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TMI Blog2024 (6) TMI 1431X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer under the Income Tax Act, 1961. Accordingly, the Jt. Commissioner of Income Tax in absence of an order u/s. 120(4)(b) of the Act cannot exercise or perform all or any of the powers and functions conferred on or assigned to, an A.O under this Act. A corollary flowing thereto is that the Jt. Commissioner of Income Tax in absence of an order u/s. 120(4)(b) of the Act cannot frame the assessment u/s. 143(3) of the Act. As decided in Tata Sons Ltd. [2016 (10) TMI 1228 - ITAT MUMBAI]had, inter alia, held that Addl. Commissioner of Income Tax can perform functions and exercise powers of an AO only if he is specially directed u/s. 120(4)(b) of the Act. 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 before us, therefore, the calling into question of the same by the assessee company before us would not be hit by the prescribed time limit contemplated in Section 124(3) of the Act, which as observed by us hereinabove, is in context of the territorial jurisdiction of the A.O. Thus we quash assessment for want of valid assumption of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of Community Welfare and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 5. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law in making disallowance of Rs. 1, 09, 52, 951/- on account of additional depreciation and the same is confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 6. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law by treating income of Rs. 123, 42, 91, 452/- as Income from other sources there by disallowing the deduction u/s 80IA of Income Tax Act, 1961 and disallowing personal administrating expenses by Rs. 43, 04, 142/- and Rs 10, 64, 876/- u/s 43B of Income Tax Act, 1961 and confirmed by Ld. CIT (A), the same is against the facts & also against the law, hence may kindly be deleted. 7. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law by adding disallowance of Rs 14, 01, 06, 197/- made u/s. 14A to re-compute book Profit u/s 115JB and the same is confirmed by Ld. CIT(A), the same is against the facts & also against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of additional depreciation Rs. 1, 09, 52, 951/- Also, the A.O after making an addition of the amount disallowed by him u/s. 14A of the Act, re-worked out the "book profit" of the assessee company at Rs. 2823, 43, 92, 054/-. 5. Aggrieved the assessee company carried the matter in appeal before the CIT(Appeals) who upheld the aforesaid additions/ disallowances made by the A.O. 6. The assessee company being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 7. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and material available on record as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 8. As the assessee company has assailed the validity of the jurisdiction assumed by the A.O, i.e. Jt. CIT, Range-1, Bilaspur for framing the assessment vide his order u/s. 143(3) of the Act dated 01.03.2013, therefore, we shall first deal with the same. 9. Shri Salil Kapoor, Ld. Authorized Representative (for short 'AR') for the assessee company at the threshold submitted that the Joint Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for want of valid assumption of jurisdiction on his part. The Ld. AR had thereafter drawn our attention to the definition of term "Assessing Officer" contemplated in Section 2(7A) of the Act. In sum and substance, it was the claim of the Ld. AR that as the Jt. CIT, Range-1, Bilaspur had framed the assessment vide his order u/s. 143(3) of the Act dated 01.03.2013 without there being any order u/s. 120(4)(b) of the Act conferring upon him the jurisdiction of the A.O, therefore, the consequential assessment framed by him u/s. 143(3) of the Act dated 01.03.2013 being devoid of any force of law is liable to be quashed. 11. As the assessee company has assailed the validity of the jurisdiction assumed by the Jt. CIT, Range-1, Bilaspur for framing the assessment vide his order u/s. 143(3) dated 01.03.2013, therefore, the Ld. Departmental Representative (for short 'DR') was directed to obtain a report from the A.O. 12. On the next date of hearing, the Ld. DR had placed on record a report dated 12.06.2023 of the DCIT, Bilaspur wherein, the latter has stated that the order u/s. 120(4)(b) of the Act was passed by the Commissioner of Income Tax pursuant to CBDT Notification based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.03.2024 fixed the matter for necessary clarification. 16. On the next date of hearing, i.e. 15.04.2024, the Ld. CIT-DR at the threshold submitted that as intimated by the DCIT, Circle-1(1), Bilaspur, the directions of the Bench were duly complied and a reply dated 08.01.2024 (through proper channel) was forwarded to the bench (through speed post) on 18.01.2024. 17. Considering the aforesaid facts, the registry after verifying the records had placed before us a letter dated 08.01.2024 (supra) of the DCIT, Circle-1(1), Bilaspur (received vide speed post through proper channel). It was stated by the registry that inadvertently the aforesaid letter dated 08.01.2024 was tagged with another appeal of the assessee company which was posted for hearing on the same date. 18. Be that as it may, we have perused the letter dated 08.01.2024 of the DCIT, Circle-1(1), Bilaspur. The DCIT, Circle-1(1), Bilaspur in his aforesaid letter had stated that in his earlier letter dated 12.06.2023, it was inadvertently stated by him that an order u/s. 120(4)(b) of the Act was passed in place of Section 120 of the Income Tax Act, 1961. Accordingly, it was requested by him that the mention of order u/s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur to exercise or perform the powers and functions of the A.O in the case of the present assessee company before us. 20. We shall now deal with the sustainability of the assessment order passed by the Jt. CIT, Range-1, Bilaspur u/s. 143(3) dated 29.01.2014 in absence of any order u/s. 120(4)(b) of the Act conferring upon him the jurisdiction to exercise or perform the 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 sub-section (3) to Section 143 of the Act which reads as under: "143(3) On the day specified in the notice issued under sub-section (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 Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary flowing thereto is that the Jt. Commissioner of Income Tax in absence of an order u/s. 120(4)(b) of the Act cannot frame the assessment u/s. 143(3) of the Act. 23. We find that ITAT, "H" Bench, Mumbai in the case of Shri Kishore Vithaldas Vs, JCIT-17(2), Mumbai, ITA No, 7397/Mum/2016 and ITA No. 5661/Mum/2017 dated 16.10.2019, had observed, that Jt. CIT/Addl. CIT cannot validly 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 exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned. So far 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.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 judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do a certain thing in a certain manner, the same must be done in that manner or not at all. A delegation of power is essentially a legislative function. Such a power of delegation must be provided by the statute. The director himself for certain matters is the delegating authority. He, unless the statute expressly states, cannot sub-delegate his power to any other authority. In any event, if an authority, 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 power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals), who had observed that as per Section 2(7A) of the Act, ACIT/DCIT, ADIT/DDIT or the ITO would be considered as A.O who had been vested with jurisdiction u/s. 120(1) or u/s. 120(2), but the Addl. CIT/Jt. CIT, Addl. DIT/Jt. DIT would act as A.O only if they are empowered u/s. 120(4)(b) of the Act in writing. In fact, we find that a similar view had been taken by the ITAT, Delhi in the case of a group 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 aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment 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 sub-section (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 juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment was framed on the basis of the notice issued under Sec. 143(2) by the assessing officer who had no jurisdiction to issue the same at the relevant point of time quashed the assessment. Apart from that, the aforesaid view is also supported by the order of the ITAT, Kolkata 'B' Bench in the case of OSL Developers (p) Ltd. Vs. ITO, (2021) 211 TTJ (Kol) 621 and that of ITAT, Gauhati Bench in the case of Balaji Enterprise 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 sub-section (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. For the sake of clarity, the observations of the Hon'ble Apex Court in the case of Kanwar Singh Saini Vs. High Court of Delhi (supra) are culled out as under: "22. There can be no dispute regarding the settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior court, and if the court passes order/decree having no 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A), the same is against the facts & also against the law, hence may kindly be deleted. 2. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law in making addition of Rs. 1, 04, 86, 57, 120/- notionally to total income on account of lower rate of power tariff on account of sales to the holding company and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 3. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law in making disallowance of the expenditure of Rs 1, 30, 31, 661/- incurred under Rehab Compensation Scheme and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 4. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law in making disallowance of the expenditure of Rs. 6, 50, 24, 740/- incurred on account of Community Welfare and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 5. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law in making disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law in disallowing credit of TDS/TCS amounting to Rs 22, 04, 251/- and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 14. The appellant reserves its right to add, amend, or alter the grounds of appeals on or before the date: the appeal is finally heard for disposal." The assessee company vide an application dated 07.03.2022 has raised additional grounds of appeal which reads as under: "1. That, the assessment order passed dated 29.01.2014 for AY 2011-12 by the Joint Commissioner of Income Tax (JCIT) is illegal, bad in law and without jurisdiction as the JCIT was not the competent person to pass the said assessment order. 2. That, the JCIT who passed the assessment order dated 29.01.2014 was not competent to pass the said order and as such the assessment order is liable to be quashed." As the adjudication of the additional ground involves purely a question of law which would not require looking any further beyond the facts available on record, therefore, we have no hesitation in admitting the same. Our aforesaid view that wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-11 and 2011-12. As in the present case before us, i.e. ITA No. 202/RPR/2017, the Jt. CIT, Range-1, Bilaspur had framed the assessment u/s. 143(3) of the Act dated 29.01.2014 in absence of any order u/s. 120(4)(b) of the Act and, thus, wrongly assumed jurisdiction, therefore, our observations recorded while disposing off the appeal in ITA No. 201/RPR/2017 for A.Y. 2010-11 shall mutatis mutandis apply for disposing of the captioned appeal, i.e. ITA No. 202/RPR/2017 for A.Y. 2011-12. In this case also, we quash the order passed by the Jt. CIT, Range-1, Bilaspur u/s. 143(3) of the Act dated 29.01.2014 for want of valid assumption of jurisdiction on his part. 44. As we have quashed the assessment for want of valid assumption of jurisdiction, therefore, we refrain from adverting to and dealing with the contentions raised by the assessee company qua the merits of the case which, thus, are left open. 45. In the result, appeal filed by the assessee company in ITA No. 202/RPR/2017 for A.Y. 2011-12 is allowed in terms of our aforesaid observations. 46. In the result, both the appeals of the assessee company are allowed in terms of our aforesaid observations. Order pronounced in open cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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