.4452/Mum/2011 is dismissed for A.Y.2005-06. CO No.15/Mum/2018 (A.Y.2005-06) 8. We find that the issue raised by the revenue in its cross objections for the A.Y.2005-06 have been dealt with while deciding the quantum assessee's appeal in ITA No.3460/Mum/2011 hereinabove. Therefore, separate adjudication of cross objections of the rev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oceedings have been initiated by one officer and the assessment order is passed by another officer, the assessment order is bad in law and illegal and therefore the impugned assessment orders in the case should be quashed." 9.1. We find that the assessee had raised further additional grounds vide petition for admission of additional grounds dated 17/12/2015 which go to the root of the matter in respect of disallowance made on merits as under:- "1. On the facts and in circumstances of the case and in law, as a consequence of the order of the Hon'ble Tribunal in Appellant's own case for AY 2001-02 (dated July 8, 2015 in ITA No. 4221/M/05) in relation to Ground no. 7 pertaining to payment of lease premium to MMRDA, the Assessing Officer be directed to grant consequential depreciation in the year under consideration, i.e. AY 2006-07, at the rate of twenty five percent under section 32(l)(ii) of the Act. 2. On the facts and in circumstances of the case and in law, in relation to Ground No 4 of the ITA No 7071/M/05 of one of the preceding AY 2002-03 against the disallowance of lease premium paid to CIDCO for use of land at Vashi, Navi Mumbai, pending adjudica....
X X X X Extracts X X X X
X X X X Extracts X X X X
....06 also. Hence, the decision rendered thereon would apply with equal force for A.Y.2006-07 also. Accordingly, we allow the additional grounds raised by the assessee challenging the validity of assessment framed by the ld. Additional CIT and accordingly, quashed the assessment so framed. Since, we have quashed the assessment order on legal / jurisdictional issue, the grounds raised by the assessee on merits both in original grounds as well as in additional grounds have become infructuous and hence, not adjudicated. 10. In the result, the appeal of the assessee in ITA No.8768/Mum/2010 for A.Y.2006-07 is allowed. TO SUM UP:- ITA NO. AY APPEAL OF RESULT ITA No.4452/Mum/2011 2005-06 Revenue Dismissed ITA No.3460/Mum/2011 2005-06 Assessee Allowed ITA No.8768/Mum/2010 2006-07 Assessee Allowed CO No.15/Mum/2018 2005/06 Revenue Dismissed Order pronounced in the open court on this 24/12/2019 ============= Document 1 Commissioner of Income Tax (DR), ITAT-2 'J' Bench, CGO Annexe Building, 7th Floor, Room No. 708, Mumbai - 400 020 Tel: 22073111 No.CIT(DR)ITAT-2/J- Bench/TCL/2019-20 To, The Hon'ble Member....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for AY 2011-12-reg 2005-06 Ref: Letter No. CIT(DR)/ITAT-12/J Bench/2019-20 dated 12.12.2019 Kindly refer to the above. ****** In connection with point (a) of your letter dated 12.12.2019 regarding production of order u/s. 120 of the Act conferring jurisdiction over the above case to Addl. CIT, it is submitted that as per the CBDT's Notification in S.O. 889(E) - No. 267/2001 [F.No. 187/5/2001 - ITA - 1] dated 17.09.2001 the Addl. Commissioner of Income Tax is empowered to exercise powers and functions of Assessing Officer. However, in this case order u/s. 120(1) & (2) of the Act vide No. M-1/Assignment/2007-08 dated 14.06.2007 assigning the case to Addl. CIT, Rg. 1(3), Mumbai was passed. Since, the matter is very old, the copy of the order is not traceable, however, there is ordersheet notings in the file wherein this fact has been mentioned (copy of the same is enclosed for ready reference). 3 Further, with regard to point (b) of your letter dated 12.12.2019 regarding production of order u/s. 127 of the Act transferring the case from DCIT to Addl. CIT who passed the assessment order, it is submitted that in this case the notice u/s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....val, received. 31.03.2006 Refund of Rs.1,06,60,50,615/- issued to assessee. of 25.04.2006 Order u/s 154 passed for short credit of TDS resulting in refund of Rs.21,22,49,496/-. 26.04.2006. Proposal for approval of refund sent to CIT-1,Mumbai. 28.04.2006 Approval received. 28.04.2006 Refund of Rs.21,22,49,496/- issued to assessee. 27.07.2006 Case selected for scrutiny as per scrutiny guidelines given in Central Action Plan for F.Y. 2006-07. Notice u/s 143(2) dt. 27.07.2006 issued 17.08.2006 and served vide speed post on 03.08.2006. Case fixed for hearing on 17.08.2006 at 2.30 pm. S None attended. 29.03.2007 Revised return u/s.139(5) filed declaring income of Rs.5,48,44,39,324/-. 21.04.2007 Proposal u/s 92CA of the I.T. Act, 1961, sent to the CIT-1, Mumbai, for his kind perusal and approval. Sp 30.04.2007 Approved vide letter no. M.1/3/5B/2007-08 dt. 30.04.2007 received. 08.05.2007 Vide letter No. ACIT 1(3)/Transfer Pricing/2007-08 dt. 07.05.2007, the above matter referred to the TPO. 14.06.2007 Vide Order No.M 1/Assignment/2007-08 dated 14/6/07, the case has been assigned u/s 120(1)&(2) to the Addl.CITRg. 1(3), Mumbai....