2021 (3) TMI 44 - AT - Income Tax

Orders passed by CIT-A without proper jurisdiction - As stated CIT(A)-11, Bangalore who passed all the impugned orders committed serious lapses and he was directed by the Director General of Income Tax, Investigation, Karnataka Goa, Bengaluru, by direction dated 18/06/2018 not to pass any further appellate orders during pendency of the explanation sought on the lapses in adjudicating the appeals - plea of the revenue that all the orders impugned in these appeals were passed after 18.6.2018 and are therefore orders passed without jurisdiction and on that ground are liable to be set aside - Further plea of the revenue that by notification dated 16.07.2018, issued u/s. 120 of the Act, by the Principal Chief Commissioner of Income Tax, Karnataka Goa, the appeals pending before CIT (Appeals) - 11 were transferred to Commissioner of Income Tax (Appeals) - 12, Bengaluru and CIT (Appeals) - 11 disregarding the directions issued by the Principal CCIT, has passed orders that are impugned in all these appeals. HELD THAT - It is undisputed that the impugned orders in all the appeals were passed after 18.6.2018 order dt. 18.6.2018 by which Director-General of Income Tax (Investigation), Karnataka and Goa, Bengaluru, directed the then CIT(A)-11, Bengaluru, not to pass any further appellate orders during pendency of the explanation sought on the lapses in adjudicating the appeals. The CIT(A) had no jurisdiction to pass any orders in appeal on or after the aforesaid date. The order passed by him contrary to the directions of the superior officer cannot be said to be an order passed by a person having proper jurisdiction. There is prima facie material on record to show that the orders purported to have been passed after 18.6.2018 and prior to 16.7.2018 were pre dated, which he offered to submit it in sealed cover. Though we declined to look into it, yet, considering the conduct of the then Ld. CIT(A)-11, the stand taken by the revenue appears to be probable. In any case, the very action of then Ld. CIT(A)-11 in ignoring the binding directions given by DGIT and proceeding to pass orders results serious lapse on his part in administering justice. We also notice that all the orders impugned in these appeals have been passed between 5.7.2018 and 13.7.2018, numbering around 50 orders, involving different Assessees and different issues, which is difficult task for any appellate authority. Hence we agree with the submission of Ld. Standing Counsel that the interests of revenue is prejudiced by the said action of the then Ld. CIT(A)-11. All these factors, in our view, would vitiate the appellate orders passed by him after 18-06-2018, even if the allegation of pre-dating of orders is not accepted/proved. Hence the impugned orders, in our view, is not curable and sustainable in the eyes of law. We set aside the orders of the CIT(A) to the respective jurisdictional CIT(A) to decide the appeals afresh in accordance with law after due opportunity of hearing to the parties. The additional grounds of appeal are accordingly allowed.

Summary

Issues Involved:
1. Jurisdiction of the Commissioner of Income Tax (Appeals)-11 in passing the impugned orders.
2. Allegation of backdating the orders by the Commissioner of Income Tax (Appeals)-11.

Detailed Analysis:

1. Jurisdiction of the Commissioner of Income Tax (Appeals)-11:

The Revenue raised an additional ground questioning the jurisdiction of the Commissioner of Income Tax (Appeals)-11 (CIT(A)-11) in passing the impugned orders. They argued that the orders were passed after the CIT(A)-11 was directed by the Director General of Income Tax (Investigation), Karnataka & Goa, Bengaluru, on 18/06/2018, not to pass any further appellate orders due to certain lapses in adjudicating the appeals. Furthermore, a notification dated 16/07/2018 issued under section 120 of the Income Tax Act by the Principal Chief Commissioner of Income Tax, Karnataka & Goa, transferred the jurisdiction of pending appeals from CIT(A)-11 to CIT(A)-12. The Revenue contended that the CIT(A)-11 passed the impugned orders disregarding these directions and notifications, rendering the orders without jurisdiction and liable to be set aside.

The Tribunal considered the submission that the CIT(A)-11 had no jurisdiction to pass any orders in appeal after 18/06/2018. The Tribunal noted that the impugned orders were passed between 05/07/2018 and 13/07/2018, which was after the direction from the Director-General. The Tribunal emphasized that the instructions from the CBDT are binding on all income tax officials, and non-compliance with these directions prejudices the revenue.

2. Allegation of Backdating the Orders:

The Revenue also alleged that the impugned orders, purported to have been passed before 16/07/2018, were actually backdated to fall before the cut-off date. They supported their claim by pointing out that the date of dispatch of the impugned orders was not entered in the dispatch register maintained by CIT(A)-11. The Revenue argued that this omission indicates that the orders were passed after the jurisdiction was transferred to CIT(A)-12 and were backdated to appear as if they were passed before the transfer.

The Tribunal noted the Revenue's contention and the offer to submit prima facie material in a sealed cover to support the allegation of backdating. Although the Tribunal declined to look into the sealed material, it found the Revenue's claim probable given the conduct of CIT(A)-11. The Tribunal highlighted the difficulty of passing around 50 orders involving different assessees and issues within a short period, suggesting a serious lapse on the part of CIT(A)-11.

Conclusion:

The Tribunal, considering the jurisdictional defect and the probable backdating of orders, set aside the orders of CIT(A)-11. It directed the respective jurisdictional CIT(A) to decide the appeals afresh in accordance with the law after providing due opportunity of hearing to the parties. The Tribunal relied on the principle established by the Hon'ble Supreme Court that jurisdictional defects strike at the very authority of the court to pass any decree, rendering such orders nullities. Consequently, all the appeals and cross objections were allowed for statistical purposes.

Pronouncement:

The judgment was pronounced in the open court, and the appeals and cross objections were treated as allowed for statistical purposes.