TaxTMI 
TaxTMI 
2023 (3) TMI 1496
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....sed additional ground No. 12 (original and additional grounds in concise form filed by the assessee on 19.10.2022) in ITA No. 1605/Mum/2012 for A.Y. 2006-07 wherein it had raised a jurisdiction issue stating that the ld. Additional CIT who had passed the assessment order was not conferred jurisdiction and cannot perform the functions of the Assessing Officer in the absence of an order issued to him u/s. 120(4)(b) of the Act. 3. Since this issue goes to the root of the matter, we deem it fit to address this additional ground. The ld. DR before us vehemently submitted that this additional ground is a pure factual issue and hence cannot be admitted at the stage of tribunal. We find that the very jurisdiction of the ld. AO to frame an assessment is being challenged by the assessee before us. In other words, the ld. AO who passed the assessment order had valid jurisdiction to frame the assessment of the assessee for the year under consideration is in challenge before us. This in our considered opinion, is purely a legal issue because the jurisdiction of the ld. AO has to be determined as per the provisions of the Act. Hence it cannot be a factual issue. Since the additional ground is....
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....120 or any other provision of this Act, and the Additional Commissioner_or_Additional_Director of Joint Commissioner 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;" 6. From the aforesaid definition of the Assessing Officer, we find that the same clearly provides that for an Additional CIT or JCIT to exercise or perform all or in all the powers and functions conferred on are assigned to the Assessing Officer, an authorization u/s. 120(4)(b) of the Act is required mandatorily. For this purpose, it would be relevant to reproduce the provisions of Section 120 which speaks about 'jurisdiction of income tax authorities' as under:- "Section 120 (1) - Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities. Explanation.-....
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....to authorise the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director to perform the functions of the Assessing Officer by issuing orders in writing separately u/s. 120(4)(b) of the Act. This independent order u/s. 120(4)(b) is mandated in statute itself which alone would confer jurisdiction of Addl. CIT or JCIT to perform the functions of the Assessing Officer under the Act. In the absence of any independent order passed u/s. 120(4)(b) of the Act, the Addl. CIT or JCIT could not be considered as Assessing Officer as defined u/s. 2(7A) of the Act at all. In addition to this, there should also be a separate transfer order transferring jurisdiction from ACIT to Addl. CIT / JCIT in terms of Section 127 of the Act. This can be either by way of a general order or by way of a special order in writing. 8. The ld. DR submitted that para 2 of the assessment order very clearly states that the case is assigned to Additional Commissioner of Income Tax (Additional CIT in short) for framing of assessment. That assignment constitutes notification passed u/s 120(4)(b) and transfer of jurisdiction u/s 127 of the Act. The order / notification passed u/s 120(4)(b)....
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....kin to the orders u/s 120(4)(b) or u/s 127 or there is any lacuna in it). (Para 5 ) The question involved in the additional grounds goes to the root of the matter and challenges the sustainability of the assessment order passed by an authority which is not competent to perform the functions of an Assessing Officer as per the Act. Therefore the jurisdictional issue is a pure question of law and deserves to be admitted. A similar argument urged by the Department, has been dealt by the ITAT n the following cases while admitting similar additional grounds as that in the present case > Tata Sons Ltd. (ITA No. 4497/Mum/2005) (Para 3.12 & 3.13, Pg. 9) > Tata Communication Ltd. (ITA No. 7071/Mum/2005) (Para 6, Pg. 7, Para 18, Pg. 46) > Tata Communication Ltd. (ITA No. ITA No. 2891/Mum/2010 & ITA No. 1015/Mum/2010) (Para 3.3 Pg.9), etc. In rebuttal to the Ld. DR's contention, the Appellant wishes to submit that the requisite documents required for establishing legal authority of the Assessing Officer are expected to be available in the assessment records and thus, it is not a case where verification of fresh facts is required. In any case, in order to ch....
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....le Tribunal in the interest of justice and oblige. 2. There exists notifications of the Board and order of the CIT-1, Thane, giving power of the Assessing Officer to the jurisdictional Addl. CIT/JCIT a) There exists order of CIT-i, Thane assigning the impugned case of AY 2009-10 and AY 2010-11 to the Addl. CIT - Range-1, Thane dated 22 July 2013 (Para 4.1) These new arguments were not taken by the ld. DR in the course of physical hearing before the Hon'ble Bench and are placed before the Hon'ble Tribunal only by way of this written submission Assignment order pertains to AY 2009-10 as well.) The Ld. DR has relied on the assessment order for AY 2010- ii wherein there is a mention of the assignment order by the CIT to the JCIT. However, the Ld. DR has failed to produce any such order before the Hon'ble Tribunal despite repeated requests by the Appellant and opportunities granted by the Hon'ble Bench. Further, the Ld. DR has mentioned that the aforesaid assignment order dated 22 July 2013 is for both the assessment years i.e. AY 2009-10 and AY 2010-11. However, the draft and the final assessment order u/s 143(3) for AY 2009-10 nowhere refers to this assign....
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....equires 2 different orders to be passed under those 2 sections. Be that as it may, the fact remains that not a single order - whether order u/s 120(4)(b) or an order u/s 127 or the assignment order passed by CIT-i, Thane has been produced by the Ld. DR in the instant case and in absence of the same, there can be no question of presuming anything about the assignment order. Further, the Ld. DR has completely erred in stating that the Appellant has not challenged the assignment order (which should be presumed to be passed u/s 120(4)(b) and u/s 127 as per the Ld. DR) and that by challenging the absence of orders u/s 120(4)(b) and u/s 127, the Appellant is only challenging the form and not substance. When the Ld. DR has not been able to produce any order whatsoever from the assessment records, the arguments relating to form and substance are of no relevance. d) Amendment to S. 2(7A) was clarificatory in nature, JCIT definition u/s 2(28C) always included 'Addnl. CIT as well and reliance placed on Notifications dated 31.07.2001 and 17.09.2001 alongwith assignment order by the CIT-1, Thane (Para 7,8,9) The Appellant humbly submits that the arguments and the Board notification....
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....aforesaid decision are reproduced hereunder: "4. We would first deal with the question of jurisdiction of the Assessing Officer. We notice that Section 2(7A) of the Act defines the term "Assessing Officer" as to mean every Revenue Officers mentioned therein. Reference to "Additional Commissioner" in the list of such officers was included by an amendment made under Finance Act, 2007 but with retrospective effect from 1.6 .1994. Thus, by virtue of this amendment, an Additional Commissioner of Income Tax was included in the definition of "Assessing Officer". It is true, as pointed out by the learned counsel for the assessee that when the Additional Commissioner passed the order of assessment, Section 2(7A) did not contain a specific reference of an Additional Commissioner. However, when the statute has been amended with retrospective effect, the effect of such amendment must be applied to the pending proceedings as in the present case. Non-applying such amendment in the present proceedings would destroy the retrospectively granted to it by the legislature. This contention of the assessee is, therefore, rejected." 5.2. In the present case, the Appellant is not objecting to ....
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....y try to ascertain the true principle laid down by the decision of the Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by the Court, to support their proceedings. 5.6. In light of the above ratio, the Appellant submits that since the question involved in N. Rajgopal (supra) was not similar to the present case, the principle laid down by the Hon'ble High Court therein is limited to the question involved therein (i.e. that the Addnl CIT can be considered as an Assessing Officer retrospectively from 1 June 1994) and not beyond the issues which were not raised/challenged before the Court. The Appellant submits that since the arguments and contentions raised by the Appellant in the instant case were not before the Hon'ble Bombay High Court, the ratio of N. Rajgopal (supra) has no application to the case of the Appellant. 5.7. The Appellant reiterates that the Addnl. CIT/JCIT can be considered as an Assessing Officer u/s 2(7A) of the Act only when he is directed to do so vide specific order issued in writing u/s 120(4)(b) of the Act which have not been produced in the instant case. Hence, the rel....
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.... business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Principal Director General or Director General or the Principal Chief Commissioner or Chief commissioner or the Principal Commissioner or commissioner; or where the question is one relating to areas within the jurisdiction of different Principal Directors General or Directors General or Principal Chief commissioners or Chief Commissioners or Principal Commissioners or Commissioners, by the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners concerned or, if they are not in agreement, by the Board or by such Principal Director General or Director General or Principal Chief Commissi....
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....ssing Officer as defined under the Act or No. When the Addnl CIT/JCIT is not an 'Assessing Officer' as per S. 2(7A) of the Act in the first place, then the provisions of section 124 become inapplicable at this point itself. For S. 124 to apply, jurisdiction i.e. authority under law to perform the functions of an Assessing Officer must be conferred correctly on an officer in the first instance. Without the sanction as per law, the Addnl. CIT/JCIT cannot be called as an Assessing Officer and accordingly, such challenge to inherent jurisdiction can be made at any time by the Appellant and the time stipulated u/s 124(3) cannot apply to such cases where there is lack of jurisdiction. In cases where there is complete lack of jurisdiction, procedural limitations such as S. 124(3) should not hinder the objections to jurisdiction, which goes to the very root of the matter. 6.5. Without prejudice to the above, a bare perusal of the above provisions of section 124 show that the said provisions cover the aspect of jurisdiction of an Assessing Officer only with respect to his 'territorial jurisdiction'. The sub-sections (i), (2) and (s), all make a reference to the jurisdicti....
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....ns of the Income tax Act, 1961. Thus, reliance upon the provisions contained in Section 124 of the Act would be of no help to the Revenue as the assessee has not challenged either territorial jurisdiction or irregular exercise of jurisdiction by the Additional Commissioner of Income Tax but challenge was made to the authority and legal competence itself of the Additional Commissioner of Income tax to pass the impugned assessment order upon the assessee." > Tata Communication Ltd. ITA No. 7071/Mum/2005: "18... A plain reading of section 124 would show that it refers to an order issued under sub-section (i) or (2) of section 120, whereas we are concerned with an order purported to be passed under section 120(4)(b) empowering the Addnl. CIT to act as an Assessing Officer. Therefore, in our view the provisions of section 124 are not applicable to the present case." >Tata Sons Ltd. ITA No. 193/Mum/2006: "16. We also noted that the Gujarat 1-ugh Court in the case of Ramesh D Patel (supra), while dealing with a similar issue, we noted that at page 496 under last but one paragraph held as under: "9. Thus, section 124 of the Act pertains to the t....
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....ts the action of the AO is without authority of law and therefore wholly without jurisdiction." 6.9. The Appellant wishes to submit that the Hon'ble Jurisdictional Tribunal in the case of Tata Sons Limited vs. ACIT (ITA No. 193/Mum/2006 & Ors) (Refer Pg. 75 to 125 of the COJ) has considered the decision of the Mega Corporation (supra) and held that Section 124 has no application in similar facts as that of the instant case. The relevant paragraph where the said issue has been adjudicated is reproduced below for ready reference - "15... No doubt there the assessee has relied on the decision of Delhi Bench in the case of Principal CIT vs. Mega Corporation but relying on a particular decision does not mean that his additional ground be decided by us. We have gone through the decision of Delhi High Court in the case of Mega Corporation Ltd. (supra) and noted that various High Courts have taken a contrary view on this issue, as under: CIT vs. Ramesh D Patel [362 ITR 4931 (Guj) Prashant Chandra vs. CIT81 taxmann.com 1o6 (Allahabad) Elite Pharmaceuticals vs. ITO [242 Taxman 3451 (Cal) 16. We also noted that the Gujarat High Court in the ....
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....n the court has to adopt that interpretation which favours the assessee, more particularly 6.10. Further, the Hon'ble Mumbai Tribunal in various other judicial precedents has consistently followed this view established in Tata Sons (supra) and has distinguished the decision of Hon'ble Delhi High Court in the case of Mega Corporation (supra) as listed below - > Tata Communication Ltd. (MA order)- MA No. 785/Mum/2017- Para 3, 4 and 5 (Pg No. 3 to 5) > Tata Sons Ltd. ITA No. 193/Mum/2006- Para 17 (Pg No. 28-29) > Kishore Vithaldas ITA No. 5661/Mum/2017 & ITA No. 7397/Mum/2016- Para 16 (Pg No. 48) > Tata Communications Ltd ITA No. 7514/Mum/2011 & Ors- Para 4 (Pg No. 5), etc. 6.11. Attention is also invited to the decision of Hon'ble Mumbai Tribunal in the case of a Miscellaneous Application filed by the Department against the decision of Hon'ble Tribunal in case of Tata Communication Ltd vs. Addnl. CIT (ITA No. 7071/Mum/2005) wherein the decision of Hon'ble Delhi Tribunal of Mega Corporation Ltd. vs. Addnl. CIT (ITA No. 102/Del/2014) was considered which was subsequently reversed by the Hon'ble Delhi High Court in case o....
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....is written submission 4 Existing Hon'ble ITAT decisions, on the issue, cannot be followed as these are per incurium or sub-silentio. (Para 15 to Para 15.9) These new arguments were not taken by the ld. DR in the course of physical hearing before the Hon'ble Bench and are placed before the Hon'ble Tribunal only by way of this written submission The Appellant humbly submits that during the hearing before the Hon'ble Bench, the Ld. DR forward this contention. The main contention of the Ld. DR here is that Delhi High Court's decision in the case of Mega (supra) has not been considered/followed by the Mumbai ITAT decisions. In this regard, please refer to submissions in para 5 and 6 below regarding the aforesaid High Court decisions to the facts case. Further, the Ld. DR has mentioned that the order of Tata Sons Ltd (ITA No. 4497/Mum/2005) has been challenged before the Hon'ble Bombay High Court and the Hon'ble High Court has admitted Question of law vide order dated 2022. In this regard, the Appellant submits that 9 March the Hon'ble High Court has not stayed the operation of the order of the Hon'ble Mumbai Tribunal in Tata Sons (....
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....t case while the assessment proceedings u/s. 143(3) of the Act was initiated by issue of notice u/s. 143(2) of the Act by the ACIT, the draft and final assessment orders for both A.Yrs. 2009-10 and 2010-11 were passed by the Addl. CIT / JCIT without any independent order u/s. 120(4)(b) u/s. 127 of the Act. From the chronology of events, reproduced supra, we find that assessee had repeatedly asked the ld. AO to produce such orders passed u/s. 120(4)(b) and u/s. 127 of the Act passed, if any. Despite giving sufficient time to the ld. DR to produce those orders, no such orders were produced by the ld. DR before us for both the assessment years. We find under similar facts and circumstances, this Tribunal had indeed admitted the additional grounds raised by the assessee after a long gap of 10 years or 15 years, as the case may be, and adjudicated those additional grounds and allowed the assessee's appeal by quashing the assessments framed for want of orders u/s. 120(4)(b) and u/s. 127 of the Act in the following cases:- a. Decision of Mumbai Tribunal in the case of Tata Sons Ltd., in ITA No. 4497/Mum/2005 dated 31/10/2006 reported in 162 ITD 450. b. Decision of Mumbai....