TaxTMI 
TaxTMI 
2025 (2) TMI 576
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....ent/benamidar of the assessee. 3. The CIT(A) erred in stating that the Assessing Officer had erroneously drawn a presumption u/s 132 (4A) in respect of a third party i.e. assessee with regard to the evidence found in the search in Dalmia group without appreciating the fact that the Assessing Officer analysed the evidences found during that search including dated entries in the accounts "Sh J.Reddy" and "J.R a/c" email and SMS communication between key persons of Dalmia group and of the assessee and a note on capital gains on sale of share of M/s Bharathi Cement Corporation Pvt. Ltd. before coming to his conclusion. 4. The observation of CIT(A) that the addition was not justified because the assessee does not have regular business transactions with Dalmia group is erroneous since existence of regular business transactions between the parties is not mandatory and in the light of the fact that the payments were made on 'quid pro quo' basis as discussed in the assessment order. 5. The CIT(A) erred in granting relief on the ground that there was no corroborative evidence to conclude that the assessee was the beneficiary of Rs. 139.67 cr without appreciating th....
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....after taking into account the value of the shares of M/s Sandur Power Company Ltd. 11. The appellant craves leave to, add to, amend or modify the above grounds of appeal either before or at the time of hearing of he appeal, if it is considered necessary. 3. The brief facts of the case are that the assessee, an individual and Director in a company, filed his return of income for A.Y.2011-12 on 30.09.2011, declaring total income of Rs. 413,36,00,420/-. The case was selected for scrutiny to examine "the reasons and genuineness for high claim of refund out of TDS" and accordingly notice u/s 143(2) of Income Tax Act, 1961 ("the Act") dated 08.09.2012 was issued and served on the assessee on 13.09.2012 by the DCIT, Circle-2(3), Hyderabad. Subsequently, as per action plan of the Board, the case was picked up by the Additional Commissioner of Income Tax, Range- 2, Hyderabad for completion of scrutiny assessment, by virtue of powers of concurrent jurisdiction and accordingly notice u/s 143(2) and specific questionnaire u/s 142(1) of the Act were issued on 03.08.2013. In response, the authorised representative of the assessee appeared from time to time and filed relevant details ....
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.... companies. In response to a specific question, he denied that any lockers are maintained by the group in the name of employees. The Assessing Officer based on the investigation report of Directorate of Investigation, New Delhi, coupled with statements recorded from various employees, observed that during the search action on 27.01.2012 at the residence of Shri Joydeep Basu, Manager(Treasury) of M/s Dalmia Bharat Enterprises Ltd, one pen drive was found and seized. A cloned copy of pen drive was prepared and examined. Extracts of relevant portions of the seized records shown that one account, by name "RumCurrt" was found on pen dive and this file contained "J.Reddy" account, extract of which is reproduced on page 8 and 9 of assessment order. Further, a note on capital gains on shares of Bharati Cement Corporation Ltd. was also found at "Confidential Files" and the same has been reproduced on page 10 of the assessment order. The Assessing Officer had also considered certain e-mail and SMS extracts and the same has been reproduced on page 11 and 12 of the assessment order. A statement on oath was recorded from the employees, in respect of pen drive, where Shri Joydeep Basu admitted t....
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....Bharati Cement Corporation Ltd. to M/s Parficim (Vicat group) for consideration of Rs. 146.54 crores @Rs.671/- per share. The cost of acquisition of shares in the case of Dalmia group is Rs. 95 crores leaving a gain of Rs. 51.54 cr. For tax purposes, after considering indexed cost, the taxable gain (Long Term Capital Gain) arrived at Rs. 30,99,68,666/-. On this amount, tax works out to Rs. 6,86,42,561/- and the same has been rounded off to Rs. 6.87 crores. As this cost has been met out of sale proceeds, the cash in hand after meeting tax liability would be Rs. 139.67 cr., which apparently rounded off to Rs. 139 cr. and the same has been paid to assessee group on various dates recorded in the unaccounted payments in the records of Dalmia group. The entry contained "J.Reddy" means, the amount paid to Mr.Jagan Reddy and this fact is further confirmed by e-mail and SMS correspondence between Dalmia group employees and Shri Vijay Sai Reddy. Therefore, he opined that the shares of Bharati Cement Corporation Ltd. held on paper in the name of Dalmia Bharat Enterprises Ltd. were held only for name's sake and the real owner is the assessee group. As soon as the shares were sold and considera....
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....y Dalmia Bharat Enterprises Ltd. and the shares were sold to third party, M/s Parcifim SAS. The assessee is neither the legal owner of the shares of Bharati Cement Corporation Ltd. nor the beneficial owner. Therefore, the transactions of sale of shares by third party cannot be regarded as transaction of assessee, only on the basis of some documents found from the third party's possession, without any corroborative evidence to prove the allegation that the assessee is real beneficiary of the amount received by Dalmia Bharat Enterprises Ltd. The assessee further contended that the name of the assessee does not appear in the seized papers and neither does the name of Shri Vijay Sai Reddy appear in those documents, which refer to payments made. Further, during the course of assessment proceedings, it was clarified that Mr. Murli has no connection with the assessee and there is no statement of assessee recorded admitting such transactions. Further, even the employees/associates of Mr. Puneet Dalmia have never implicated the assessee, in any manner whatsoever. Although, the Assessing Officer alleged that the shares of Bharati Cement Corporation Ltd. were held in the name of Dalmia Bharat....
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.... question about the contents of the said material and J.Reddy account. Although the statement recorded from the employees contained modus operandi of Dalmia group in handling unaccounted cash and also discussion about the papers contained in the pen drive, neither investigation carried out by the Directorate of Investigation, New Delhi, nor the Assessing Officer has ascertained the nature of entry contained in the said pen drive and also the person to whom the said amount is paid. Further, the papers relied upon by the Assessing Officer including investigation report from Delhi have not been given to the assessee and also no opportunity of cross examination is provided by the Assessing Officer. In the absence of any evidence to link the assessee to the documents found in the possession of Dalmia group and further in the absence of any identification of J.Reddy or JR account in the enquiry, merely on the basis of some documents, it cannot be alleged that the assessee has received sum of Rs. 139 crores, as recorded in the pen drive found during the course of search in the case of Dalmia group. Therefore, directed the Assessing Officer to delete the addition of Rs. 139.67 crores, comp....
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....hra Pradesh and the subsequent sale of shares by Dalmia Bharat Enterprises Ltd. is nothing, but sale of shares of the assessee, as agent/benamidar and therefore, the Assessing Officer has rightly made additions towards profit derived from sale of shares on substantive basis in the hands of the assessee u/s 56(1)(vii) and further towards cost of acquisition on protective basis, because the substantive addition has been made in the name of Bharati Cement Corporation Ltd. The Ld.CIT(A),without considering the relevant facts, simply deleted the additions made by the Assessing Officer. She, therefore submitted that order of the CIT(A) should be reversed and addition made by the assessing officer should be upheld. 10. The learned counsel for the assessee, Shri Vijay Mehta, CA, supporting the order of the Ld.CIT(A) submitted that the Assessing Officer drawn presumption u/s 139(4A) of the Act on the basis of documents found in the third party's possession, without appreciating the fact that the presumptions as contained u/s 139(4A) can be drawn only against a person on whose possession, such documents were found. Further, documents found during the course of search in the Dalmia group a....
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.... 27.01.2012, a pen drive was found in the residence of an employee, which contained an account by name "RumCurrt" and the said account contained the name J.Reddy and JR account against which, certain amount was recorded. The Assessing Officer noted that the said pen drive contained note on capital gains in respect of Dalmia Bharat Enterprises Ltd. towards sale of equity shares of Bharati Cement Corporation Ltd. During the course of search in the case of Dalmia group, statements from various employees of the group and Shri Puneet Dalmia, Managing Director were recorded, and several questions were raised with regard to bank lockers opened by the Dalmia group and unaccounted transactions of cash receipts and cash payments to various persons/entities. However, there is no single question, in respect of the documents and account by name "RumCurrt" claimed to have found in the pen drive seized from the residence of one employee. Similarly, there is no question from any employee with regard to JR account. The statement recorded from employees were confronted to Shri Puneet Dalmia, Managing Director of Dalmia Group and also raised a question about the account by name J.Reddy and JR account....
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....ies or question or reference in the statements to these people that are not subject matter of this appeal. A statement recorded before the Delhi Investigation Wing do not contain any question with respect to the identity of the person behind the accounts as J.Reddy or JR accounts. This person/entity, JR or J.Reddy was never identified by the employees of Dalmia group as recorded in the pen drive. Further, a direct question, in this regard was put forth to Puneet Dalmia, in the statement recorded u/s 131 of the Act on 17.01.2012, where he denied that he knows any person, J.Reddy and further, although subsequently, once again statements were recorded from various employees, but none of them identified the assessee as a person, J.Reddy, whose account is found in the pen drive consisting parallel cash book of Dalmia group. Therefore, based on the investigation report, coupled with statements recorded by the Investigation Wing, Delhi from various persons present during the search proceedings in the case of Dalmia group, nothing or no evidence was brought on record to implicate the transactions recorded in the so called pen drive to the assessee. Further, although the Assessing Officer h....
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.... in the Dalmia group during the course of search and the contents have been cloned during the search proceedings. The Assessing Officer could not link the said documents to the assessee either by way of any corroborative evidence or from the statement of the employees recorded during the course of search. Therefore, merely on the basis of suspicion or surmises, the presumption as contained in section 132(4A) cannot be drawn against the assessee, when such documents were not found in the possession of the assessee or seized from the assessee during the course of search. In our considered view, a cardinal principle of taxation that suspicion, however, strong cannot take the place of evidence and this principle is supported by the decision of Hon'ble Supreme Court in the case of CIT Vs. Daulatram Rawatmull (1964) 53 ITR 574 (SC). It is a well settled law that loose papers and documents cannot possibly be construed as books of accounts regularly kept in the course of business and this principle is supported by the Hon'ble Supreme Court in the case of Central Bureau of Investigation Vs. V.C.Shukla (1988) 8 SSC 410. A similar view has been taken in the case of Chauharmal Vs. Comm....
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....in contrary to allege that the assessee is beneficiary of contents recorded in the documents found in the pen drive seized from the employees of Dalmia group, in our considered view, no additions can be made merely on the basis of presumption that the assessee may be beneficiary of the said document by bringing the theory of 'quid pro quo', without any evidence to support the allegation of 'quid pro quo' theory . As noted in earlier paragraphs, the assessee was not holding any official position at relevant point of time, to influence any person for favoring or benefit to the Dalmia group and therefore, in the absence of any evidence to the contrary, it cannot be alleged that these transaction is part of quid pro quo and whatever consideration received by third party for sale of shares of a company can be assessed in the hands of the assessee as income u/s 56(1)(vii) of the Act. 14. At this stage, it is relevant to refer to various decisions relied upon by the learned counsel for the assessee. The assessee has relied upon the decision of Hon'ble High Court of Delhi in the case of CIT Vs. Sant Lal [2020] 118 taxmann.com 432 (Delhi), where, Hon'ble High Court, in light of p....
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....e submissions fail to persuade this Court to interfere with the matter. Concurrent findings of fact have been rendered by the CIT (A) as well as by the ITAT. Nothing has been pleaded in the memorandum of appeal to persuade the Court to hold that those findings are perverse or contrary to the facts on record. Secondly, there is not a whisper in the order of the AO about any bag recovered from the premises of the Assessee during the search of the Assessee's premises on 22nd March 2006. There is no such averment even in the memorandum of appeal filed before this Court. The material referred to in the order of the AO is that which was recovered from the premises of Mr. Brij Mohan Gupta and nothing else. That material has been discussed threadbare in the order of the CIT (A). Detailed reasons have been given as to why that material was insufficient to link the Assessee with "MP Gupta? whose name finds mention in the diary and the documents seized from the premises of Mr. Brij Mohan Gupta. 14. Consequently, the Court is not persuaded to permit the Revenue, for the first time, before this Court to set up an entirely different case of there having been a bag seized from the pr....
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....o the assessing officer, accordingly reassessment proceedings were initiated in the case of the assessee. When the above findings were confronted with the assessee during the assessment proceedings, we observe from the record that the assessee has consistently denied having any transactions with the Dalmias. From the record submitted before us, such stand of the assessee was communicated to the Assessing Officer vide letter dated 04.03.2014 (Para no. 3.1 of assessment order). Further communication to this effect was made vide letter dated 20.03.2014 addressed to the Assessing Officer (Para no. 3.2 of assessment order). Further, we observe that the Assessee's statement was recorded u/s. 131(1) of the Act on 11.05.2012 by ADIT (Inv), New Delhi, who had carried out a search in the case of Dalmia group, which has been reproduced by the Assessing Officer on Para 11.8 of his order. In the said statement also, the assessee has denied having any transactions or business dealings with the Dalmias. 17. We also observe that the assessee also filed an affidavit before the CIT(A) (Para 7.7 of the CIT(A) order) wherein the assessee has reiterated that he does not have any business d....
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....en the pen drive was seized or cloned. It is their claim that 'hence, the ownership and authenticity of the contents of the pen drive per se is not clear'. We observe that the amount of addition admitted before the Settlement Commission by the Dalmias is way too small than the addition made in the case of the assessee. Although the Department has strongly objected this before the Settlement Commission (Pg no 13 of ITSC order), the application has been accepted and nothing has been brought on record to show that the order of the Settlement Commission has been reversed or even challenged. In any case, even if the person from whom the documents have been found out have accepted the Correctness of transaction before the Settlement Commission, in our considered view, the same is not binding on the assessee. The similar view was expressed in the decision of Jaipur Bench of the Tribunal in the case of Moti Developers v. ACIT in ITA No. 101/Jp/2017 dated 07.07.2017. Further, it is brought to our notice that the seized MOUs relied upon by the Department are undated, unsigned (by either party) and titled as 'draft'. It is the duty of the AO to bring on record that the same wa....
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....ry value of these documents as per section 34 of the Evidence ct, 1872, it is amply clear that these loose papers and documents cannot possible be construed as books of account regularly kept in the course of business. Such evidence would, therefore, be outside the purview of section 34 of the Evidence Act, 1972. The ratio of the landmark decision of Apex court in the case of Central Bureau of Investigation v V.c.Shukla& Ors (supra) relied upon by the learned counsel would apply. We are, therefore, of the considered opinion that the Revenue would not be justified in resting its case on the loose papers and documents found from the residence of a third party even if such documents contain narrations of transactions with the assessee-company. At this stage we may also refer to the provisions of section 132(4A). The presumption under the provisions of section 132(4A) would in any case not be applicable to a third party from whose possession such papers and documents have not been found by the Revenue. The Revenue has further relied upon the statements of Shri Sureshbhai and Shri Deepak Mehta partners of M/s Gokul Corporation. We find merit in the contention of the learned counsel that....
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....hri. Vijay N Mehta, CA, at the time of hearing submitted that additional ground filed by the assessee challenging jurisdiction of the A.O who had passed the assessment order is a preliminary issue which goes to question with authority of the officer in assumption of jurisdiction u/s 120 of the Income Tax Act, 1961. Therefore, the same may be admitted and adjudicated on merits. In this regard, he relied upon the decision of the Hon'ble Supreme Court in the case of CIT Vs. NTPC 229 ITR 383 (SC). 23. Ld. CIT-DRs, Ms. Narmada and Ms. Harita, on the other hand, strongly opposing admission of additional ground submitted that the assessee has taken additional ground for the first time before the Tribunal and questioned the authority and jurisdiction of the Addl. Commissioner of Income Tax (Addl.CIT) who passed the assessment order on the ground that unless the Addl. CIT possess valid jurisdiction and authority u/s 120(4)(b) of the Income Tax Act, 1961, he cannot act as A.O to pass the assessment order. But, fact remains that, as per provisions of Sec. 124(3) of the Act, the issue of jurisdiction can only be questioned within the prescribed time allowed under the Act. In this case, the ....
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....Tax (in short 'ADIT') or Income Tax Officer (in short 'ITO') vested with the jurisdiction by virtue of orders issued u/s 120(1) or (2) or any other provisions of the Act. The AR further submitted that the JCIT or Addl. CIT can exercise or perform any of the powers and functions of the A.O, if he is directed at u/s 120(4)(b) of the Act. Unless he was directed by a specific order under said section, he cannot perform any of the powers and functions of the A.O. The Ld. AR further submitted that the JCIT/Addl. CIT were not an A.O as per the definition of Assessing Officer as defined u/s 2(7A), until the deification was amended by the Finance Act, 2007 with retrospective effect from 01.06.1994. Further, even after the amendment, the Addl. CIT/JCIT can exercise or perform the power of an A.O, only if he is directed under clause (b) of sub-Sec. (4) of Sec. 120 of the Act. Further, by virtue of amendment brought to Sec. 2, sub sec. 7A by Finance Act, 2007 corresponding amendment was also made to Sec. 120(4)(b) of the Act, with retrospective effect from 01.06.1994 by vesting jurisdiction of A.O on the JCIT/Addl. CIT, if the board by virtue of general or special order authorizes/empowers the....
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....ld include JCIT after the amendment of Sec. 2 Sub Sec. 7A by the Finance Act 2007 with retrospective effect from 01.06.1994 which is evident from the notification issued by the CBDT u/s 120(1) & (2) of the Act, and also the order passed by the CCIT, Hyderabad u/s 120 (1) & (2) of the Act. The DR further submitted that the provisions of Sec. 120(1)&(2) of the Act, are very clear as per which, the Income Tax authority shall exercise all or any of the powers and perform all or any of the functions conferred on or as the case may be assign 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. The DR further submitted that the directions of the Board under Sub Sec. 120(1) may authorize any other Income Tax Authority to issue order in writing for the exercise of the powers and performance of the functions by all or any of the other income tax authorities are subordinate to it. She, further, referring to the provisions of Sec 120(6) of the Act, submitted that notwithstanding anything contained, any directions or order issued under this Section, o....
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....s not able to bring on record the notification issued by the Board and order passed by the CCIT/CIT u/s 120(1)& (2) of the Act, authorizing Addl. CIT to act as an A.O. She further submitted that the Tribunal while deciding the issue of jurisdiction in the case of TATA sons Ltd., (supra) has basically relied upon the decision of the ITAT Delhi Bench in the case of Mega Corporation Limited Vs. ACIT, 62 Taxmann.com 351, however said order has been reversed by the Hon'ble Delhi High Court in Income tax appeal No. 128/2018 vide order dated 20.03.2017, where the Hon'ble High Court clearly held that the assessee's logic appears to be incorrect in view of amendment to Sec. 2(7A) and jurisdiction conferred u/s 120 (1) & (2) of the Act, because the A.O includes the Dy. CIT. The court further observed that once the officer is authorized u/s 120 of the Act, then there is no need of separate order u/s 120(4)(b) of the Act. Therefore, it is incorrect to argue that the Addl. CIT does not have valid jurisdiction to pass reassessment order. 28. Per contra, the Ld. AR for the assessee submitted that the department is relying on the order No. CIT/restructuring ; 2014/jurisdiction /2014-15 dated 15....
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.... as an assessing Officer, but facts remain that in order to transfer a case to one Assessing Officer to another Assessing Officer, there should be an order u/s 127 of the Act. However, in the present case, there is no such order u/s 127 of the Act, transferring the case of the assessee from DCIT -Circle 2(1), Hyderabad to Addl. CIT-Range-2 and thus, in absence of specific order u/s 127 of the Act, the Addl. CIT cannot assume jurisdiction to pass the assessment order of the assessee. 30. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. The solitary issue that came up our consideration from additional ground raised by the assessee is, whether on the facts and in the circumstances of this case, the Addl. CIT does possess valid jurisdiction and authority to pass assessment order u/s 143(3) of the Act. The provisions of section 2(7A) of the Act, deal with the term definition of Assessing Officer. As per said section, the term Assessing Officer would include the JCIT/Addl. CIT, provided such JCIT/Addl. CIT is empowered by the Board by a general or specific order, authorising the Pr.CCIT/CCIT or Pr. CIT to empowe....
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....orm and exercise powers of an A.O and the Revenue is only relying upon the order passed u/s 127(1) of the Act. In those facts, the Tribunal came to the conclusion that the A.O who passed the assessment order does not possess valid jurisdiction and authority to pass such order. But the facts of the present case are entirely different. In this case, the Board has issued a notification in 2014 and authorized and empowered the DGIT/Pr. CIT/CIT to direct that the Addl. CIT or JCIT as the case may exercise the powers and perform the functions of the A.O in respect of territorial areas or persons or clause of persons. Further, CCIT, Hyderabad has passed a separate order u/s 120 (1) & (2) of the Act, and empowered the Addl. CIT/JCIT, Range2, Hyderabad to act as an A.O in cases of person or clause of persons as mentioned in the said notification and said order covers to alphabet of the assessee name. Therefore, when the Board has authorized Pr. CIT to authorize the JCIT/Addl. CIT to act on an A.O and also the CCIT has passed separate order authorizing the JCIT/Addl. CIT to act as an A.O to discharge the functions and powers of A.O, then the separate order u/s 120(4)b of the Act, does not re....
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....ly to the case where the assessee contents the action of the A.O is without authority of law and therefore wholly without jurisdiction. The relevant findings of the Hon'ble High Court are as under: "7. We are also in agreement with the contention of the Counsel for the petitioner that the petitioners objection to the jurisdiction of the A.O on the ground that if no search was initiated, notice under Section 153A of the Act could not have been issued, cannot be curtailed on the ground that such objection was raised beyond the period referred to in sub section (3) of the Sec. 124 of the Act. Section 124 of the Act pertains to jurisdiction of A.O Sub Section (2) of Section 124 provides that where the question arises under said section, as to whether on A.O has jurisdiction to assessee any person, such question shall be determined by the authority prescribed under the said sub-section. Sub Section (3) of section 124 provides time limits for a person to call in question jurisdiction of an A.O. Clause (c) of sub-section (3) of section 124 provides that no person shall be entitled to call in question jurisdiction of an A.O where an action has been taken under section 132 or secti....
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....se law relied upon by the Ld.DR is not applicable to the facts of the present case, and therefore, rejected. 35. Coming to another aspect of the issue. Assuming for a moment, the Addl.CIT is having concurrent jurisdiction over the assessee and there is no requirement of order u/s 120(4)(b) of the Act, because of general order issued by the CBDT u/s 120 (1)&(2), authorizing the JCIT/Addl.CIT to act as an assessing officer, but fact remains that even though the both officers having concurrent jurisdiction over the assessee, but both authority simultaneously cannot proceed to assess the case of the assessee. Further, there is a distinction between concurrent exercise of power and joint exercise of power. When power has been conferred upon two authorities concurrently, either one of them can exercise such power. When once a decision is taken to exercise power by any one of those authorities, such power must be terminated by that authority alone and further, such termination of power can be done only by passing an order u/s 127 of the Act. In the present case, since there is no order u/s 127 of the Act, transferring the case from the DCIT, Circle-2(1) Hyderabad to Addl.CIT, Range-2, ....
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....tional ground raised by the assessee is whether in facts and circumstances of this case, the JCIT does possess valid jurisdiction and authority to pass reassessment order u/s 143(3) r.w.s 147 of the Act. The Provisions of section 2(7A) of the Act, deals with the term definition of Assessing Officer. As per said section, the term Assessing Officer would include the JCIT/Addl. CIT, provided such JCIT/Addl. CIT is empowered by the Board by a general or specific order, authorising the Pr.CCIT/CCIT or Pr. CIT to empower the JCIT/Addl. CIT by way of separate order u/s 120(4)(b) of the Act, to act as an Assessing Officer. Further, as per provisions of section 120(4)(b) of the Act, The Board, may by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein, authorise any Pr.DGIT/Pr.CCIT/CCIT/Pr. CIT to issue orders in writing that the powers and functions of an Assessing Officer to JCIT/Addl. CIT in cases of persons or clasee of persons etc. If you go through provisions of section 2(7A) in conjection with section 120(4)(b) of the Act, then it would be very clear that unless the JCIT/Addl. CIT is empowered by the Pr.CCIT/CCIT/Pr.CIT by....
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....passed by the officer above rank of JCIT and Addl. CIT, then such A.O should have valid jurisdiction/authority by virtue of an order passed u/s 120(4)b of the Act. In absence of specific order u/s 120(4)b of the Act, as well as Sec. 127(1) of the Act, the JCIT cannot have valid jurisdiction and authority to perform functions and powers of an A.O, consequently the assessment order passed by the A.O is bad in law and liable to be quashed. The relevant findings of the Tribunal are 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 our mind to the decisions cited by both the parties. The short point that arises for our consideration in this preliminary ground is whether the Addl. CIT, Range -1(3), Mumbai had the competence and jurisdiction to pass the assessment order in the case of the assessee. We find that this issue had been dealt at length by the co-ordinate bench of this tribunal in assessee's own case for the Asst Year 2002-03 in ITA Nos. 6981 & 7071 /Mum/2005 ; CO No. 40/Mum/2017 ; ITA Nos. 1108 & 1836 /Mum/2008 dated 30.6.2017 wherein it was held as under:- "13. We have ....
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.... 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 direct ion 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 section 120, can perform powers and functions of an Assessing Officer. It is relevant to observe, the provisions of section 2(7A) underwent a change by virtue of amendment brought by Finance Act, 2007. As pe r the said amendment in the second limb of section 2(74) along with the JCIT and JDIT, Addl. CIT/Addl. DIT were also to be treated as an Assessing Officer if they were directed to act as an Assessing Officer in terms of section. 120(4)(b). This amendment brought to section 2(7A) was with retrospective effect from 1....
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....ddl . 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 section120. Thus, vesting of power of Assessing Officer on different income tax authorities have been specifically demarcated under section 120 of the Act. A conjoint reading of Section 2(7A) an Section 120 would make it clear, as far as ACIT, ADIT, DCIT, ADIT; DDIT and ITO are concerned, they have to be vested with the power of Assessing Officer under section 120(1) or (2), whereas, AddI. CIT, Addl. DIT, KIT, MIT can be vested with the power of Assessing Officer under Section 120(4)(b). In a notification issued under section 120(1) and 120(2), Addl. CIT cannot be vested with power to act as an ....
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....es 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 notifications can validly authorize or empower the Addl. CIT, Range-1(3) to act as an Assessing Officer in the present case. In case of Mega Corporation Ltd. vs. ACIT, [2015] 155 ITD 1019, the Tribunal while deciding identical issue of exercise of powers and functions of Assessing Officer by Addl. CIT dealt with the aforesaid notifications relied upon by the learned Departmental Representative and following the decision of the Hon'ble Delhi High Court in Valvoline Cummins v/s DCIT,....
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....oes 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 passing the assessment order, if so challenged by an assessee at any stage. 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....
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....T 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 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 a....
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....ly 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 Officer only if they were so authorized specifically by their jurisdictional Commissioner. In support of his proposition, he relied upon following judgments: 1. Mega Corporation v: Add!; CIT (62 taxmann.com351 (Del. ITAT) 2. Bindal Apparels Ltd. ACIT 104 TTJ 950(Del) 3. City Garden vs. ITO (21 taxmann.com 373 (Jodhpur ITAT) 4. Micro fin Securities (P) Ltd. vs Add!. CIT i SOT 302 (Luk.) ....
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....tly 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), Mumbai, dated 5th September 2091, intimating the assessee about change in jurisdiction and Claiming that jurisdictional was with the said officer. The relevant part of the said notice is reproduced hereunder: "Sub: Change in jurisdiction-Intimation regarding In terms of Notification No. SO No. 732(E) dated 31.7.2001 of Central Board of Direct Taxes and consequential Notification dated 7.8.2001 of CIT. MC-11, Mumbai, jurisdi....
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....ion 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 jurisdiction has been assigned to one of the officers, it shall not be exercised by the other, and lithe jurisdiction is taken away from the former officer and assigned to the latter, then it shall be exercised by the latter only and. hot by the former. Thus, the jurisdiction can be exercised by only one Assessing Offi....
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....ction 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 exercise of power and joint exercise of power. When power has been conferred upon two authorities concurrently, either one of them can exercise that power and once a decision is taken to exercise the power by any one of those authorities, that exercise must be terminated by that authority only. It....
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....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, is illegal and void ab initio for want of jurisdiction. Consequently, we are of the opinion that the assessment order in the present case dated 31.3.2003 passed by the Addl. CIT, Range (6), Kanpur was illegal and void ab initio for want of jurisdiction. Consequently, the as....
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....r. 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 Income 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 amendment by Finance Ad, 2007, words 'Additional Commissioner' have also been inserted along with words 'Joint commissioner', in section 2(7A) which defines the term for 'Assessment Officer' ....
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....n 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 income - tax Act,1961(43 of 1961), the Central Board of Direct Taxes, hereby directs that the Joint Commissioners of Income Tax or the Joint Directors of Income tax, shall exercise the. ....
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....otification, 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 Commissioner authorizing even the 1 Joint Commissioner' to perform powers and' functions ' of Assessing Officer of the assessee. As per the discussion made....
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.... "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" or Income Tax Officer" under the Act. This interpretation also 'derives strength from the provisions contained in section 120(....
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....4 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 Lucknow 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 is quite 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 result of retrospective amendment made by the Finance Act, 2007 but at the same time, it/s also clear t....
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.... 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 relations 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 assessment framed by him was illegal and void ab initio. " ..... 3.....
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.... 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 Section 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 particular manner, then that authority....
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....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 the validit....
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....orm and exercise powers of an A.O and the Revenue is only relying upon the order passed u/s 127(1) of the Act. In those facts, the Tribunal came to the conclusion that the A.O who passed the assessment order does not possess valid jurisdiction and authority to pass such order. But, facts of the present case are entirely different. In this case, the Board has issued a notification in 2014 and authorized and empowered the DGIT/Pr. CIT/CIT to directs that the Addl. CIT or JCIT as the case may be shall exercise the powers and perform the functions of the A.O in respect of territorial areas or persons or clause of persons. Further, the Pr. CIT, Range- 17, Mumbai has passed a separate order u/s 120 (1) & (2) of the Act, dated 15.11.2014 by virtue of notification No. SO2752(E) dated 22/Oct/2014 and empowered the Addl. CIT/JCIT, Range -17(2), Mumbai to act as an A.O in cases of person or clause of persons as mentioned in the said notification and said order covers to alphabet of the assessee name. Therefore, when the Board has authorized Pr. CIT to authorize the JCIT/Addl. CIT to act an A.O and also the Pr. CIT has passed separate order authorizing the JCIT to act as an A.O to discharge th....
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....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. In those facts, the Hon'ble Delhi High Court came to the conclusion that the assessee cannot questioned the jurisdiction of the A.O in absence of separate order u/s 120(4)b of the Act. In this case, on verification of facts, we find that there is no order authorizing the JCIT u/s 120 (4)(b) of the Act, therefore the facts of the Hon'ble Delhi High Court has no application to the facts of the present case. 17. Coming to another argument of the ld. DR in light of section 124(3) of the Act. The ld. DR submitted that as per section 124(3), no person shal....
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....e case, we are of the considered view that the reassessment order passed by the JCIT, Range-17, Mumbai is void-ab-initio and liable to be quashed, because the A.O who had passed the assessment order does not possesses valid authority and jurisdiction to pass such order in absence of separate order u/s 120(4)(b) of the Act. Therefore, considering the above facts and also by following the decision of ITAT, Mumbai in the case of TATA Communications Ltd., in ITA No. 3972/Mum/2017, we quashed reassessment order passed by the A.O. u/s 143(3, r.w.s. 147 of the Act." 38. The assessee had also relied upon the decision of ITAT Raipur in the case of Jindal Power Ltd. Vs. JCIT in ITA No.201 ad 202/Rpr/2017 dated 25.06.2024. The coordinate bench of ITAT, on identical set of facts held as under : "20. We shall now deal with the sustainability of the assessment order passed by the Jt. CIT, Range-1, Bilaspur u/s. 143(3) dated 29.01.2014 in absence of any order u/s. 120(4)(b) of the Act conferring upon him the jurisdiction to exercise or perform the powers and functions as that of an A.O over the case of the assessee company before us. 21. Before proceeding any further, we deem....
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....ome Tax, inter alia, can exercise or perform all or any of the powers and functions conferred on, or assigned to the A.O under this Act, but as provided in sub-section (7A) of Section 2 of the Act, the same is subjected to a fundamental pre-condition that he is so directed under clause (b) of subsection (4) of Section 120 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 Income Tax Act, 1961. Accordingly, the Jt. Commissioner of Income Tax in absence of an order u/s. 120(4)(b) of the Act cannot exercise or perform all or any of the powers and functions conferred on or assigned to, an A.O under this Act. A corollary flowing thereto is that the Jt. Commissioner of Income Tax in absence of an order u/s. 120(4)(b) of the Act cannot frame the assessment u/s. 143(3) of the Act. 23. We find that ITAT, "H" Bench, Mumbai in the case of Shri Kishore Vithaldas Vs, JCIT-17(2), Mumbai, ITA No,7397/Mum/2016 and ITA No.5661/Mum/2017 dated 16.10.2019, had observed, that Jt. CIT/Addl. CIT cannot validly assume jurisdiction and pass an assessment order in absence of an order u/s. 120(4)(b) of the Act. Also, ....
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....ification 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 far as Notification No.267/2001 is concerned, it reads as follows:- "In exercise of the powers conferred by clause (b) of subsection (4) of section 120 of the income -tax Act,1961(43 of 1961), the Central Board of Direct Taxes, hereby directs that the Joint Commissioners of Income Tax or the Joint Directors of Income tax, shall exercise the powers and functions of the Assessing Officers, in respect of territorial area or persons or classes of persons or....
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.... 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 him. 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 (2001) 252 ITR 123/[2002) 122 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 in 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 to any other authority. In any event, if an authority, which had no jurisdiction to issue such an authorization did ....
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....an A.O conferred on him u/s. 120(4)(b) of the Act, therefore, assessment so framed by him being devoid and bereft of any force of law was liable to be quashed. Once again, the aforesaid view had been reiterated by the ITAT, "J" Bench, Mumbai in the case of Addl. CIT, Range-1(3) Vs. M/s. Tata Communications Limited (Formerly known as Videsh Sanchar Nigam Limited), ITA No.4452/Mum/2011, ITA No.3460/Mum/2011 and ITA No.8768/Mum/2010 dated 24.12.2019. 26. Further, we find that ITAT, "B" Bench, Kolkata had an occasion to deal with the aforesaid issue in the case of DCIT, Circle-7(1), Kolkata Vs. M/s. Ganesh Realty & Mall Development Pvt. Ltd., ITA No.581/Kol/2017 dated 23.01.2019. The Tribunal had approved the order of the CIT(Appeals), who had observed that as per Section 2(7A) of the Act, ACIT/DCIT, ADIT/DDIT or the ITO would be considered as A.O who had been vested with jurisdiction u/s. 120(1) or u/s. 120(2), but the Addl. CIT/Jt. CIT, Addl. DIT/Jt. DIT would act as A.O only if they are empowered u/s. 120(4)(b) of the Act in writing. In fact, we find that a similar view had been taken by the ITAT, Delhi in the case of a group entity of the assessee company, viz. Jindal Steel & Power....
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.... which it was served with the notice u/s. 143(2) of the Act, therefore, it was divested of its right from assailing the same for the first time before the Tribunal. 28. Before proceeding any further, it would be relevant to cull out Section 124(3) of the Act which reads as under: "124 (1) xxxxxxxx (2) xxxxxxx (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer- (a) where he has made a return under subsection (1) of section 115WD or under subsection (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to t....
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....sessee is with respect to the territorial jurisdiction and would have no relevance in so far his inherent jurisdiction for framing the assessment is concerned. Also, support is drawn from a recent judgment of the Hon'ble High Court of Calcutta in the case of Principal Commissioner of Income-tax Vs. Nopany& Sons (2022) 136 taxmann.com 414 (Cal). In the case before the Hon'ble High Court the case of the assessee was transferred from ITO, Ward-3 to ITO, Ward-4 and the impugned order was passed by the ITO, Ward-4 without issuing notice u/s 143(2), i.e. only in pursuance to the notice that was issued by the ITO, Ward-3, who had no jurisdiction over the assessee at the relevant time. The Hon'ble High Court considering the fact that as the assessment was framed on the basis of the notice issued under Sec. 143(2) by the assessing officer who had no jurisdiction to issue the same at the relevant point of time quashed the assessment. Apart from that, the aforesaid view is also supported by the order of the ITAT, Kolkata 'B' Bench in the case of OSL Developers (p) Ltd. Vs. ITO, (2021) 211 TTJ (Kol) 621 and that of ITAT, Gauhati Bench in the case of Balaji Enterprise Vs. ACIT (2021) 187 IT....
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....ble Apex Court further observed that if the court passes order/decree having no jurisdiction over the matter, it would amount to a nullity as the matter goes to the roots of the cause. Also, the Hon'ble Apex Court clarified that an issue can be raised at any belated stage of the proceedings including in appeal or execution. Elaborating further, it was observed by the Hon'ble Apex Court that the finding of a court or tribunal becomes irrelevant and unenforceable/inexecutable once the forum is found to have no jurisdiction. It was further observed by the Hon'ble Apex Court that acquiescence of a party equally should not be permitted to defeat the legislative animation and the court cannot derive jurisdiction apart from the statute. For the sake of clarity, the observations of the Hon'ble Apex Court in the case of Kanwar Singh Saini Vs. High Court of Delhi (supra) are culled out as under: "22. There can be no dispute regarding the settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior court, and if the court passes order/decree having no jurisdiction ....