2022 (6) TMI 1449 - AT - Income Tax

Jurisdiction of Additional CIT or JCIT without any independent order u/s. 120(4)(b) u/s. 127 - Jurisdiction of the Addl. CIT/JCIT for conducting the assessment proceedings and passing the draft / final assessment order in the absence of an order issued in writing u/s. 120(4)(b) pursuing the Addl. CIT/JCIT with the powers to perform the functions of the Assessing Officer - HELD THAT - We find that in the instant 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, 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 in cases TATA SONS LTD. VERSUS ACIT CIR. 2 (3) , MUMBAI 2016 (10) TMI 1228 - ITAT MUMBAI , M/S. TATA COMMUNICATIONS LTD 2019 (8) TMI 1446 - ITAT MUMBAI , TATA COMMUNICATIONS LTD. 2022 (3) TMI 218 - ITAT MUMBAI . We find that all the oral and written arguments of the ld. DR have been met in detail by the ld. AR before us as detailed supra. The issue in dispute is already addressed by the various decisions of the Tribunal which are reproduced in the ld. AR's rebuttal referred to supra. The same are not reiterated herein for the sake of brevity. As stated earlier, the issue is already settled by various decisions of the Tribunal in favour of the assessee. We hold that in the absence of separate order passed u/s. 120(4)(b) and order u/s. 127 of the Act, the Additional CIT / JCIT had no power to perform the functions of an Assessing Officer u/s. 2(7A) of the Act for both the years under consideration. Accordingly, the assessment orders framed by them are hereby quashed. Assessee appeal allowed.

Summary

Issues Involved:
1. Jurisdiction of Additional CIT/JCIT to act as the Assessing Officer without proper authorization under Section 120(4)(b) and Section 127 of the Income Tax Act.
2. Admissibility and timing of additional grounds challenging the jurisdiction.
3. Relevance and applicability of existing legal precedents and decisions by higher courts.

Detailed Analysis:

1. Jurisdiction of Additional CIT/JCIT:
The primary issue was whether the Additional CIT/JCIT had the jurisdiction to act as the Assessing Officer without an independent order under Section 120(4)(b) and Section 127 of the Income Tax Act. The Tribunal found that the definition of "Assessing Officer" under Section 2(7A) mandates explicit authorization for Additional CIT/JCIT to perform such functions. The Tribunal emphasized that the Central Board of Direct Taxes (CBDT) must issue a specific order in writing under Section 120(4)(b) to confer such powers. In the absence of such an order, the Additional CIT/JCIT cannot be considered as the Assessing Officer. The Tribunal also highlighted that there must be a separate transfer order under Section 127 to transfer jurisdiction from the Assistant Commissioner to the Additional CIT/JCIT. The Tribunal noted that despite repeated requests, no such orders were produced by the Department, leading to the conclusion that the assessments were made without proper jurisdiction.

2. Admissibility and Timing of Additional Grounds:
The Tribunal addressed the admissibility of additional grounds raised by the assessee challenging the jurisdiction of the Additional CIT/JCIT. The Tribunal admitted these additional grounds, noting that they go to the root of the matter and involve a pure question of law. The Tribunal rejected the Department's contention that such jurisdictional issues are not appealable under Section 253 or that they require further verification of facts. The Tribunal cited several precedents where similar additional grounds were admitted and adjudicated, including cases like Tata Sons Ltd. and Tata Communications Ltd. The Tribunal also dismissed the argument that there was an inordinate delay in raising these grounds, emphasizing that jurisdictional issues can be raised at any time and are not subject to the limitations of Section 124(3).

3. Relevance and Applicability of Existing Legal Precedents:
The Tribunal considered various decisions cited by both parties. The Department relied on decisions like N. Rajgopal (Bombay High Court) and Mega Corporation (Delhi High Court) to argue that the Additional CIT/JCIT had jurisdiction. However, the Tribunal distinguished these cases, noting that they did not address the specific issue of the absence of orders under Section 120(4)(b) and Section 127. The Tribunal cited several decisions where it was held that in the absence of proper authorization, the Additional CIT/JCIT could not act as the Assessing Officer. These included decisions in Tata Sons Ltd., Tata Communications Ltd., and Kishore Vithaldas, among others. The Tribunal reiterated that the absence of necessary orders rendered the assessments invalid.

Conclusion:
The Tribunal quashed the assessment orders for both assessment years 2009-10 and 2010-11, concluding that the Additional CIT/JCIT acted without proper jurisdiction. The Tribunal held that in the absence of orders under Section 120(4)(b) and Section 127, the assessments were invalid. Consequently, the Tribunal did not adjudicate the other grounds raised by the assessee, as the primary issue of jurisdiction was dispositive. The appeals were allowed in favor of the assessee.