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TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1583
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....hed. 2. The Ld. Pr.CIT erred in assuming jurisdiction u/s. 263 of the Act by examining issues not covered by the Limited Scrutiny and directing the Ld. AO to make a de novo assessment on issues not covered by the Limited Scrutiny and consequently the impugned order passed u/s. 263 is bad in law and is liable to be set aside. 3. The Ld. Pr.CIT failed to appreciate that the Ld. AO had made detailed enquiries on the issue of "Large Increase in Investment in Unlisted Securities" and hence on the very same issue no action can be taken u/s. 263 of the Act when the order u/s. 143(3) was pursuant to proper enquiry on the facts and circumstances of the case and in accordance with law and consequently the impugned order u/s. 263 is bad in law and is liable to be set aside. 4. The Ld. Pr.CIT erred in law by expanding the scope of the Limited Scrutiny, which can be done only by the AO at the AO's discretion, on the issue of "Large Increase in Investment in Unlisted Securities" to extend to verification of applicability of S.56(2)(viia) of the Act which was not contemplated in the notice of Limited Scrutiny, thereby exceeding his jurisdiction u/s. 263 resulting in....
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....5. Considered the rival submissions and material placed on record by both the parties. We observed that the issues raised by the assessee in additional grounds go to the root of the matter challenging the jurisdictional issue. In the light of Hon'ble Supreme Court decision in the case of NTPC, Limited vs. CIT (1998) 229 ITR 383 (SC), we are inclined to admit the additional grounds and take up the same for adjudication herein below. 6. At the time of hearing, ld. AR of the assessee pressed only additional grounds on the legal issue that the order passed by ITO, Ward 2(3), Delhi is void ab initio due to want of jurisdiction. In this regard, ld. AR brought to our notice the relevant facts on record. He submitted that the assessee is a part of the Ambience group and a search u/s. 132 of the Act was conducted on 10.10.2007 in case of the group companies. He submitted that Pursuant thereafter, the jurisdiction of the assessee was centralized and assigned to the charge of Central Circle-16, New Delhi ("CC-16") vide order of centralization dated 21.11.2008 in F.No.CIT-I/ITO Hq-1/ Centralisation/ 08- 09/1259. He further submitted that the assessee since then has regularly been assessed u....
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....fer order is available on record and a copy of the email communication made by the ITO Ward 2(1) to the Department Representative ("DR") was provided to the assessee. He further submitted that vide the correspondence, it was categorically admitted by the ITO Ward 2(1) that no decentralization/ transfer order u/s. 127 of the Act pertaining to the assessee could be traced by his office or even in the records of the CC-16 and copy of such e-mail communication was submitted before the Bench at the time of hearing on 08.07.2025. He submitted that the instant case of the assessee is squarely covered by the decision of the Hon'ble Delhi High Court in case of assessee's group concern, Raj Sheela Growth Fund (P) Ltd v. ITO Ward 21(1) [WP (C) 3777/2022] and the brief facts of the case are as under: * Pursuant to an order of centralization dated 16.07.2008, the jurisdiction of the assessee was assigned to CC-16. * Scrutiny assessment was initiated and completed by ITO Ward 21(1), New Delhi vide assessment order dated 31.12.2017. * The Assessee preferred an appeal before Ld. CIT(A) (where the ground of lack of jurisdiction was inter-alia raised), which was re....
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....tion where at one point, one or more assessing officers not only will have jurisdiction over the assessee but also can proceed with the assessment proceedings simultaneously. Such a situation cannot be countenanced in the law. 28. In addition to that, a bare perusal of the order dated 15.11.2014 passed under Section 120 of the Act under the pen of ACIT read with CBDT notification dated 22.10.2014, would reveal that these notifications cannot run contrary to the legislative mandate of Section 127 of the Act Moreover, the jurisdiction of the DCIT, Central Circlel6, New Delhi over the case of the assessee is assigned vide a separate order of centralization dated 16.07.2008. Thus, it is discernible that once the case of the assessee is centralized, then the transfer of the case of the assessee to another AD would not be permissible without a decentralization order or transfer order under Section 127 of the Act as contrary to such a position dehors the underlying objective which the Act seeks to achieve by virtue of powers enshrined under Section 127 of the Act. We accordingly set aside the impugned orders dated 31.12.2017 and 30.09.2021. 29. In view of the aforesaid, ....
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.... the interests of revenue, the PCIT directed the AO to reframe the assessment by computing the correct fair market value and taxing the difference under "Income from Other Sources." 4. The matter is presently sub judice before this Hon'ble Tribunal, and at this stage, a significant technical issue arises concerning the validity of jurisdiction. Specifically, the question is whether there exists a valid decentralization order under Section 127 of the Income Tax Act, effectuating the transfer of jurisdiction from the Central Circle to the Income Tax Officer, Ward-2(3), New Delhi, who ultimately framed the assessment in question. Furthermore, the revisionary order passed by the Principal Commissioner of Income Tax (PCIT)-I, who assumed jurisdiction over the said Assessing Officer, also hinges upon the legitimacy of this transfer. 5. In this context, reliance may be placed on the provisions of Section 124(3)(a) and Section 292B of the Income Tax Act. 6. Section 292B provides that no return of income, assessment, notice, summons, or other proceedings shall be deemed invalid merely due to any mistake, defect, or omission, provided such acts are in substance....
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....d by the Hon'ble Allahabad High Court in the case of Ajay Verma vs Union of India 2022:AHC:39536-DB, wherein the Hon'ble High Court held that has held that where the case of an assessee has been assigned to the Central Tax Officer (CTO) and the assessee does not object to the show cause notice and assessment order issued by State Tax Officer (STO), it would not be a case of inherent lack of jurisdiction but a result of contributory error of jurisdiction by STO. 11. Similarly, in the case of Kedar Shashikant Deshpandey & Ors (2011) 2 SCC 654, the Hon'ble Supreme Court had considered the principle "submitting to the jurisdiction of the authority" and held that "it is well settled that if a person has submitted to the jurisdiction of the authority, he cannot challenge the proceedings on the ground of lack of jurisdiction of the said authority in further appellate proceedings ". 12. It is submitted by the Revenue that the Revisionary order of the CIT under Section 263 of the IT act is justifiable and correct in law as the order passed by the Assessing Officer was not only erroneous but also prejudicial to the interest of the Revenue." 12. Considered the....
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....this case. In this regard, she submitted that the provisions of section 124(3)(a) and section 292B stipulates the bar to any contention about the lack of jurisdiction of the AO. She relied on several decisions in this regard. After due consideration, we observe that sections relied by the ld. DR relates to section 124(3)(a) and section 292B of the Act and both these sections are not applicable in the present case considering the fact that the jurisdiction of the assessee was held by Central Circle 16, New Delhi and later it was transferred to ITO, Ward 2(3) which can be transferred only by way of passing a change of jurisdiction order u/s 127 of the Act. In absence of valid transfer order u/s 127 of the Act, the provisions of section 124(3)(a) and 292B will not come to rescue to such irregularities. We also observe that in the case of Raj Sheela Growth Fund (P) Ltd. (supra), a group concern of the assessee, wherein Hon'ble Delhi High Court gave a categorical finding as under :- "28. In addition to that, a bare perusal of the order dated 15.11.2014 passed under Section 120 of the Act under the pen of ACIT read with CBDT notification dated 22.10.2014, would reveal that these....