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2020 (1) TMI 646 - AT - Income TaxRevision u/s 263 - Additional CIT s jurisdiction - whether assessment order passed by ACIT u/s 143(3) is bad in law, illegal and without jurisdiction and / or in excess of jurisdiction, on the grounds amongst others that he failed to establish that he possessed legal and valid jurisdiction under the Act to pass the assessment order - HELD THAT - As decided in own case 2019 (8) TMI 1446 - ITAT MUMBAI 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, in 127(1) of the Act. In this context, learned Departmental representative has relied upon certain notifications to justify the validity of the assessment order passed by the Addl. CIT. As far as existence of any order under section 127(1) is concerned, the learned Dlearned Departmental Representative has fairly submitted that no such order exist on record. At least, nothing was brought to our notice in spite of specific query bang raised by the Bench. Therefore, when the issues are to be decided on the basis of facts already available on record and keeping in view the relevant notifications placed on record as well as the decisions cited, there is no necessity of restoring the matter back to the file o the learned Commissioner (Appeals). As far as the contention of the learned Departmental Representative regarding maintainability of the additional ground on the plea that the assessee can only challenge the jurisdiction issue under section 124(3) of the Act, we do not find any merit in such submissions. A plain reading of section 124 would show that it refers to an order issued under subsection (1) or (2) of section 120, whereas, we are concerned with an order purported to be passed under section 120(4)(b) empowering the Add). CIT to act as an Assessing Officer. Therefore, in our view, the provisions of section 124 are not applicable to the present case. For that reason we do not feel it expedient to deal with the decisions relied upon by the 'earned Departmental Representative in that regard. Thus, in view of the aforesaid the additional ground and supplementary additional grounds are allowed. Respectfully following the aforesaid decision, we allow the additional grounds raised by the assessee challenging the validity of assessment framed by the ld Addl. CIT and accordingly quash the assessment so framed. - Decided in favour of assessee.
Issues Involved:
1. Validity of the assessment order passed by the Additional Commissioner of Income Tax (Addl. CIT) under section 143(3) of the Income Tax Act, 1961. 2. Jurisdiction of the Addl. CIT to act as an Assessing Officer (AO) without proper authorization under section 120(4)(b) and section 127 of the Income Tax Act, 1961. 3. Admission of additional grounds challenging the jurisdiction of the Addl. CIT. 4. Cross objections raised by the Revenue against the additional grounds. 5. Consequential reliefs and adjustments based on previous Tribunal decisions. Detailed Analysis: 1. Validity of the Assessment Order Passed by the Addl. CIT: The Tribunal examined the validity of the assessment orders passed by the Addl. CIT for the assessment years (A.Y.) 2005-06 and 2006-07. The assessee challenged the jurisdiction of the Addl. CIT, arguing that the assessment orders were illegal and without jurisdiction as the Addl. CIT was not properly authorized to act as an AO. The Tribunal found that the Addl. CIT lacked proper authorization under section 120(4)(b) of the Income Tax Act, 1961, and there was no order under section 127 transferring jurisdiction to the Addl. CIT. Consequently, the Tribunal quashed the assessment orders for both A.Y. 2005-06 and 2006-07 as they were passed without valid jurisdiction. 2. Jurisdiction of the Addl. CIT to Act as an AO: The Tribunal analyzed the statutory provisions and notifications to determine whether the Addl. CIT had the jurisdiction to act as an AO. It was found that the Addl. CIT could only exercise the powers of an AO if specifically directed under section 120(4)(b) of the Act. The Tribunal noted that the relevant notifications did not confer such jurisdiction on the Addl. CIT. Additionally, there was no order under section 127 transferring the case from the DCIT to the Addl. CIT. The Tribunal referred to previous decisions, including those in the assessee's own case for earlier years, which held that in the absence of proper authorization, the Addl. CIT could not act as an AO. Therefore, the Tribunal concluded that the assessment orders passed by the Addl. CIT were without jurisdiction and void ab initio. 3. Admission of Additional Grounds Challenging Jurisdiction: The assessee raised additional grounds challenging the jurisdiction of the Addl. CIT. The Tribunal admitted these additional grounds, stating that they were purely legal and jurisdictional issues that could be decided based on the facts available on record. The Tribunal relied on the decisions of the Hon'ble Supreme Court and the Hon'ble Jurisdictional High Court, which allowed the admission of additional grounds related to legal and jurisdictional issues. 4. Cross Objections Raised by the Revenue: The Revenue filed cross objections against the additional grounds raised by the assessee, arguing that the assessment orders were valid and the Addl. CIT had jurisdiction. The Tribunal rejected the Revenue's objections, stating that the issue of jurisdiction could be raised at any stage and that the Addl. CIT lacked proper authorization to act as an AO. The Tribunal emphasized that the absence of an order under section 120(4)(b) and section 127 rendered the assessment orders invalid. 5. Consequential Reliefs and Adjustments: The Tribunal noted that since the assessment orders were quashed on jurisdictional grounds, the grounds raised on merits by the assessee became infructuous and were not adjudicated. The Tribunal also addressed the additional grounds raised by the assessee for A.Y. 2006-07, which sought consequential reliefs based on previous Tribunal decisions. These grounds were admitted and taken up for adjudication, but the Tribunal quashed the assessment order on jurisdictional grounds, rendering the grounds on merits infructuous. Conclusion: The Tribunal allowed the appeals filed by the assessee for A.Y. 2005-06 and 2006-07, quashing the assessment orders passed by the Addl. CIT on jurisdictional grounds. The appeals filed by the Revenue and the cross objections were dismissed. The Tribunal emphasized the importance of proper authorization and adherence to statutory provisions for the exercise of jurisdiction by tax authorities.
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