2023 (8) TMI 271 - AT - Income Tax

Admissibility of additional ground at this belated stage - Period of limitation u/s 153 for issue assessment order u/s 143(3) r.w.s. 144C(1) - Rectifiable mistake u/s 292BB - HELD THAT - No merit in the Revenue s instant technical objections as this tribunal s Special Bench decision in All Cargo Global Logistics Ltd. 2012 (7) TMI 222 - ITAT MUMBAI(SB) after considering hon ble apex court s landmark judgment in National Thermal Power Co. Ltd. 1996 (12) TMI 7 - SUPREME COURT holds that we could very well entertain such a pure legal question going to root of the matter in order to determine correct tax liability of an assessee provided all the relevant facts are already on record. These Revenue s technical objection stand declined accordingly. Validity of assessment for want of a valid reference u/s. 92CA - assessment jurisdiction - as argued ACIT, Circle-10(1) herein was not competent to make sec.92CA reference itself to the TPO - Period statutory limitation u/s. 153(4) - HELD THAT - Once the competent authority i.e., CIT- 10, Mumbai had already passed sec.127(2) order transferring the assessee s assessment jurisdiction from ACIT, Circle-10(1), Mumbai to DCIT, Circle-1, Pune from 22.11.2011 itself, the former authority was hardly left with any jurisdiction to proceed further i.e., on 24.11.2011 and, therefore, all subsequent proceedings in furtherance thereto, are void and not sustainable in the eyes of law. We find no merit in Revenue s arguments. We make it clear that the question as to whether the assessment jurisdiction stood transferred from ACIT, Circle-10(1), Mumbai as on 22.11.2011 is no more res integra once detailed discussion in 2012 (11) TMI 287 - BOMBAY HIGH COURT has decided the same in assessee s favour and against the department. This is indeed coupled with the fact that assessee has further succeeded in the preceding assessment year 2008- 2009 thereby getting the corresponding assessment quashed at the CIT(A)'s level. Faced with the situation, we conclude that the Assessing Officer at Mumbai had no authority at all to make sec.92CA reference to the TPO which renders the entire subsequent proceedings as void ab initio and not sustainable in law. We further wish to make it clear that sec.292BB quoted at the Revenue s behest nowhere deals with such an instance of apparent lack of jurisdiction in clauses (a) to (c) thereof. The impugned assessment herein dated 30.05.2013 indeed deserves to be quashed as not only based on an invalid sec.92CA reference but also framed beyond the statutory limitation u/s. 153(4) of the Act which is extendable by twelve months therefore. Decided against revenue.

Summary

Issues Involved:
1. Validity of the assessment due to jurisdictional transfer.
2. Validity of the reference made under Section 92CA of the Income Tax Act, 1961.
3. Applicability of Section 292BB of the Income Tax Act, 1961.

Summary:

1. Validity of the Assessment Due to Jurisdictional Transfer:
The assessee challenged the validity of the assessment dated 30.05.2013 on the grounds of an invalid reference under Section 92CA of the Income Tax Act, 1961. The core argument was that the ACIT, Circle-10(1), Mumbai, was not competent to make the reference to the TPO after the jurisdiction was transferred to DCIT, Circle-1(2), Pune, by the CIT-10, Mumbai's order dated 22.11.2011. The Tribunal referenced the hon'ble jurisdictional high court's decision in the assessee's writ petition no.8657/2012, which quashed a similar notice due to lack of jurisdiction, emphasizing that once the jurisdiction was transferred, the ACIT, Circle-10(1), Mumbai, had no authority to proceed further.

2. Validity of the Reference Made Under Section 92CA:
The reference made by ACIT, Circle-10(1), Mumbai, to the TPO on 24.11.2011 was deemed invalid as the jurisdiction had already been transferred to DCIT, Circle-1(2), Pune, on 22.11.2011. The Tribunal found that the subsequent proceedings, including the TPO's order and the assessment order, were void ab initio and not sustainable in law. The Tribunal cited the hon'ble jurisdictional high court's decision and the doctrine of "functus officio," which implies that the ACIT, Circle-10(1), Mumbai, could not exercise any authority after the jurisdiction transfer.

3. Applicability of Section 292BB:
The Revenue argued that the procedural irregularity of jurisdictional transfer was a curable defect under Section 292BB of the Act. However, the Tribunal clarified that Section 292BB does not apply to instances of apparent lack of jurisdiction. Therefore, the impugned assessment was quashed as it was based on an invalid Section 92CA reference and was framed beyond the statutory limitation under Section 153(4) of the Act.

Conclusion:
The Tribunal dismissed the Revenue's appeal ITA.No.1483/PUN./2015 and allowed the assessee's cross-appeal ITA.No.1497/PUN./2015, quashing the impugned assessment dated 30.05.2013. All other rival pleadings on merits in both cross-appeals were rendered academic.