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2024 (6) TMI 427 - AT - Income TaxValidity of scrutiny assessment - Jurisdiction of the Addl. CIT in passing the assessment order u/s 143(3) r.w.s.144C(13) in absence of orders passed u/s 120(4)(b) or section 127 of the Act - HELD THAT Undisputedly, under the Act, only the AO is empowered to conduct a scrutiny assessment and passed the assessment order u/s 143(3) of the Act. As per the provisions of section 2(7A) of the Act, the Addl. CIT can exercise the powers of the Assessing Officer under the Act if the direction in this respect has been issued under section 120(4)(b) of the Act. Assignment orders have neither been furnished to the assessee nor been placed on record before us by the Revenue. Thus, nothing has been brought on record by the Revenue to suggest that the Addl. CIT, Range-3(2), Mumbai, who has passed the assessment order was authorized under section 120(4)(b) of the Act to perform functions and, exercise the powers of an AO in the case of the assessee. When the jurisdiction of the Addl. CIT to conduct scrutiny assessment and pass the assessment order under the Act is under challenge, the Revenue is under an obligation to bring on record the copy of the aforesaid order(s) to justify the basis of authority of the Addl. CIT to perform the functions, and exercise the powers of an Assessing Officer and pass the assessment order. Thus, apart from the sole statement in the intimation letters dated 13/08/2009 and 11/08/2010 as well as draft and final assessment order for the assessment year 2007 08, the Revenue has failed to produce any such order. Time limit for raising objection to the jurisdiction of the AO - As regards the submission of the learned DR that as per the provisions of section 124(3) of the Act, any challenge to the jurisdiction of the AO can be raised within a period of one month, we find that in Bansilal B. Raisoni Sons 2018 (12) TMI 223 - BOMBAY HIGH COURT held that the time limit for raising objection to the jurisdiction of the Assessing Officer prescribed under sub-section (3) of section 124 has a relation to Assessing Officer s territorial jurisdiction and the said time limit would not apply to a case where the assessee contends that the action of the Assessing Officer is without authority of law, and therefore, wholly without jurisdiction. Therefore, in absence of separate orders passed under section 120(4)(b) authorising the Addl. CIT to perform the functions, and exercise the powers of an AO under section 2(7A) and also in absence of an order transferring the jurisdiction under section 127 of the Act, the impugned final assessment order passed under section 143(3) read with section 144C(13) of the Act, in the case of the assessee, by the Addl. CIT for assessment year 2007 08 is without the jurisdiction, and hence is set aside. Assessee appeal allowed.
Issues Involved:
1. Jurisdiction of the Additional Commissioner of Income Tax (Addl. CIT) in passing the assessment order. 2. Admission of additional grounds of appeal by the assessee. 3. Validity of the assessment order under section 143(3) read with section 144C(13) of the Income Tax Act, 1961. Summary: 1. Jurisdiction of the Additional Commissioner of Income Tax (Addl. CIT): The assessee challenged the jurisdiction of the Addl. CIT in passing the assessment order dated 28.10.2011 u/s 143(3) read with section 144C(13) of the Act, arguing that the Addl. CIT lacked the legal and valid jurisdiction as he was not conferred such jurisdiction u/s 120(4)(b) of the Act, nor was there an order transferring the jurisdiction u/s 127 of the Act. The Tribunal noted that the Revenue failed to produce the assignment orders or any order u/s 120(4)(b) or section 127 of the Act, which would authorize the Addl. CIT to act as an Assessing Officer. The Tribunal emphasized that the jurisdictional challenge goes to the root of the matter and must be addressed even if raised for the first time before the Tribunal. 2. Admission of Additional Grounds of Appeal: The Tribunal admitted the additional grounds of appeal raised by the assessee, citing the Supreme Court's decision in NTPC Ltd., which allows legal issues to be raised for the first time before the Tribunal if the relevant facts are on record. The Tribunal dismissed the Revenue's objection regarding the delay in raising these grounds, referencing multiple cases where similar grounds were admitted after significant delays. The Tribunal held that the challenge to the jurisdiction of the authority under the Act is a pure question of law and can be raised at any stage. 3. Validity of the Assessment Order: The Tribunal found that the assessment order passed by the Addl. CIT was without jurisdiction due to the absence of requisite orders under section 120(4)(b) and section 127 of the Act. The Tribunal quashed the impugned final assessment order for the assessment year 2007-08, as it was passed without proper jurisdiction. Consequently, the regular grounds of appeal on merits raised by the assessee were deemed academic and left open. Conclusion: The appeal by the assessee was allowed, and the appeal by the Revenue was dismissed as infructuous. The Tribunal set aside the impugned final assessment order due to lack of jurisdiction by the Addl. CIT. Order Pronounced: The order was pronounced in the open Court on 07/06/2024.
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