TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 788
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....12 respectively for the A.Yrs. 2007-08, 2008-09 & 2009-10 respectively. ITA No.1910/Mum/2014 (A.Y.2009-10) (Revenue Appeal) This appeal in ITA No.1910/Mum/2014 for A.Y.2009-10 preferred by the order against the final assessment order passed by the Assessing Officer dated 20/01/2014 u/s.143(3) r.w.s.144C(13) of the Income Tax Act, hereinafter referred to as Act, pursuant to the directions of the ld. Dispute Resolution Panel (DRP in short) u/s.144C(5) of the Act dated 31/12/2013 for the A.Y.2009-10. Since identical issues are involved in all these appeals, all these appeals are taken up together and are being disposed off by this consolidate order for the sake of convenience. ITA No.8570/Mum/2011 (A.Y.2007-08) 2. We find that assessee has raised 29 original grounds of appeal before us. Apart from this, we find that assessee has raised additional grounds vide letters dated 17/09/2018 and 15/03/2019. It would be relevant to address the preliminary issue of validity of framing of assessment by the ld. Additional Commissioner of Income Tax, Range 2(2) in the instant case. For this, the assessee has raised an additional ground No.31 which is reproduced hereunder:- "31. On the facts....
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....rimary facts, it could be safely concluded that both the draft assessment as well as the final assessment orders were framed by the Additional Commissioner of Income Tax, Range-2(2), Mumbai. It would also be relevant to address the following facts that had culminated in the completion of assessment proceedings:- Sr. No. Date Particulars 1. 31/10/2007 Return of income for the Asst Year 2007-08 was filed by the assessee company electronically. This return was filed with ld.Dy. Commissioner of Income Tax, Range 2(2), Mumbai.- enclosed in page 761 of the paper book filed before us. 2. 07/07/2008 Notice u/s.92CA(2) issued by the ld.JCIT (Transfer pricing-II (5), Mumbai) - enclosed in page 762 of the paper book filed before us. 3. 22/07/2008 Notice u/s.143(2) of the Act for Asst Year 2007-08 issued by DCIT-Circle-2(2), Mumbai - enclosed in page 763 of the paper book filed before us. 4. 29/08/2008 Notice u/s.115 WE(2) of the Act issued for the Asst Year 2007-08 in respect of Fringe Benefit Tax (FBT) assessment by ld.DCIT, Circle 2(2), Mumbai- enclosed in page 764 of the paper book filed before us. 5. 19/09/2008 Notice u/s.16(2) of the Wealth Tax Act, 1957 issue....
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....re findings given thereon. 3.3. The ld. DR before us filed written submissions primarily objecting to the admission of additional ground raised by the assessee; placing heavy reliance on the decision of the Hon'ble Delhi High Court in the case of PCIT vs. Mega Corporation in ITA No.128 of 2016 dated 23/02/2017; that assessee had participated in the assessment proceedings before the Additional CIT and had not raised any objection to the assumption of jurisdiction by the Addl. CIT within prescribed time in terms of Section 124(3)(a) of the Act; that the Additional CIT had taken over the role of an Assessing Officer pursuant to the orders given by the ld. PCIT and Central Board of Direct Taxes and that the Additional CIT also is an Assessing Officer holding concurrent jurisdiction over the assessee. 3.4. We find that all these arguments and submissions of the ld. DR have already been considered by this Tribunal in the decision relied upon hereinabove in the case of Tata Communications referred to supra dated 16/08/2019 wherein it was held as under:- "6. We have heard the rival submissions which were done in an elaborate manner by both the parties before us. We have also applied ou....
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....ct, 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 or the Income Tax Officer who is vested with the relevant jurisdiction by virtue of direction or orders issued under sub-section (1) or (2) of Section 120 or any other provision of the Act. The second limb of the provision says, the KIT or JDIT if directed under clause (b) of sub-section (4) of....
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....t 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 section 120. Whereas, as far as Addl. CIT, Addl. DIT, JCIT, JDIT are concerned, they can exercise powers and functions of an Assessing Officer, only, if they are directed to do so under clause (b) of sub-section (4) of section 120. Thus, vesting of power of Assessing Officer on different income tax authorities have been specifical....
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....)(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 section 120(4)(b). As far as notification dated 17th September 2001 of the Board Is concerned, though, it is issued under section 120(4)(b) of the Act, however, it authorizes only the JCIT and JDIT to exercise the powers and function of the Assessing Officer and it is not in respect of Addl. CIT or Addl. DIT. Thus, none of these n....
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....) 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 jurisdiction to frame the impugned assessment order without the authority of law and without there being any order from the Commissioner of Income Tax authorizing him to act as Assessing Officer of the assessee. Under these circumstances, it is' bounden duty of the Revenue to establish legal competence and authority of the officer pa....
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....iction 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. fImmediate 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 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 th....
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....t 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 passed the impugned assessment order was not having any authority issued from the Board or the jurisdictional Commissioner of Income Tax to act as an Assessing Officer and to pass an assessment order in the case of the assessee. He also took us through provisions of section 120 to argue that Additional Commissioner or Joint Commissioner could have exercised the power of an Assessing....
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.... 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 act has never been done. He requested for quashing the assessment order on the ground that same was passed without authority of law and was void ab-initio. 3.20. We have gone through all the facts and circumstances of the case. It is noted by us that for the impugned assessment year; after the return was filed by the assessee, a notice was issued by the ACIT Cir-2(3), Mum bal, dated 5th September 2091, intimating the assessee about change in jurisdiction....
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....ioner 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 officers of different hierarchy, it does not mean char both the officers can simultaneously or jointly work upon the assessment proceedings of same assessee. But it means that both the officers are legally eligible for assignment of jurisdiction of the assessment proceedings of an assessee and, therefore, any one of these officers can be assigned the jurisdiction by the higher authority. But, exercise of the jurisdiction between both the officers shall always be mutually exclusive to each other. If the ....
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..../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 the same work cannot be divided between Concurrent jurisdiction means a subordinate authority can deal with the matter equally with any superior authority in its entirety so that either one of such jurisdictions can be invoked. It cannot be construed as concurrent jurisdiction when one part of the assessment will be dealt with by one superior officer and the other part will be dealt with by one subordinate officer. ..." ............It appears to us quite clearly that there is a distinction between concurrent ex....
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....lhi 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's case from Income-tax Officer, Range-6(2), Kanpur to that officer under section 127(4) of the Act, but so far as present case is concerned, the Revenue has not brought to our notice any order under section 127 passed after 6.8.2002 transferring jurisdiction over the assessee's case from the income-tax Officer, Range 6(2), Kanpur to .the Addl. CIT, Range-6,Kanpur and therefore, the assessment framed by the Addl CIT, Range-,Kanpur irrespective of the fact as to whether he was authorized to perform the functions of an AO or not, ....
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....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 means a person 35 appointed to be an Additional Commissioner of Ihcome Tax Under subsection (1) of section 117." Thus, combined reading of all the above sections makes it clear that prior to amendment mode by Finance Act, 2007, the legislature treated 'Additional Commissioner' and 'Joint Commissioner' differently for the purposes of performing the role as an Assessing Officer, despite the fact that for all the other purposes 'Joint Commissioner' meant Additional Commissioner as well., as per section 2(25C). It is clear from the facts that by way of subsequent ....
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....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 impugned assessment order had inherent powers under the law to act as assessing officer of the assessee and pass the impugned assessment order. 3.28. We have gone through all these Notifications, but do not find any substance in the contention of the Ld. CIT-DR. It IS noted that Notification No.335 is issued merely for assigning jurisdiction to various Commissioners and it is thus of no use to Revenue as far as issue before us is concerned. So for as Notification No.267/2001 is concerned, it reads as follows:- "In exercise of the powers conferred by clause(b) of sub-section (4) of section 120 of the in....
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.... 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 Income Tax under clause (c) of this notification..........." ' 3.31. Thus, in view of the aforesaid notification it becomes imperative on the part of the Revenue to show us that in the case before us, the Additional Commissioner of Income tax, who had passed the impugned assessment order, was duly authorized by the jurisdictional Commissioner to do so. It is noted that any such order would not be available with the Revenue, because even in the notifications discussed above only 'Joint Commissioners' were authorized to perform the role of the Assessing Officers. However, the Revenue is not able to bring before us any order of the Comm....
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....lain 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 Director" Or "Joint Commissioner" or "Joint Director" who is under section 120(4)(b) of the Act to exercise or perform all or any of the powers and functions conferred, on or assigned to an Assessing Officer under this Act. In other words, it is manifest that Assessing officer inter-alia means Additional Commissioner who is directed under section 120(4)(b) of the Act to exercise or perform all or any of the powers and functions conferred on or assigned to an Assessing Officer under the Act. under the Act In other. Words, an Additional Commissioner can only be directed u/s 120(4)(b) of the Act to "Assistant Commissioner" or "Deputy Commissioner" or "Assistant Director" or "deputy Director....
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....der 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(L)/2010 dated 8.12.2010 relying upon its earlier ITA No.744/2004/Lucknow for assessment year 2001-02 decided this issue on the similar lines after considering and following the decision of Hon'ble Delhi High Court in the case of Nalini Mahajan Vs. DIT 257 ITR 123 (Delhi). It is also noted Is decision has also been considered by Delhi Bench in the of Mega Corporations Ltd, supra and relevant portion of the order as discussed therein is reproduced below: - "16.2 From the contents of. the aforesaid provisions, it isq uite clear that so far as Addl. Commissioner is concerned firstly he has been included in the definition of Assessing Officer" given under section 2(7A) of the Act with effect from 1.6.1994 as a resul....
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....o 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 redesignation 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 Joint Director. Consequently, notification dt. 6th Sep. 1989 is not valid in law to the said extent 18.2 So far as the present case is concerned, though we are concerned with the powers of Additional CIT but the proposition of law laid down by the Hon'ble High Court which was, though in relation S to powers of Additional Director (Investigation), is fully applicable to the present 18.3 In view of the aforesaid facts, circumstances and the discussion and following the law laid down by the Hon'ble De/hi High Court in the case of Dr. Na/ii Mahajan (supra), first of all we are of the opinion that the Addl. CIT, Range-6, Kanpur having not been empowered to exercise or perform the powers or functions of an Assessing Officer, the ass....
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....mmissioner 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 the assessment order has been passed by an officer of the rank of Additional Commissioner which is much superior to the rank of Assistant Commissioner and thus no prejudice-can be presumed to have been done to the assessee. We find that reasoning given by the Ld. CIT-DR to defend the impugned assessment order does not have any legal force. It is well settled that jurisdictional conditions required to be fulfilled by the assessing officer must be performed strictly in the manner as have been as prescribed and if it has not been done in the manner under the law. then it becomes nullity in the eyes Hon'ble Supreme Court in the case of CIT Vs. M. H. Ghaswala observed that it is a normal rule of construction that when a statue vests certain powers in an authority to be exercised in a particula....
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....early 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 Officer to pass the impugned assessment order. Accordingly, the impugned assessment order passed being wholly without jurisdiction is void ab initio, hence, deserves to be annulled / quashed. Accordingly, we do so. 17.At this stage, we must deal with the contention of the learned Departmental Representative to restore the matter back to the file of the learned Commissioner (Appeals) for adjudicating the jurisdictional issue. We do not find any valid reason to accept the contention of the learned Departmental Representative. As stated earlier by us, exercise of jurisdiction by the Addl. CIT has to be examined on the basis of notification / orders passed under section 120(4)(b), inasmuch as, n 127(1) of the Act. In this context, learned Departmental representative has relied upon certain notifications to justify th....
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.... the Ld. DR. Ld. DR relied upon Hon'ble Delhi High Court decision in the case of Pr. CIT Vs. Mega Corpn, Ltd in ITA No. 128/2016 vide order dated 23.02.2017 and submitted that the ITAT, while deciding the issue in the case of TATA Sons Ltd., has relied upon the decision of ITAT Delhi in the case of Mega Corporation (supra), but said decision of the ITAT has been reversed by the Hon'ble Delhi High Court and held that once an order is passed u/s 120 (1) and (2) by virtue of Sec. 2(7A) of the Act, then there is no requirement of separate order u/s 120(4)(b) of the Act. We find that the matter before the Hon'ble Delhi High Court in the said case was whether the DCIT who passed the assessment order was having valid jurisdiction / authority in absence of separate order u/s,120(4)(b) of the Act. The Hon'ble High Court, in light of the provisions of Sec. 2(7A) of the Act, the definition of the A.O and order u/s 120 (1) & (2) of the Act, came to the conclusion that the definition of A.O includes DCIT and hence once an order u/s 120 (1) & (2) of the Act, is on record authorizing the A.O to act as an A.O, then there is no requirement of separate order u/s 120(4)(b) of the Act.....