2018 (6) TMI 1824 - HC - Income Tax

Jurisdiction of AO over the assessee - a ppeal carried by the ACIT-39 to the Appellate Tribunal was dismissed as not competent - HELD THAT - Assistant Commissioner of Income Tax-39, who had no jurisdiction over the assessee, carried an order in appeal to the Appellate Tribunal against an order passed by the Commissioner (Appeals). At the relevant time, the ITO-44 had jurisdiction over the assessee. The appeal carried by the ACIT-39 to the Appellate Tribunal was dismissed as not competent. The order of the Appellate Tribunal was challenged by the Revenue in this Court. This Court did not interfere with the order of the Tribunal and the matter rested there without this Court s order being challenged by the Revenue before the Supreme Court. In the present case, the matter pertains to the same assessment year when the ITO-44 has preferred an appeal where the initial assessment was not done by the ITO-44 but such assessment was conducted by the ACIT-39 at a point of time when ACIT-39 lost jurisdiction over the assessee pursuant to the said CBDT Notification of 2002. Since there was a fundamental error, the Appellate Tribunal dismissed the appeal as incompetent since the order of the AO who had no jurisdiction to undertake the assessment qua the assessee could never have been found to be legal or resurrected.

Summary

Issues: Jurisdictional error in carrying an appeal to the Appellate Tribunal by an Assessing Officer lacking jurisdiction.

Analysis:
The judgment pertains to a case where an Assistant Commissioner of Income Tax-39 (ACIT-39), who had lost jurisdiction over the assessee due to a CBDT Notification, carried an appeal to the Appellate Tribunal against an order passed by the Commissioner (Appeals). The Appellate Tribunal dismissed the appeal as incompetent due to the fundamental error of the Assessing Officer lacking jurisdiction. The High Court did not interfere with the Tribunal's decision, and the matter remained unchallenged before the Supreme Court. The Tribunal rightly dismissed the appeal as the order being challenged was itself without jurisdiction, making it impossible for the Tribunal to validate it.

The key point of contention was the jurisdictional error committed by the ACIT-39 in carrying an appeal to the Appellate Tribunal despite losing jurisdiction over the assessee. The High Court emphasized that an order passed by an Assessing Officer lacking jurisdiction could not be considered legal or revived through an appeal process. The Tribunal's decision to dismiss the appeal was upheld based on the principle that a jurisdictionally flawed order cannot be validated or supported by subsequent legal proceedings.

In conclusion, the High Court dismissed the appeal (ITAT No. 228 of 2016 and GA No. 1497 of 2016) due to the fundamental jurisdictional error in carrying the appeal to the Appellate Tribunal by an Assessing Officer who had no jurisdiction over the assessee. The Court found the objection raised by the assessee valid, as seeking to revive an order passed without jurisdiction was untenable. The judgment serves as a reminder of the importance of jurisdictional integrity in legal proceedings and upholding the principles of due process and authority in tax assessments and appeals.