9911796707
TMI Blog2025 (2) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... ed therein. Although the AO claimed that the pen drive was found in the possession of an employee, subsequently those employees have denied allegation of the Assessing Officer and stated that no such pen drive was found during the course of search. Even Mr. Puneet Dalmia, Managing Director of Dalmia group also denied having knowledge of any pen drive found in the possession of employee and contents recorded therein. Therefore, the presumption with regard to contents of documents has been drawn against the assessee, without there being any corroborative evidence to link such documents to the assessee. If at all any presumption can be drawn on such documents, then the same can be drawn against Dalmia group and the onus shall be on the Dalmia group to produce cogent material to rebut presumption u/s 132(4A). The Dalmia group never alleged that the transactions belong to the assessee. The additions made by the AO on the basis of third-party evidence, without providing this evidence to the assessee and allowing cross examination is contrary to law and settled position. AO is erred in making additions towards consideration received by Dalmia Bharat Enterprises Ltd. towards sale of sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. as agent/benamidar of the assessee. 3. The CIT(A) erred in stating that the Assessing Officer had erroneously drawn a presumption u/s 132 (4A) in respect of a third party i.e. assessee with regard to the evidence found in the search in Dalmia group without appreciating the fact that the Assessing Officer analysed the evidences found during that search including dated entries in the accounts "Sh J.Reddy" and "J.R a/c" email and SMS communication between key persons of Dalmia group and of the assessee and a note on capital gains on sale of share of M/s Bharathi Cement Corporation Pvt. Ltd. before coming to his conclusion. 4. The observation of CIT(A) that the addition was not justified because the assessee does not have regular business transactions with Dalmia group is erroneous since existence of regular business transactions between the parties is not mandatory and in the light of the fact that the payments were made on 'quid pro quo' basis as discussed in the assessment order. 5. The CIT(A) erred in granting relief on the ground that there was no corroborative evidence to conclude that the assessee was the beneficiary of Rs. 139.67 cr without appreciating the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res of M/s Sandur Power Company Ltd. 11. The appellant craves leave to, add to, amend or modify the above grounds of appeal either before or at the time of hearing of he appeal, if it is considered necessary. 3. The brief facts of the case are that the assessee, an individual and Director in a company, filed his return of income for A.Y.2011-12 on 30.09.2011, declaring total income of Rs. 413,36,00,420/-. The case was selected for scrutiny to examine "the reasons and genuineness for high claim of refund out of TDS" and accordingly notice u/s 143(2) of Income Tax Act, 1961 ("the Act") dated 08.09.2012 was issued and served on the assessee on 13.09.2012 by the DCIT, Circle-2(3), Hyderabad. Subsequently, as per action plan of the Board, the case was picked up by the Additional Commissioner of Income Tax, Range- 2, Hyderabad for completion of scrutiny assessment, by virtue of powers of concurrent jurisdiction and accordingly notice u/s 143(2) and specific questionnaire u/s 142(1) of the Act were issued on 03.08.2013. In response, the authorised representative of the assessee appeared from time to time and filed relevant details as called for. 4. During the course of assessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat any lockers are maintained by the group in the name of employees. The Assessing Officer based on the investigation report of Directorate of Investigation, New Delhi, coupled with statements recorded from various employees, observed that during the search action on 27.01.2012 at the residence of Shri Joydeep Basu, Manager(Treasury) of M/s Dalmia Bharat Enterprises Ltd, one pen drive was found and seized. A cloned copy of pen drive was prepared and examined. Extracts of relevant portions of the seized records shown that one account, by name "RumCurrt" was found on pen dive and this file contained "J.Reddy" account, extract of which is reproduced on page 8 and 9 of assessment order. Further, a note on capital gains on shares of Bharati Cement Corporation Ltd. was also found at "Confidential Files" and the same has been reproduced on page 10 of the assessment order. The Assessing Officer had also considered certain e-mail and SMS extracts and the same has been reproduced on page 11 and 12 of the assessment order. A statement on oath was recorded from the employees, in respect of pen drive, where Shri Joydeep Basu admitted that the pen drive belongs to him and it contains data belon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p) for consideration of Rs. 146.54 crores @Rs.671/- per share. The cost of acquisition of shares in the case of Dalmia group is Rs. 95 crores leaving a gain of Rs. 51.54 cr. For tax purposes, after considering indexed cost, the taxable gain (Long Term Capital Gain) arrived at Rs. 30,99,68,666/-. On this amount, tax works out to Rs. 6,86,42,561/- and the same has been rounded off to Rs. 6.87 crores. As this cost has been met out of sale proceeds, the cash in hand after meeting tax liability would be Rs. 139.67 cr., which apparently rounded off to Rs. 139 cr. and the same has been paid to assessee group on various dates recorded in the unaccounted payments in the records of Dalmia group. The entry contained "J.Reddy" means, the amount paid to Mr.Jagan Reddy and this fact is further confirmed by e-mail and SMS correspondence between Dalmia group employees and Shri Vijay Sai Reddy. Therefore, he opined that the shares of Bharati Cement Corporation Ltd. held on paper in the name of Dalmia Bharat Enterprises Ltd. were held only for name's sake and the real owner is the assessee group. As soon as the shares were sold and consideration received from M/s Parcifim SAS on 16.04.2010, the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third party, M/s Parcifim SAS. The assessee is neither the legal owner of the shares of Bharati Cement Corporation Ltd. nor the beneficial owner. Therefore, the transactions of sale of shares by third party cannot be regarded as transaction of assessee, only on the basis of some documents found from the third party's possession, without any corroborative evidence to prove the allegation that the assessee is real beneficiary of the amount received by Dalmia Bharat Enterprises Ltd. The assessee further contended that the name of the assessee does not appear in the seized papers and neither does the name of Shri Vijay Sai Reddy appear in those documents, which refer to payments made. Further, during the course of assessment proceedings, it was clarified that Mr. Murli has no connection with the assessee and there is no statement of assessee recorded admitting such transactions. Further, even the employees/associates of Mr. Puneet Dalmia have never implicated the assessee, in any manner whatsoever. Although, the Assessing Officer alleged that the shares of Bharati Cement Corporation Ltd. were held in the name of Dalmia Bharat Enterprises Ltd. as a benami/agent, but real owner is the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount. Although the statement recorded from the employees contained modus operandi of Dalmia group in handling unaccounted cash and also discussion about the papers contained in the pen drive, neither investigation carried out by the Directorate of Investigation, New Delhi, nor the Assessing Officer has ascertained the nature of entry contained in the said pen drive and also the person to whom the said amount is paid. Further, the papers relied upon by the Assessing Officer including investigation report from Delhi have not been given to the assessee and also no opportunity of cross examination is provided by the Assessing Officer. In the absence of any evidence to link the assessee to the documents found in the possession of Dalmia group and further in the absence of any identification of J.Reddy or JR account in the enquiry, merely on the basis of some documents, it cannot be alleged that the assessee has received sum of Rs. 139 crores, as recorded in the pen drive found during the course of search in the case of Dalmia group. Therefore, directed the Assessing Officer to delete the addition of Rs. 139.67 crores, comprising of Rs. 95 crores on protective basis and Rs. 44.67 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rprises Ltd. is nothing, but sale of shares of the assessee, as agent/benamidar and therefore, the Assessing Officer has rightly made additions towards profit derived from sale of shares on substantive basis in the hands of the assessee u/s 56(1)(vii) and further towards cost of acquisition on protective basis, because the substantive addition has been made in the name of Bharati Cement Corporation Ltd. The Ld.CIT(A),without considering the relevant facts, simply deleted the additions made by the Assessing Officer. She, therefore submitted that order of the CIT(A) should be reversed and addition made by the assessing officer should be upheld. 10. The learned counsel for the assessee, Shri Vijay Mehta, CA, supporting the order of the Ld.CIT(A) submitted that the Assessing Officer drawn presumption u/s 139(4A) of the Act on the basis of documents found in the third party's possession, without appreciating the fact that the presumptions as contained u/s 139(4A) can be drawn only against a person on whose possession, such documents were found. Further, documents found during the course of search in the Dalmia group and reference to Shri J.Reddy or JR is not identified. There is no spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch contained an account by name "RumCurrt" and the said account contained the name J.Reddy and JR account against which, certain amount was recorded. The Assessing Officer noted that the said pen drive contained note on capital gains in respect of Dalmia Bharat Enterprises Ltd. towards sale of equity shares of Bharati Cement Corporation Ltd. During the course of search in the case of Dalmia group, statements from various employees of the group and Shri Puneet Dalmia, Managing Director were recorded, and several questions were raised with regard to bank lockers opened by the Dalmia group and unaccounted transactions of cash receipts and cash payments to various persons/entities. However, there is no single question, in respect of the documents and account by name "RumCurrt" claimed to have found in the pen drive seized from the residence of one employee. Similarly, there is no question from any employee with regard to JR account. The statement recorded from employees were confronted to Shri Puneet Dalmia, Managing Director of Dalmia Group and also raised a question about the account by name J.Reddy and JR account and in response, he denied any knowledge about the said account and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot subject matter of this appeal. A statement recorded before the Delhi Investigation Wing do not contain any question with respect to the identity of the person behind the accounts as J.Reddy or JR accounts. This person/entity, JR or J.Reddy was never identified by the employees of Dalmia group as recorded in the pen drive. Further, a direct question, in this regard was put forth to Puneet Dalmia, in the statement recorded u/s 131 of the Act on 17.01.2012, where he denied that he knows any person, J.Reddy and further, although subsequently, once again statements were recorded from various employees, but none of them identified the assessee as a person, J.Reddy, whose account is found in the pen drive consisting parallel cash book of Dalmia group. Therefore, based on the investigation report, coupled with statements recorded by the Investigation Wing, Delhi from various persons present during the search proceedings in the case of Dalmia group, nothing or no evidence was brought on record to implicate the transactions recorded in the so called pen drive to the assessee. Further, although the Assessing Officer has discussed a note on capital gains in respect of Dalmia Bharat Enterpri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cloned during the search proceedings. The Assessing Officer could not link the said documents to the assessee either by way of any corroborative evidence or from the statement of the employees recorded during the course of search. Therefore, merely on the basis of suspicion or surmises, the presumption as contained in section 132(4A) cannot be drawn against the assessee, when such documents were not found in the possession of the assessee or seized from the assessee during the course of search. In our considered view, a cardinal principle of taxation that suspicion, however, strong cannot take the place of evidence and this principle is supported by the decision of Hon'ble Supreme Court in the case of CIT Vs. Daulatram Rawatmull (1964) 53 ITR 574 (SC). It is a well settled law that loose papers and documents cannot possibly be construed as books of accounts regularly kept in the course of business and this principle is supported by the Hon'ble Supreme Court in the case of Central Bureau of Investigation Vs. V.C.Shukla (1988) 8 SSC 410. A similar view has been taken in the case of Chauharmal Vs. Commissioner of Income Tax (1988) 172 250 (1) 38 Taxmann 190 (SC), where it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the documents found in the pen drive seized from the employees of Dalmia group, in our considered view, no additions can be made merely on the basis of presumption that the assessee may be beneficiary of the said document by bringing the theory of 'quid pro quo', without any evidence to support the allegation of 'quid pro quo' theory . As noted in earlier paragraphs, the assessee was not holding any official position at relevant point of time, to influence any person for favoring or benefit to the Dalmia group and therefore, in the absence of any evidence to the contrary, it cannot be alleged that these transaction is part of quid pro quo and whatever consideration received by third party for sale of shares of a company can be assessed in the hands of the assessee as income u/s 56(1)(vii) of the Act. 14. At this stage, it is relevant to refer to various decisions relied upon by the learned counsel for the assessee. The assessee has relied upon the decision of Hon'ble High Court of Delhi in the case of CIT Vs. Sant Lal [2020] 118 taxmann.com 432 (Delhi), where, Hon'ble High Court, in light of provisions of section 132(4A) and documents found during the course of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been rendered by the CIT (A) as well as by the ITAT. Nothing has been pleaded in the memorandum of appeal to persuade the Court to hold that those findings are perverse or contrary to the facts on record. Secondly, there is not a whisper in the order of the AO about any bag recovered from the premises of the Assessee during the search of the Assessee's premises on 22nd March 2006. There is no such averment even in the memorandum of appeal filed before this Court. The material referred to in the order of the AO is that which was recovered from the premises of Mr. Brij Mohan Gupta and nothing else. That material has been discussed threadbare in the order of the CIT (A). Detailed reasons have been given as to why that material was insufficient to link the Assessee with "MP Gupta? whose name finds mention in the diary and the documents seized from the premises of Mr. Brij Mohan Gupta. 14. Consequently, the Court is not persuaded to permit the Revenue, for the first time, before this Court to set up an entirely different case of there having been a bag seized from the premises of the Assessee which according to the Revenue contained incriminating material against the Assessee." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfronted with the assessee during the assessment proceedings, we observe from the record that the assessee has consistently denied having any transactions with the Dalmias. From the record submitted before us, such stand of the assessee was communicated to the Assessing Officer vide letter dated 04.03.2014 (Para no. 3.1 of assessment order). Further communication to this effect was made vide letter dated 20.03.2014 addressed to the Assessing Officer (Para no. 3.2 of assessment order). Further, we observe that the Assessee's statement was recorded u/s. 131(1) of the Act on 11.05.2012 by ADIT (Inv), New Delhi, who had carried out a search in the case of Dalmia group, which has been reproduced by the Assessing Officer on Para 11.8 of his order. In the said statement also, the assessee has denied having any transactions or business dealings with the Dalmias. 17. We also observe that the assessee also filed an affidavit before the CIT(A) (Para 7.7 of the CIT(A) order) wherein the assessee has reiterated that he does not have any business dealings or transactions with the Dalmias. It is also a fact on record that the said affidavit has not been disproved by the Assessing Officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of addition admitted before the Settlement Commission by the Dalmias is way too small than the addition made in the case of the assessee. Although the Department has strongly objected this before the Settlement Commission (Pg no 13 of ITSC order), the application has been accepted and nothing has been brought on record to show that the order of the Settlement Commission has been reversed or even challenged. In any case, even if the person from whom the documents have been found out have accepted the Correctness of transaction before the Settlement Commission, in our considered view, the same is not binding on the assessee. The similar view was expressed in the decision of Jaipur Bench of the Tribunal in the case of Moti Developers v. ACIT in ITA No. 101/Jp/2017 dated 07.07.2017. Further, it is brought to our notice that the seized MOUs relied upon by the Department are undated, unsigned (by either party) and titled as 'draft'. It is the duty of the AO to bring on record that the same was acted upon, at the same time, the Dalmia Group has gone to ITSC to settle the issue, this itself does not prove that unsigned MOUs were actually acted upon and how it is linked to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of business. Such evidence would, therefore, be outside the purview of section 34 of the Evidence Act, 1972. The ratio of the landmark decision of Apex court in the case of Central Bureau of Investigation v V.c.Shukla& Ors (supra) relied upon by the learned counsel would apply. We are, therefore, of the considered opinion that the Revenue would not be justified in resting its case on the loose papers and documents found from the residence of a third party even if such documents contain narrations of transactions with the assessee-company. At this stage we may also refer to the provisions of section 132(4A). The presumption under the provisions of section 132(4A) would in any case not be applicable to a third party from whose possession such papers and documents have not been found by the Revenue. The Revenue has further relied upon the statements of Shri Sureshbhai and Shri Deepak Mehta partners of M/s Gokul Corporation. We find merit in the contention of the learned counsel that such statements recorded at the back of the assessee could not ipso facto include the case against the assessee particularly when the maker of the statements have not been allowed to be interrogated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer in assumption of jurisdiction u/s 120 of the Income Tax Act, 1961. Therefore, the same may be admitted and adjudicated on merits. In this regard, he relied upon the decision of the Hon'ble Supreme Court in the case of CIT Vs. NTPC 229 ITR 383 (SC). 23. Ld. CIT-DRs, Ms. Narmada and Ms. Harita, on the other hand, strongly opposing admission of additional ground submitted that the assessee has taken additional ground for the first time before the Tribunal and questioned the authority and jurisdiction of the Addl. Commissioner of Income Tax (Addl.CIT) who passed the assessment order on the ground that unless the Addl. CIT possess valid jurisdiction and authority u/s 120(4)(b) of the Income Tax Act, 1961, he cannot act as A.O to pass the assessment order. But, fact remains that, as per provisions of Sec. 124(3) of the Act, the issue of jurisdiction can only be questioned within the prescribed time allowed under the Act. In this case, the assessee had taken additional ground, for the first time before the Tribunal without raising any objection either before the A.O or the Ld. CIT(A) and hence, additional ground raised by the assessee required fresh investigation into facts which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of the powers and functions of the A.O, if he is directed at u/s 120(4)(b) of the Act. Unless he was directed by a specific order under said section, he cannot perform any of the powers and functions of the A.O. The Ld. AR further submitted that the JCIT/Addl. CIT were not an A.O as per the definition of Assessing Officer as defined u/s 2(7A), until the deification was amended by the Finance Act, 2007 with retrospective effect from 01.06.1994. Further, even after the amendment, the Addl. CIT/JCIT can exercise or perform the power of an A.O, only if he is directed under clause (b) of sub-Sec. (4) of Sec. 120 of the Act. Further, by virtue of amendment brought to Sec. 2, sub sec. 7A by Finance Act, 2007 corresponding amendment was also made to Sec. 120(4)(b) of the Act, with retrospective effect from 01.06.1994 by vesting jurisdiction of A.O on the JCIT/Addl. CIT, if the board by virtue of general or special order authorizes/empowers the Director General of Income Tax (in short 'DGIT) or Chief Commissioner of Income Tax (in short 'CCIT') or Pr. Commissioner of Income Tax (in short 'Pr. CIT) to issue orders u/s 120(4)(b) of the Act, vesting the powers of A.O to the Addl. CIT/JCIT. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Sec. 120(1)&(2) of the Act, are very clear as per which, the Income Tax authority shall exercise all or any of the powers and perform all or any of the functions conferred on or as the case may be assign to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities. The DR further submitted that the directions of the Board under Sub Sec. 120(1) may authorize any other Income Tax Authority to issue order in writing for the exercise of the powers and performance of the functions by all or any of the other income tax authorities are subordinate to it. She, further, referring to the provisions of Sec 120(6) of the Act, submitted that notwithstanding anything contained, any directions or order issued under this Section, or in Sec. 120 (4) of the Act, the Board may by notification in the official gazette direct that for the purpose of this Act, by income tax authority exercising and performing the functions, in relation to the said person or clause of persons shall be such authority as may be specified in the notification. She further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the ITAT Delhi Bench in the case of Mega Corporation Limited Vs. ACIT, 62 Taxmann.com 351, however said order has been reversed by the Hon'ble Delhi High Court in Income tax appeal No. 128/2018 vide order dated 20.03.2017, where the Hon'ble High Court clearly held that the assessee's logic appears to be incorrect in view of amendment to Sec. 2(7A) and jurisdiction conferred u/s 120 (1) & (2) of the Act, because the A.O includes the Dy. CIT. The court further observed that once the officer is authorized u/s 120 of the Act, then there is no need of separate order u/s 120(4)(b) of the Act. Therefore, it is incorrect to argue that the Addl. CIT does not have valid jurisdiction to pass reassessment order. 28. Per contra, the Ld. AR for the assessee submitted that the department is relying on the order No. CIT/restructuring ; 2014/jurisdiction /2014-15 dated 15.11.2014, but fact of the matter is that said order is a general order passed under sub Sec. (1) &(2) of Sec. 120 of the Act, which conferred general jurisdiction to the Addl. CIT/JCIT to Act as an A.O in respect of persons or clause of persons. Further, the department has again failed to establish that the A.O possesses s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dl. CIT-Range-2 and thus, in absence of specific order u/s 127 of the Act, the Addl. CIT cannot assume jurisdiction to pass the assessment order of the assessee. 30. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. The solitary issue that came up our consideration from additional ground raised by the assessee is, whether on the facts and in the circumstances of this case, the Addl. CIT does possess valid jurisdiction and authority to pass assessment order u/s 143(3) of the Act. The provisions of section 2(7A) of the Act, deal with the term definition of Assessing Officer. As per said section, the term Assessing Officer would include the JCIT/Addl. CIT, provided such JCIT/Addl. CIT is empowered by the Board by a general or specific order, authorising the Pr.CCIT/CCIT or Pr. CIT to empower the JCIT/Addl. CIT by way of separate order u/s 120(4)(b) of the Act, to act as an Assessing Officer. Further, as per provisions of section 120(4)(b) of the Act, The Board, may by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein, authorise any Pr.DGIT/Pr.CCIT/C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. In this case, the Board has issued a notification in 2014 and authorized and empowered the DGIT/Pr. CIT/CIT to direct that the Addl. CIT or JCIT as the case may exercise the powers and perform the functions of the A.O in respect of territorial areas or persons or clause of persons. Further, CCIT, Hyderabad has passed a separate order u/s 120 (1) & (2) of the Act, and empowered the Addl. CIT/JCIT, Range2, Hyderabad to act as an A.O in cases of person or clause of persons as mentioned in the said notification and said order covers to alphabet of the assessee name. Therefore, when the Board has authorized Pr. CIT to authorize the JCIT/Addl. CIT to act on an A.O and also the CCIT has passed separate order authorizing the JCIT/Addl. CIT to act as an A.O to discharge the functions and powers of A.O, then the separate order u/s 120(4)b of the Act, does not required. We find that the board has issued notification u/s 120(4)b of the Act, vide notification No. 64/2014 dated 13.11.2014 and authorized the DGIT/Pr. CCIT/CCIT/Pr. CIT to authorize and empower JCIT and ACIT to Act as an A.O and also to perform functions and powers of A.O in respect of persons or clause of persons. But there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the A.O on the ground that if no search was initiated, notice under Section 153A of the Act could not have been issued, cannot be curtailed on the ground that such objection was raised beyond the period referred to in sub section (3) of the Sec. 124 of the Act. Section 124 of the Act pertains to jurisdiction of A.O Sub Section (2) of Section 124 provides that where the question arises under said section, as to whether on A.O has jurisdiction to assessee any person, such question shall be determined by the authority prescribed under the said sub-section. Sub Section (3) of section 124 provides time limits for a person to call in question jurisdiction of an A.O. Clause (c) of sub-section (3) of section 124 provides that no person shall be entitled to call in question jurisdiction of an A.O where an action has been taken under section 132 or section 132A, after the expiry of one months from the date on which he was served with a notice under sub section (1) of Sec. 153A or sub-section (2) of Sec. 153C of the Act or after the completion of the assessment, whichever is earlier. In clear terms, the time limit for raising objection to the jurisdiction of the A.O prescribed under sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBDT u/s 120 (1)&(2), authorizing the JCIT/Addl.CIT to act as an assessing officer, but fact remains that even though the both officers having concurrent jurisdiction over the assessee, but both authority simultaneously cannot proceed to assess the case of the assessee. Further, there is a distinction between concurrent exercise of power and joint exercise of power. When power has been conferred upon two authorities concurrently, either one of them can exercise such power. When once a decision is taken to exercise power by any one of those authorities, such power must be terminated by that authority alone and further, such termination of power can be done only by passing an order u/s 127 of the Act. In the present case, since there is no order u/s 127 of the Act, transferring the case from the DCIT, Circle-2(1) Hyderabad to Addl.CIT, Range-2, Hyderabad, in our considered view, on this count also, the assumption of jurisdiction by the Addl.CIT, Range-2 is without any authority and consequently, assessment order passed by the assessing officer is without any jurisdiction and thus, void ab-initio and nullity. 36. We further noted that this issue is squarely covered in favour of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclude the JCIT/Addl. CIT, provided such JCIT/Addl. CIT is empowered by the Board by a general or specific order, authorising the Pr.CCIT/CCIT or Pr. CIT to empower the JCIT/Addl. CIT by way of separate order u/s 120(4)(b) of the Act, to act as an Assessing Officer. Further, as per provisions of section 120(4)(b) of the Act, The Board, may by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein, authorise any Pr.DGIT/Pr.CCIT/CCIT/Pr. CIT to issue orders in writing that the powers and functions of an Assessing Officer to JCIT/Addl. CIT in cases of persons or clasee of persons etc. If you go through provisions of section 2(7A) in conjection with section 120(4)(b) of the Act, then it would be very clear that unless the JCIT/Addl. CIT is empowered by the Pr.CCIT/CCIT/Pr.CIT by an order in writing to act as an Assessing Officer and perform and function such functions, then he cannot act as an assessing Officer. 13. In this legal background, if you examine the case of the assessee, we find that the Reveune has failed to file any order passed by the Pr.CCIT/CCIT/Pr.CIT, u/s 120(4)(b), authorising the JCIT to act as an Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order passed by the A.O is bad in law and liable to be quashed. The relevant findings of the Tribunal are as under: "6. We have heard the rival submissions which were done in an elaborate manner by both the parties before us. We have also applied our mind to the decisions cited by both the parties. The short point that arises for our consideration in this preliminary ground is whether the Addl. CIT, Range -1(3), Mumbai had the competence and jurisdiction to pass the assessment order in the case of the assessee. We find that this issue had been dealt at length by the co-ordinate bench of this tribunal in assessee's own case for the Asst Year 2002-03 in ITA Nos. 6981 & 7071 /Mum/2005 ; CO No. 40/Mum/2017 ; ITA Nos. 1108 & 1836 /Mum/2008 dated 30.6.2017 wherein it was held as under:- "13. We have carefully and patiently considered elaborate submissions made by bath the parties orally as well as in writing. We have also applied our mind to the decisions cited at the Bar. Specific issue raised before us which merits consideration is, whether the Addl CIT, Range-1(3), had the competence and jurisdiction to pass the assessment order in case of the assessee. As far as the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant jurisdiction by virtue of direct ion or orders issued under sub-section (1) or (2) of Section 120 or any other provision of the Act. The second limb of the provision says, the KIT or JDIT if directed under clause (b) of sub-section (4) of section 120, can perform powers and functions of an Assessing Officer. It is relevant to observe, the provisions of section 2(7A) underwent a change by virtue of amendment brought by Finance Act, 2007. As pe r the said amendment in the second limb of section 2(74) along with the JCIT and JDIT, Addl. CIT/Addl. DIT were also to be treated as an Assessing Officer if they were directed to act as an Assessing Officer in terms of section. 120(4)(b). This amendment brought to section 2(7A) was with retrospective effect from 1st June 1994. Corresponding to the amendment made to section 2(7A), the Finance Act, 2007, amended the provisions of section 120(4)(b), providing that the Board in writing can empower the CCIT/CIT to issue orders directing an Addl. CIT/ADIT to act as an Assessing Officer in respect of any specified area or persons or classes of persons or classes of income or cases of classes of cases which earlier would only be vested wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey can exercise powers and functions of an Assessing Officer, only, if they are directed to do so under clause (b) of sub-section (4) of section120. Thus, vesting of power of Assessing Officer on different income tax authorities have been specifically demarcated under section 120 of the Act. A conjoint reading of Section 2(7A) an Section 120 would make it clear, as far as ACIT, ADIT, DCIT, ADIT; DDIT and ITO are concerned, they have to be vested with the power of Assessing Officer under section 120(1) or (2), whereas, AddI. CIT, Addl. DIT, KIT, MIT can be vested with the power of Assessing Officer under Section 120(4)(b). In a notification issued under section 120(1) and 120(2), Addl. CIT cannot be vested with power to act as an Assessing Officer. Therefore, notification no.228 of 2001 dated 31" July 2001, cannot be said to be vesting power of Assessing Officer with the Addl. CIT. Similar is the situation with notification doted 1st August 2001, issued by the CIT, Mumbai, as it is a notification issued under section 120(1) and 120(2) and not under sub-section (4)(b). The third notification dated 8th August 2001, has been issued by the Addl. CIT, Range-.1(3), Mumbai, vesting jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s concerned, though, it is issued under section 120(4)(b) of the Act, however, it authorizes only the JCIT and JDIT to exercise the powers and function of the Assessing Officer and it is not in respect of Addl. CIT or Addl. DIT. Thus, none of these notifications can validly authorize or empower the Addl. CIT, Range-1(3) to act as an Assessing Officer in the present case. In case of Mega Corporation Ltd. vs. ACIT, [2015] 155 ITD 1019, the Tribunal while deciding identical issue of exercise of powers and functions of Assessing Officer by Addl. CIT dealt with the aforesaid notifications relied upon by the learned Departmental Representative and following the decision of the Hon'ble Delhi High Court in Valvoline Cummins v/s DCIT, [2008] 307 FUR 103 (Del) held that without a notification under section 120(4)(b) authorizing the Addl. CIT to exercise the powers and functions of the Assessing Officer, assessment order passed by the Addl. CIT is without jurisdiction, hence, invalid. Moreover, it was held that once a proceeding has been initiated by an officer having valid jurisdiction, without any order of transfer under section 127 of the Act, the Addl CIT cannot be vested with power t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there being any order from the Commissioner of Income Tax authorizing him to act as Assessing Officer of the assessee. Under these circumstances, it is' bounden duty of the Revenue to establish legal competence and authority of the officer passing the assessment order, if so challenged by an assessee at any stage. 3.12. We have examined this issue. it is well accepted position that the Tribunal is a final fact finding body. Requisite documents required for establishing legal authority of the Assessing Officer who had passed the assessment order are expected to be available in the assessment records. Thus, the legal issue raised by the assessee falls in the category of cases which can be decided on the basis of material held on record. 3.13 Further, it is noted by us that the aforesaid grounds are purely legal grounds and do not require any investigation of fresh facts and can be decided on the basis of records held on record. It has been, held by the Hon'ble Supreme Court in the case of National Thermal Power Corporation 229 ITR 383 as well as ' the other judgments as have been relied Upon by the Ld. Counsel in its petition that assessee should be permitted to rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of assessment proceedings in view of restrictions imposed by the provisions contained in section 124 of the Act Hon'ble Delhi High Court in the aforesaid case held as under:- "This is well settled that mere acquiescence in the exercise of powers by a person who does not have jurisdiction to exercise that power cannot work as an estoppel against him." 3.15. It is further noted by us that in the case before us, a challenge has been made about the legal competence of the Additional Commissioner of Income tax and his jurisdiction to exercise the powers and perform the functions of the Assessing Officer of the assessee and to carry out the assessment proceedings and frame the assessment order in accordance with the provisions of the Income tax Act, 1961. Thus, reliance, upon the provisions contained in Section 124 of the Act would be of no help to the Revenue as the assessee has not challenged either territorial jurisdiction or irregular exercise of jurisdiction by the Additional Commissioner of Income Tax but challenge was made to the authority and legal competence itself of the Additional Commissioner of Income tax to pass the impugned assessment order upon the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer and to pass an assessment order in the case of the assessee. He also took us through provisions of section 120 to argue that Additional Commissioner or Joint Commissioner could have exercised the power of an Assessing Officer only if they were so authorized specifically by their jurisdictional Commissioner. In support of his proposition, he relied upon following judgments: 1. Mega Corporation v: Add!; CIT (62 taxmann.com351 (Del. ITAT) 2. Bindal Apparels Ltd. ACIT 104 TTJ 950(Del) 3. City Garden vs. ITO (21 taxmann.com 373 (Jodhpur ITAT) 4. Micro fin Securities (P) Ltd. vs Add!. CIT i SOT 302 (Luk.) 5. Prachi Leathers Ltd. 26L/Luk/201 0 in ITA No. 744/Luk/2004 order dat. 29.03.2010 6. 1-farvinder Singh Jaggi vs. ACIT 67 Taxmann.com 109(DeL ITAT) 7. Dr. Nalini Mahafan vs. OfT (Inv.) 257 ITR 123(Del. HC) 8. Ghansh yam K. Khabrani vs. ACIT 346 IT!? 443(Bom. HC) 9. CIT vs. SPL's Siddhartha Ltd. 345 ITR 223 (Del. HC) 3.18. Per contra, Ld. CIT-DR, with the assistance of Ld. AO, vehemently opposed the submissions of the Ld. Senior Counsel and argued that all the Additional" Commissioners have concurrent jurisdiction upon all the assesses falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It is noted by us that for the impugned assessment year; after the return was filed by the assessee, a notice was issued by the ACIT Cir-2(3), Mumbai, dated 5th September 2091, intimating the assessee about change in jurisdiction and Claiming that jurisdictional was with the said officer. The relevant part of the said notice is reproduced hereunder: "Sub: Change in jurisdiction-Intimation regarding In terms of Notification No. SO No. 732(E) dated 31.7.2001 of Central Board of Direct Taxes and consequential Notification dated 7.8.2001 of CIT. MC-11, Mumbai, jurisdiction over your case with effect from 1.8.2001 vests with the undersigned. All IT./W.T. and Interest tax Returns and necessary correspondence on that account are therefore required to be filed with the undersigned. All payments towards Income-tax (by way of Advance tax, Regular tax or S.A. tax), Interest tax, Wealth tax and payment u/s. 115-0 of the I.T. Act are also to be made w.e.f. 1.8.2001 to the credit of the ACIT Circle 7(3). Mumbai. 2. Similarly, jurisdiction over the Managing Director, Director, Manager; and Secretary of your company also vests with the undersigned vide Notifications quoted supra. Consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and, therefore, any one of these officers can be assigned the jurisdiction by the higher authority. But, exercise of the jurisdiction between both the officers shall always be mutually exclusive to each other. If the jurisdiction has been assigned to one of the officers, it shall not be exercised by the other, and lithe jurisdiction is taken away from the former officer and assigned to the latter, then it shall be exercised by the latter only and. hot by the former. Thus, the jurisdiction can be exercised by only one Assessing Officer at any given point of time who has been duly assigned the jurisdiction by. the competent authority. The assignment of jurisdiction to an officer and its transfer from one officer to the other can be made only through the prescribed process of law. Section 127 of the Act contains provisions regarding process to be followed by the Revenue Officers and their powers for transfer of cases from one Assessing Officer to the other. Section 127(1)inter-alia provides and mandates that the Commissioner may after recording his reasons for doing so, transfer any -case from one Assessing Officer subordinate to him to any other Assessing Officer (whether w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the assessment will be dealt with by one superior officer and the other part will be dealt with by one subordinate officer. ..." ............It appears to us quite clearly that there is a distinction between concurrent exercise of power and joint exercise of power. When power has been conferred upon two authorities concurrently, either one of them can exercise that power and once a decision is taken to exercise the power by any one of those authorities, that exercise must be terminated by that authority only. It is not that one authority can start exercising a power and the other authority having concurrent jurisdiction can conclude the exercise of that power. This perhaps may be permissible in a situation where both the authorities jointly exercise power but it certainly is not permissible where both the authorities concurrently exercise power. One example that immediately comes to the mind is that of grant of anticipatory bail. Both the Sessions Judge and the High Court have concurrent power. It is not as if a part of that power can be exercised by the High Court and the balance power can be exercised by the Sessions Judge. If the High Court is seized of an application f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Officer, Range 6(2), Kanpur to .the Addl. CIT, Range-6,Kanpur and therefore, the assessment framed by the Addl CIT, Range-,Kanpur irrespective of the fact as to whether he was authorized to perform the functions of an AO or not, is illegal and void ab initio for want of jurisdiction. Consequently, we are of the opinion that the assessment order in the present case dated 31.3.2003 passed by the Addl. CIT, Range (6), Kanpur was illegal and void ab initio for want of jurisdiction. Consequently, the assessment order is quashed." 9.2 Consequently on this count also, the assessment made on 29.12.2008 by the Additional Commissioner is illegal and bad in law for want of jurisdiction. 10. for the reasons aforesaid we hold that the order of assessment dated 29.12.2008 was without jurisdiction and therefore is quashed as such. In result, ground Nos. 1 and 2 are allowed." 3.23. In the case before us, the facts are 'identical. it is noted that Ld. CIT-op as well as the Assessing Officer (present incumbent) who was personally present during the course of hearing before us, jointly stated that no such order (as prescribed under section 127(1) required to be passed by the jurisdictiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he role as an Assessing Officer, despite the fact that for all the other purposes 'Joint Commissioner' meant Additional Commissioner as well., as per section 2(25C). It is clear from the facts that by way of subsequent amendment by Finance Ad, 2007, words 'Additional Commissioner' have also been inserted along with words 'Joint commissioner', in section 2(7A) which defines the term for 'Assessment Officer' In case, the legislature would have intended and meant that for the purpose of acting as Assessing Officer, 'Joint Commissioner' and 'Additional Commissioner' means one and the same, then there was no need to come out with an amendment made by Finance Act, 2007, wherein the word 'Additional Commissioner' was also inserted in the definition of 'Assessing Officer' as contained in section 2(7A). Thus, it is clear as per the plain reading of the statute that when the assessment order was passed, the 'Additional Commissioner was not authorized to act as Assessing Officer. 36. In addition to the above, it further noted by us that only that Joint Commissioner ' was authorized to act as an Assessing Officer who was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us of no use to Revenue as far as issue before us is concerned. So for as Notification No.267/2001 is concerned, it reads as follows:- "In exercise of the powers conferred by clause(b) of sub-section (4) of section 120 of the income - tax Act,1961(43 of 1961), the Central Board of Direct Taxes, hereby directs that the Joint Commissioners of Income Tax or the Joint Directors of Income tax, shall exercise the. powers and functions of the Assessing Officers, in respect of territorial area or persons or classes of persons or incomes or classes of income or cases, or classes of cases, in respect of which such Joint Commissioners of Income tax are authorised by the Commissioner of Income tax, vide Government of India, Central Board of Direct. Taxes notification number S.O.732(E) dared 31.072001, S.O.880(E) dated 14.09.2001 S.0.881(E) dated 14.09.2001, S.O.882(E) 14.09.2001 and S.0. 883(E) dated 14.09.2001 published in the Gazette of India, Part II, Section 3, sub-section (ii), Extraordinary: (emphasis supplied) 3.29. Perusal of the aforesaid notification reveals that only those Joint Commissioners shall exercise the powers and functions of the Assessing. Officers who have been author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se even in the notifications discussed above only 'Joint Commissioners' were authorized to perform the role of the Assessing Officers. However, the Revenue is not able to bring before us any order of the Commissioner authorizing even the 1 Joint Commissioner' to perform powers and' functions ' of Assessing Officer of the assessee. As per the discussion made by us in 'detail in the earlier part of our order, it is dear that no such order is available in the assessment record or in any other record. Legal consequences of the same have been elaborately analysed m many judgments by various courts. 3.32. Identical issue came up for consideration before Delhi Bench of Income Tax Appellate Tribunal in the case of Mega Corporation, supra. The bench discussed entire law available on this issue and held that an 'Additional Commissioner of Income Tax' cannot ipso facto exercise the powers or perform the function of an Assessing Officer under the Act. He can perform the functions and exercise the powers of an Assessing Officer only if he is specifically directed under section l2Q(4)(b) of the Act to do so. Relevant part of the observations of the bench is repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. under the Act In other. Words, an Additional Commissioner can only be directed u/s 120(4)(b) of the Act to "Assistant Commissioner" or "Deputy Commissioner" or "Assistant Director" or "deputy Director" or Income Tax Officer" under the Act. This interpretation also 'derives strength from the provisions contained in section 120(4)(b) of the Act which reads as under: "120.Jurisdiction of income-tax authorities (4) Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,- (b) empower the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specif ied area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, references in any other provision of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite clear that so far as Addl. Commissioner is concerned firstly he has been included in the definition of Assessing Officer" given under section 2(7A) of the Act with effect from 1.6.1994 as a result of retrospective amendment made by the Finance Act, 2007 but at the same time, it/s also clear that the Add/. Commissioner will be Assessing Officer as envisaged in section 2(7A) so amended only if he is directed under clause (b)of cub-section (4) of section 120 to exercise or perform all or any of the powers and functions concerned on or assigned to an Assessing Officer; meaning thereby that the Addl. CIT can function or can exercise the powers and perform the functions of an Assessing Officer if he is empowered by the CBDT as required under clause (b) of sub-section (4) of section 120. 18.1 So far as the issue before us in the present appeal is concerned, it is now clear from the provisions as discussed hereinbefore that the Additional CIT could act and exercise the powers of an AO only in consequence upon delegation of such authority by the Board, Chief Commissioner of Income-tax or Commissioner of Income-tax as envisaged in the provisions of section 120(4)(b) of the Act. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii Mahajan (supra), first of all we are of the opinion that the Addl. CIT, Range-6, Kanpur having not been empowered to exercise or perform the powers or functions of an Assessing Officer, the assessment framed by him was illegal and void ab initio. " ..... 3.34. It is further noted that similar view has been expressed by Jodhpur Bench of ETA in the case City Garden Vs. ITO 21 taxman.com 373 (Jodhpur) wherein it has been held that in the absence of a specific order issued in pursuance to Section 120(4)(b) specifically authorizing Joint Commissioner of Income Tax to exercise the powers and perform the function as conferred on or assigned to an Assessing Officer by or under the Act or a notification under section 120 of the Act, he is not competent to act as an Assessing Officer and pass an assessment order. 3.35. Simi lar view has been taken by Lucknow Bench of ITAT in case of Micro fin Security Pvt. Ltd vs. Additional CIT 94 TTJ 767 wherein it was held that in absence of any allocation being made in favour of Additional Commissioner to make an assessment, he cannot assume for himself such an authority so as to pass an assessment order. 6. Simi lar view has-been taken recently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Supreme Court in the case of CIT Vs. M. H. Ghaswala observed that it is a normal rule of construction that when a statue vests certain powers in an authority to be exercised in a particular manner, then that authority is bound to exercise it only in the manner provided in the statue only. 3.39 Hon'ble Bombay High court dealt with a similar situation in the case of Ghansham K.Khabrani Vs. ACIT 346 ITR 443 wherein the said assessee raised an issue that requisite sanction prescribed u/s 151 for reopening of an assessment was required to be obtained by the AO from Joint Commissioner of Income tax whereas the same was granted by Commissioner* of Income tax and therefore the same was nullity in the eyes of law. Revenue took a stand mat sanction was granted by an officer superior in rank and therefore, no prejudice was caused to the assessee But Hon'ble High. Court did not agree with the contention of the Revenue and observed that:- ..........The expression "Joint Commissioner" is defined in section 2(28C) to mean a person appointed to be a Joint Commissioner of Income Tax or an Additional Commissioner of Income-tax under section 117(1). Section 151(2) mandates that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation/orders passed under section 120(4)(b), inasmuch as, n 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board has authorized Pr. CIT to authorize the JCIT/Addl. CIT to act an A.O and also the Pr. CIT has passed separate order authorizing the JCIT to act as an A.O to discharge the functions and powers of A.O, then the separate order u/s 120(4)b of the Act, does not required. We find that the board has issued a notification u/s 120(4)b of the Act, vide notification No. 64/2014 dated 13.11.2014 and authorized the DGIT/Pr. CCIT/CCIT/Pr. CIT to authorize and empower JCIT and ACIT to Act as an A.O and also to perform functions and powers of A.O in respect of persons or clause of persons. But, there is no order from the Pr. CIT or any other authority u/s 120(4)b of the Act, authorizing the JCIT to act as an A.O and also to perform functions and power of A.O in the case of the assessee. Although, the Revenue has relied upon the order passed by the Pr. CIT dated 15.11.2014 u/s 120 (1) & (2) of the Act, but such order does not conferred the authority and jurisdiction to the JCIT to Act as an A.O, because as per the provisions of Sec. 2(7A) of the Act, the definition of A.O includes Addl. CIT/JCIT who is directed under clause (b) of Sub Sec. (4) of Sec. 120 of Act, but not under Sec. 120(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case. 17. Coming to another argument of the ld. DR in light of section 124(3) of the Act. The ld. DR submitted that as per section 124(3), no person shall entitled to call in question the jurisdiction of an Assessing Officer after expiry of 30 days from the date of issue of notice u/s 142(1), 143(2) and after completion of assessment. We find that the Hon'ble Bombay High Court, in the case of Bansilal B Raisoni vs. ACIT, (2019) 260 Taxman 281(Bombay) had considered the issue in light of section 124(3) of the Act, and held that the time limit provided u/s 124(3) of the Act, has a relation to the A.O territorial jurisdiction, but said time limit would not apply to the case where the assessee contents the action of the A.O is without authority of law and therefore wholly without jurisdiction. The relevant findings of the Hon'ble High Court are as under: "7. We are also in agreement with the contention of the Counsel for the petitioner that the petitioners objection to the jurisdiction of the A.O on the ground that if no search was initiated, notice under Section 153A of the Act could not have been issued, cannot be curtailed on the ground that such objection was raised be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e powers and functions as that of an A.O over the case of the assessee company before us. 21. Before proceeding any further, we deem it fit to cull out subsection (3) to Section 143 of the Act which reads as under: "143(3) On the day specified in the notice issued under subsection (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment:" (emphasis supplied by us) Ostensibly, as per sub-section (3) to Section 143 of the Act, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment. As the assessment can only be framed by the "Assessing Officer", therefore, we shall now look into the definition of the term "Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assume jurisdiction and pass an assessment order in absence of an order u/s. 120(4)(b) of the Act. Also, a similar view had been taken by the ITAT, Delhi in the case of Mega Corporation Ltd. vs. ACIT, [2015] 155 ITD 1019. Also, ITAT, Mumbai in the case of Tata Sons Ltd. Vs. ACIT, Circle-2(3), ITA Nos. 4497 & 4542/Mum/2005 had, inter alia, held that Addl. Commissioner of Income Tax can perform functions and exercise powers of an Assessing Officer only if he is specially directed u/s. 120(4)(b) of the Act. For the sake of clarity, the observations of the Tribunal are culled out as under: "3.26. In addition to the above, it further noted by us that only that 'Joint Commissioner' was authorized to act as an Assessing Officer who was directed under clause (b) of sub- section 4 of section 120 to exercise or perform all or any of the powers and functions of an Assessing Officer as defined u/s 2(7A) of the Act. Now, if we refer to section 120, its perusal makes further clear that only CBOT can empower the Chief Commissioners or Commissioners for issuance of orders to the effect that powers and functions of an Assessing Officer for a particular assessee or classes of assessee sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officers, in respect of territorial area or persons or classes of persons or incomes or classes of income or cases, or classes of cases, in respect of which such Joint Commissioners of Income tax. are authorised by the Commissioner of Income tax, vide Government of India, Central Board of Direct Taxes notification number S.0.732(E) dated 31.07.2001, S.0.880(E) dated 14.09.2001, 8.0.881(E) dated 14.09.2001, S.O. 882(E) dated 14.09.2001 and S.O. 883(E) dated 14.09.2001 published in the Gazette of India, Part II, Section 3, subsection (ii), Extraordinary. (Emphasis supplied) 24. Also, we find that a similar view had been arrived at by the ITAT, Lucknow in the case of Prachi Leather (P). Ltd. Vs. Addl. CIT, ITA No.26/L/2010 dated 08.12.2010, wherein, after drawing support from the judgment of the Hon'ble High Court of Delhi in the case of Dr. Nalini Mahajan Vs. DCIT, (2002) 257 ITR 123 (Del.), it was held as under: "16.2 From the contents of the aforesaid provisions, it is quite clear that so far as Addl. Commissioner is concerned, firstly he has been included in the definition of "Assessing Officer" given under section 2(7A) of the Act With effect from 1.6.1994 as a res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority, which had no jurisdiction to issue such an authorization did so, the same would be liable to be quashed as ultra vires. Thus, unless and until an amendment is carried out, by reason of the redesignation itself, read with the provisions of the General Clauses Act, the Addl. Director does not get any statutory power to issue authorization to issue a warrant. Therefore, the Addl. Director (Investigation) cannot be said to have any power to issue any authorization or warrant to Joint Director. Consequently, notification dt. 6th Sep. 1989 is not valid in law to the said extent. 18.2 So far as the present case is concerned, though we are concerned with the powers of Additional CIT but the proposition of law laid down by the Hon'ble High Court which was, though in relation to powers' of Additional Director (Investigation), is fully applicable to the present case. 18.3 In view of the aforesaid facts, circumstances and the discussion and following the law laid down by the Hon'ble Delhi High Court in the case of Dr. Nalini Mahajan (supra), first of all we are of the opinion that the Addl. CIT, Range-6, Kanpur having not been empowered to exercise or perform the powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entity of the assessee company, viz. Jindal Steel & Power Ltd. Vs. JCIT, Hisar, ITA No.619/Del/2015 dated 17.09.2021. The Tribunal after carrying out a conjoint reading of Section 2(7A) r.w.s. 120(4)(b) of the Act, had observed that as no order was passed by the Commissioner of Income Tax u/s. 120(4)(b) of the Act, therefore, the Jt. CIT, Hisar lacked jurisdiction to frame assessment in the case of the assessee company before them. Accordingly, the Tribunal had concluded that as the Jt. CIT, HisarRange, had not legally and validly assumed jurisdiction over the case of the assessee company, therefore, the impugned assessment order passed by him being illegal and without jurisdiction was liable to be quashed. For the sake of clarity, the observations of the Tribunal in the aforesaid case are culled out as under: "36. In the instant case, (1) there is no order by the Id. CIT invoking powers conferred u/s 120(4) wherein sub-Section (b) empowers the CIT to issue orders in writing that the powers and functions conferred on or as the case may be assigned to the Assessing Officer by or under the Act in respect of any specified areas or persons shall be exercised by the Joint Commissioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier; (c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or subsection (2) of section 153C or after the completion of the assessment, whichever is earlier. 29. Having given a thoughtful consideration to the aforesaid claim of the ld. DR we are unable to persuade ourselves to subscribe to the same. On a careful perusal of Section 124 of the Act, it transpires that the same deals with the issue of "territorial jurisdiction" of an Assessing Officer. Ostensibly, sub-section (1) of Section 124 contemplates vesting with the A.O jurisdiction over a specified area by virtue of any direction or order issued under sub-section (1) and sub-section (2) of Section 120 of the Act. On the other hand sub-section (2) of Section 12 contemplates the manner in which any controversy as regards the territorial jurisdiction of an A.O is to be resolved. Apropos, sub-section (3) of Section 124 of the Act, the same places an embargo upon an assessee to call in question t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rprise Vs. ACIT (2021) 187 ITD 111 (Gau.). Accordingly, on the basis of our aforesaid observations, we are of the view that as the assessee's objection to the validity of the jurisdiction assumed by the Jt. CIT, Range-1, Bilaspur is not an objection to his territorial jurisdiction, but in fact an objection to the assumption of inherent jurisdiction by him in absence of an order u/s. 120(4)(b) of the Act, therefore, the provisions of subsection (3) of Section 124 would not assist the case of the revenue. 30. In fact, we find that the Hon'ble High Court of Bombay in the case of Bansilal B. Raisoni& Sons Vs. ACIT, Central Circle- 1, Nashik &Anr, WP No.13391 of 2018 had, inter alia observed 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 the Assessing Officer's territorial jurisdiction. It was further observed that the time limit prescribed 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. Also, we find that the Hon'ble High Court of Bombay in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o jurisdiction over the matter, it would amount to a nullity as the matter goes to the roots of the cause. Such an issue can be raised at any belated stage of the proceedings including in appeal or execution. The finding of a court or tribunal becomes irrelevant and unenforceable/inexecutable once the forum is found to have no jurisdiction. Acquiescence of a party equally should not be permitted to defeat the legislative animation. The court cannot derive jurisdiction apart from the statute. (Vide United Commercial Bank Ltd v. Workmen, Nai Bahu v. Lala Ramnarayan, Natraj Studios (P) Ltd. v. Navrang Studios, Sardar Hasan Siddiqui v. STAT, A.R. Antulay v. R.S. Nayak, Union of India v. Deoki Nandan Aggarwal, Karnal Improvement Trust v. Parkash Wanti, U.P. Rajkiya Nirman Nigam Ltd. v. Indure (P) Ltd., State of Gujarat v. Rajesh Kumar Chimanlal Barot, Kesar Singh v. Sadhu, KondibaDagadu Kadam v. Savitribai Sopan Gujar and CCE v. Flock (India) (P) Ltd.)" 31. We, thus, are of the view that as the Jt. CIT, Range-1, Bilaspur in absence of any order passed by the specified authority u/s. 120(4)(b) of the Act had no jurisdiction to frame the assessment in the case of the assessee company be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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