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Tata Sons Limited Versus ACIT Circle 2 (3) , Mumbai And Vice-Versa

2017 (12) TMI 297 - ITAT MUMBAI

Validity of the assessment made as the Additional CIT - Lack of inherent jurisdiction - transfer of case - Held that:- Revenue has not been able to demonstrate that the Additional Commissioner of Income tax who had passed the assessment order had valid authority to perform and exercise the powers and functions of an Assessing Officer of the assessee and to pass the impugned assessment order. - Identical issue came up for consideration before the Tribunal in the case of Tata Communications Lt .....

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ed in the impugned assessment year in the additional ground taken by the assessee is different from that of A.Y. 2001-02. - He went on again and again submitting before this Tribunal that if the entire order is quashed after such a long time without deciding the merits of the case, would cause unusual financial burden on the Revenue to refund the taxes paid. The Standing Counsel should understand that this Tribunal is not to decide the mercy petition but has to decide the issue before it in .....

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valid order u/s. 120(4)(b) has well as section 127(1) of the Act would not have exercised power of a Assessing Officer to pass impugned assessment order. Accordingly, the impugned assessment order passed is without jurisdiction would have no show and, therefore, quash the same. - ITA Nos. 193, 3745/Mum/2006 And ITA No. 3658/Mum/2006 - Dated:- 27-11-2017 - Shri P K Bansal, Vice President And Shri Ram Lal Negi, Judicial Member For The Assessee : Shri Dinesh Vyas For The Revenue : Shri P C Chhotara .....

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r the impugned assessment year on 15.03.2005, which is the impugned assessment order in ITA No. 3658 & 3745/Mum/2006. 2. The assessee vide letter dated 17.11.2016 has raised additional ground of appeal, which read as under: 1. On the facts and in the circumstances of the case, the assessment order dated 15.03.2005 passed by the Additional Commissioner of Income Tax under section 143(3) is bad in law, illegal and without jurisdiction and / or in excess of jurisdiction, on the grounds amongst .....

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)(b) of the Act. Accordingly, in the absence of an order u/s 120(4)(b) conferring jurisdiction on the Additional Commissioner of Income Tax, the assessment order dated 15.03.2005 passed by him needs to be quashed. 3. The proceedings having been initiated by issue of a Notice u/s 143(2) on 15.10.2003 by the Dy. Commissioner of Income Tax, in the absence of an Order transferring jurisdiction u/s 127 to the Additional Commissioner of Income Tax, the Order of Assessment dated 15.03.2005 passed by th .....

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A No. 102/Del/2014, in a case where the proceedings have been initiated by one officer and the assessment order is passed by the another officer, the assessment order is bad in law and illegal and therefore the impugned assessment order is this case should be quashed. In ITA No. 193/Mum/2006, the assessee has raised following supplementary grounds of appeal: In the facts and circumstances of the case and in law, the appellant submits that the Order passed by the Ld. C.I.T. - 2, Mumbai dated 24th .....

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.03.2005. We, therefore, decided to dispose of the issue first relating to the admission of the additional ground. 3. The learned standing counsel for the department with regard to the admission of the additional ground argued in detail and ultimately made the following written synopsis, which read as under: 3. Being aggrieved by the assessment order, the assessee M/s Tata Sons Limited filed an appeal before the Commissioner of Income-tax (Appeals). A look at the grounds of appeal would show tha .....

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evenue was dated 9th June 2006. The appeal of the assessee was dated 12th June 2006. 6. A look at the grounds of appeal would show that the assessee challenged the order of the CIT(A) only on merits. It did not challenge the jurisdiction of the Assessing Officer (Additional Commissioner) for making the assessment. Additional Grounds 7. Thereafter, suddenly, after about ten and half years, on 17th November, 2016, in a casual manner, the assessee filed additional grounds seeking quashing of the as .....

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ibunal has been recently reported and on the basis thereof, we propose to file the additional grounds of appeal challenging the validity of the Assessment Order passed en our case. Therefore, we hereby file the enclosed additional grounds of appeal in the Appeals referred to above and filed by us with a request that these grounds may please be adjudicated by the Hon'ble Tribunal. The additional grounds raised herein go to the very root of the matter and deal with the very jurisdiction and au .....

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t similar additional ground has been admitted and decided in favour of the assessee in assessee s own case for A.Y. 2001-02 and in the case of Tata Communications Ltd. for A.Y. 2002- 03, the learned DR submitted that the decision of the Tribunal in the case of the assessee for A.Y. 2001-02 has not been accepted by the Revenue and the Revenue has filed appeal before the Hon ble High court, copy of the questions of law and grounds of appeal filed before the High Court was submitted before us. It w .....

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onal ground. The assessment order was passed on 15.03.2005, the CIT(A) passed the order on 31.03.2006. The assessee did not question the jurisdiction of the Assessing Officer before the CIT(A). The assessee filed appeal before the Tribunal on 12.06,2006, even at that time the ground relating to the jurisdiction was not taken up. The additional ground was filed before the Tribunal on 17.11.2016. There was a delay of ten and a half years and the assessee has to give a satisfactory explanation befo .....

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order. Our attention was drawn towards the order of the Tribunal in the case assessee s own case for A.Y. 2001-02, especially para 3.17, where the Tribunal has referred to various decisions. It was submitted that these decisions were given much prior to the decision in the case of Mega Corporation Ltd. Yet the additional grounds were not filed by the assessee therefore, as far as the assessee was concerned, it had accepted the position that the Additional Commissioner had valid jurisdiction to m .....

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ended that there was no justification for this delay. The same group represented by the same counsel had filed same additional grounds in the case of the assessee for A.Y. 2001-02 and in the case of Tata Communication Ltd. for A.Y. 2002-03 on 15.01.2016 and 29.12.2015 respectively. Once the assessee has agitated similar issue on 29.12.2015, there was no reason to file the additional ground in the impugned case on 17.11.2016. Thus, the delay of about eleven months in filing the additional grounds .....

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icer and the CIT(A), the assessee accepted the jurisdiction. The DR further stated that such a change of stand and long delay in filing the additional grounds needs to be satisfactorily explained else the additional grounds should be rejected at the threshold. In support of his contention, the learned DR citeed the commentaries from Black s Law Dictionary - Estoppel by acquiescence : estoppels arising from a party s failure to respond to a claim within a reasonable time after receiving notice of .....

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p; Ors vs. Balasaheb Tukaram Shevale & Anr. (2009) 9 SCC 352 • CIT vs. NHK Japan Broadcasting Corporation (2008) 305 ITR 137 (Del) • CIT vs. Hutchison Telecom Ltd. (2010) 323 ITR 320 (Del) Thus, it was submitted by the learned DR that if no time limit is prescribed for filing additional ground, it does not mean that it can be filed after any lapse of time in a reckless manner. Even when no time limit is provided for filing additional grounds, they should be filed within a reasonabl .....

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ed position. It was further submitted that this ground will have a bearing on other assessee s also as the assessments for other years and other assessee would have been conducted on the validity of this assessment order as the validity of this assessment order as the jurisdiction was not questioned and if the entire order is quashed after such a long time without deciding the merits of the case, unusual heavy financial burden may be put on the Revenue to refund the taxes paid. It was further su .....

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octrine of laches should be invoked for unreasonable delay in asserting the claim and the additional ground should not be accepted. It was also submitted before us that the Tribunal should first adjudicate the issue regarding the delay in filing the additional ground. Apart from the delay, it was urged that simply on the basis of the decision of the Tribunal of a different Bench, the it would not be justified that the assessee should file additional grounds of appeal for quashing the assessment .....

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ve, the additional ground should be rejected. Our attention was drawn towards the decision of Delhi High Court in the case of Mega Corporation Ltd., and the question involved therein and on that basis it was contended that in that case the High held that the Additional Commissioner had valid jurisdiction and the assessment made by him was valid. In the said decision, reference was made to section 124(3)(a) and observed that this section enacts a statutory bar to raise the question of jurisdictio .....

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me Court in the case of National Thermal Power Co. Ltd. vs. CIT [1998] 229 ITR 383 (SC). The question of jurisdiction is not a pure question of law as it requires investigation into facts particularly in an old case like this. It was also submitted that the issue regarding the jurisdiction is not appealable before the Tribunal u/s. 253 of the Act. Ultimately, it was contended that the assessee has submitted to the jurisdiction and participated in the proceedings therefore, he is debarred to take .....

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er authorities for consideration as decided by the Hon ble Delhi High court in the case of Mega Corporation Ltd. (supra). 7. The learned senior counsel for the assessee, on the other hand, contended that the additional ground raised herein go to the very root of the matter and the deal with the very jurisdiction and authority of the Assessing Officer to pass the assessment order. Therefore, it was submitted that these grounds can be admitted in the interests of substantial justice especially whe .....

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P. Ltd. [141 ITR 626 (Bom)] The learned counsel for the assessee, in rebuttal of the submission of the leaned DR that the additional ground should not be admitted on account of delay, submitted that under section 253 of the Income tax Act, the limitation is provided only for the purpose of filing of appeal and additional grounds can be filed thereafter at any time. He placed his reliance on decision of Hon ble Rajasthan High Court in the case of Shilpa Associates vs. ITO (263 ITR 317), Madad All .....

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ot applicable to the facts of the present case. On the submission of the DR that the additional ground should not be admitted by the Tribunal at this stage in view of the decision of Hon ble Delhi High court in the case of Mega Corporation Ltd. (supra), the senior counsel for the assessee pointed out that in this case the additional ground were not admitted in view of section 124(3), wherein objection to the jurisdiction of the Assessing Officer can be raised only within a time stipulated therei .....

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, also drawn a distinction between territorial jurisdiction and inherent jurisdiction in two cases viz. CIT vs. S.S. Ahluwalia [2014] 88 CCH 158 and K.K. Loomba (241 ITR 152). The Hon'ble Delhi High Court has concluded that Section 124 has relevance to territorial jurisdiction alone. He further submitted that view similar to the above is also reiterated by the Allahabad High Court in Prashant Chandra vs. CIT [2017] 81 taxmann.com 106, which forms part of the paper-book II and by the Calcutta .....

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t judgments. 9. In view of the above cases, the learned counsel for the assessee submitted that it is clear that a challenge to the inherent jurisdiction of the Additional CIT to pass an Assessment Order can be raised at any stage during the pendency of the Appeal before the Tribunal and that limitation contained in Section 124 is not relevant. The Hon'ble Supreme Court has held that challenge to the inherent jurisdiction can be raised at any belated stage of the proceedings including in app .....

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SC); ITO vs. Siemens India Ltd. & Anr. -156 ITR 11 (SC) and order of the Tribunal dated 13.07.2016 in the case of ACIT vs. Hindustan Thompson in ITA No.6729/MUM/2014 for A.Y. 2010-11. Without prejudice to the above, the leanred counsel for the assessee submitted that the Delhi High Court decision in the case of Mega Corporation Ltd. is per incurium because it has ignored two binding decisions of the Hon'ble Delhi High Court in the above cases of S.S. Ahluwalia and K.K. Loomba and, theref .....

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The Department has supported the above arguments on the basis of Allahabad High Court decision in the case of CIT vs. British India (337 ITR 64) and contended that a plea of want of jurisdiction could not be raised beyond time stipulated in Section 124. In rebuttal of the DR s reliance on the decision of the Allahabad High Court in the case of CIT vs. British India (supra), the learned counsel for the assessee submitted that this case is not applicable because it is confined to challenge the ter .....

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and Deepak Agro Foods vs. State of Rajasthan, the learned counsel for the assessee submitted that none of the above Supreme Court decisions supports the case of the Department. In fact, the first decision in the case of Kiran Singh notices the fundamental distinction between territorial jurisdiction on the one hand and subject matter or inherent jurisdiction on the other hand. In paragraph 6 of its judgment, the Apex Court has observed as follows: It is a fundamental principle that a decree pas .....

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ond case of Rafique Bibi, the decision is delivered keeping in mind the aforesaid distinction based on inherent jurisdiction. Further in the case of Deepak Agro Foods, similar view is taken in as much as in paragraph 15 it is held as follows: Where an authority making order lacks inherent jurisdiction, such order would be without jurisdiction, null, non est and void ab initio as defect of jurisdiction of an authority goes to the root of the matter and strikes at its very authority to pass any or .....

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ilarly, he contended that in the case of Bindal Apparels (supra), relied upon the above decision it has been noted that Section 2 (7A) of the Act has been amended with retrospective effect. It may be observed that this has been done upon concession of both the parties. There is no further discussion as regards the implications or the impact of the retrospective amendment. In rebuttal, it is submitted that the decisions of the co-ordinate Bombay Benches in the cases of Tata Sons Limited and Tata .....

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dditional CIT could not pass an Assessment Order and perform the functions of an Assessing Officer in spite of the retrospective amendment. Further, the learned counsel submitted that it is well settled that a decision of the Delhi High Court is not binding on Bombay Tribunal Benches and in this regard reliance is placed on the decisions of the jurisdictional Bombay High Court in the following three cases: a) CIT vs. Thana Electricity Supply Ltd. - 206 ITR 727 (Bom). b) Geoffrey Manners vs. CIT .....

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tion of the Additional Commissioner of Income tax, who has passed the impugned assessment order, has the authority of law to act as a Assessing Officer and to pass the impugned assessment order. We have examined this issue. We noted that similar additional ground was raised before this Tribunal in the case of the assessee for AY 2001-02 and D Bench of this Tribunal in ITA No. 4497 & 4542/Mum/2005, vide its order dated 31.10.2016admitted the additional ground by holding as under: 3.12. We hav .....

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s 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 in the other judgments as have been relied upon by the Ld. Counsel in its petition that assessee should be permitted to raise legal grounds at any stage, if they go to the root of the matter. 3.14. Revenue s argument to reject the additional grounds due to acquiescenc .....

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tablish the authority and legal competence of its officer to pass the assessment order, as and when it is called upon to do so. No order can be sustained in the eyes of law if its author does not have requisite sanction of the law. If an order does not possess requisite strength in the eyes of law and is void ab-initio, then it will remain so even if there is acquiescence or participation by the assessee in the proceedings carried out by the AO to frame the assessment order. It is well settled l .....

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f law and not on the basis of conduct of the assessee. This issue is not res-integra. Immediate reference in this regard can be made on the judgment of Hon ble Bombay High Court in the case of Inventors Industrial Corporation Limited Vs. CIT 19 4 ITR 548 (Bombay). Similar view was taken by Hon ble Gujarat High Court in the case of P.V. Doshi Vs. CIT 113 ITR 22 (Guj) . Recently Hon ble Delhi High Court handled a similar situation in the case of Valvoline Cummins Ltd 307 ITR 103 (Del) wherein chal .....

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n 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, 196 .....

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Mega Corporation Ltd Vs. Additional CIT 155 ITD 1019 (Delhi) following the judgment of Hon ble Delhi High Court in the case of Valvolines Cummins Ltd, supra. 3.16 In view of the facts and circumstances, of this case and the judgments of Hon ble Supreme Court and Hon ble Bombay High Court relied upon by the Ld. Counsel in its petition as mentioned above, we find that these additional grounds deserve to be admitted and therefore, these are admitted for our adjudication. 13. We also noted that simi .....

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an Assessing Officer . Thus, in this context, facts/material which require examination are the statutory notices issued under section 142(1)/143(2) by the concerned Assessing Officer and the relevant notifications conferring jurisdiction upon the DCIT/Addl CIT to act as an Assessing Officer of the assessee. Since the statutory notices issued under section 142(1)/143(2) are already part of the assessment record and the notifications conferring power on the concerned officer to act as an Assessin .....

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icipated in the assessment proceeding that will not make the assessment order sacrosanct, if the assessee can otherwise prove that the officer completing the assessment had no authority/jurisdiction to do so. Therefore, following the ratio laid down in the decisions relied upon by the learned Sr. Counsel for the assessee, we are inclined to admit the additional/supplementary grounds raised by the assessee and will proceed to adjudicate the same at the very outset. Both these decisions involve id .....

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els by laches and also that once the assessee has participated in the proceedings the assessee has no right to take or challenge the jurisdiction of the Assessing Officer by taking additional ground after the expiry of substantial period i.e. more than twelve years. We are surprised to see such type of arguments from the side of the Standing Counsel. The Standing Counsel must be aware that it is not a case where the Tribunal has to condone the delay for filing of the appeal. Condonation of delay .....

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ugh not raised earlier. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) is too narrow a view to take of the powers of the Tribunal. Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to .....

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evenue has gone in appeal before the High Court. He also submitted before us copy of the questions of law and the grounds of appeal filed before the High Court. But when we asked whether the appeal filed by the Revenue has been admitted or not, he did not say that it has been admitted rather, contended that since the appeal has been filed before the High Court, this Tribunal should not admit the additional ground and decide the said issue. On our questioning he further explained that the High Co .....

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ved for constitution Special Bench. Subsequently when the hearing concluded, the Revenue filed an application, dated 20.10.2017, for constitution of Special Bench on 24.10.2017 in the case of the assessee for A.Y. 2002-03. In our view, the senior Standing Counsel tried that the case should not be disposed off and be kept in abeyance on one pretext or the other even though the arguments of the case has taken three days the Bench could not devote time to other cases. The Standing Counsel must be a .....

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ion from the Hon ble President in this regard, to whom the application was moved by the Revenue. We noted that the argument taken by the learned Standing Counsel has already been dealt with by this Tribunal in the case of the assessee for A.Y. 2001-02 and in the case of Tata Communications Ltd for A.Y. 2002-03, which are binding on us. 15. The Standing Counsel before us also tried to distinguish the decision of the assessee with that of the decision of the Delhi Bench of this Tribunal in the cas .....

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e admission of the additional ground. No doubt there the assessee has relied on the decision of Delhi Bench in the case of Principal CIT vs. Mega Corporation, but relying on a particular decision does not mean that his additional ground be decided by us. We have gone through the decision of Delhi High Court in the case of Mega Corporation Ltd. (supra) and noted that various High Courts have taken a contrary view on this issue, as under: • CIT vs. Ramesh D Patel [362 ITR 493] (Guj) • Pr .....

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206 ITR 727), wherein the High Court has laid down the following principles for the precedents: The general principles with regard to precedents are: (a) The law declared by the Supreme Court being binding on all courts in India, the decisions of the Supreme Court are binding on all courts, except, however, the Supreme Court itself which is free to review the same and depart from its earlier opinion if the situation so warrants. What is binding is, of course, the ratio of the decision and not ev .....

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of another single judge or a Division Bench of the same High Court. It would be judicial impropriety to ignore that decision. Judicial comity demands that a binding decision to which his attention had been drawn should neither be ignored nor overlooked. (ii) A Division Bench of a High Court should follow the decision of another Division Bench of equal strength or a Full Bench of the same High Court. If one Division Bench differs from another Division Bench of the same High Court, it should refe .....

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her binding precedent for another High Court nor for courts or Tribunals outside its territorial jurisdiction. The decision of the Hon ble Delhi High Court, as has been relied upon by the learned Standing Counsel is not binding on this Tribunal and the Tribunal is not bound to refer the issue involved in this appeal for constitution of the Special Bench. 16. We also noted that the Gujarat High Court in the case of Ramesh D Patel (supra), while dealing with a similar issue, we noted that at page .....

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ct to the territorial jurisdiction of the Assessing Officer and has no relevance in so far as the inherent jurisdiction for passing an order of assessment under section 153A of the Act is concerned, when no search authorisation under section 132 was issued or requisition under section 132A of the Act was made. Similarly Hon ble Allahabad High Court in the case of Prasad Chandra vs. CIT (supra) in para no.22 has categorically held as under: 22. As regards the question of determining the jurisdict .....

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questioned the territorial jurisdiction of the assessing officer and the assessing officer held that the assessee had lost the right to raise the objection by efflux of time. We, as such, find no substance in the case of the appellant. 17. No doubt, the Delhi High Court, as has been heavily relied upon by the learned Standing Counsel for the department, in the case of Mega Corporation Ltd. (supra), has taken a contrary view but that decision does not have a binding precedent on us. This is the .....

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nal CIT, who passed the assessment order was not having the inherent jurisdiction, we therefore, proceeded to take this ground first. Both the parties have elaborately and exhaustively argued on this issue and have also made written submissions before us. We have carefully considered the submissions cited before us during the course of hearing. The specific issue before us, which merits our consideration is whether the Additional Commissioner of Income-tax Circle 2(3), Mumbai, who passed the ass .....

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notice was issued by the ACIT Cir 2(3), Mumbai, dated 5th September 2001, 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-II, Mumbai., jurisdiction over your case with effect .....

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f your also vests with the undersigned vide Notifications quoted supra. Consequently, all the ; of die above persons and follow up correspondences on that account are to be made with the All payments towards Income-tax and Wealth-tax w.e.f 01.08.2001 of the above persons are also to be made to the credit of ACIT Cir.2(3) Mumbai. This may be carefully noted. Your sFaithfully Sd/- (Jagadish Prasad Jangid) ACIT Cir. 2(3), Mumbai. 3.21 Thus, from the above, it is clear that initially the jurisdictio .....

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issioner of Income Tax became AO of the assessee and passed the impugned assessment order. 3.22. Thus, the first issue raised by the assessee before us is that in this case assessment proceedings were initiated by the Assistant Commissioner of Income Tax but were taken over in the middle of the proceedings by the Additional Commissioner of Income Tax and completed by him without there being any valid transfer of jurisdiction from the Assistant Commissioner of Income Tax to the Additional Commiss .....

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n between the 'concurrent jurisdiction' and 'joint jurisdiction'. When we talk about assignment of 'concurrent jurisdiction1 to two officers of different hierarchy, it does not mean that both the officers can simultaneously or jointly work upon the assessment proceedings of same assessee. But it means that both the officers are legally eligible for assignment of jurisdiction of the assessment proceedings of a_ assessee and, therefore, any one of these officers can be assigned .....

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nt of tune 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 .....

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h Court in the case of Vaholines Cummins Ltd. (supra). Similar view was taken by the Delhi bench of the Tribunal in the case of Mega Corpn. Ltd. (supra) following the aforesaid judgment of the Delhi High Court. Relevant part of order is reproduced below for the sake of ready reference:- ......9. Another contention specifically raised is that there is no transfer order u/s 127 of the Act from transferring the case from the DCIT to the Addl. CIT, Range 6, and New Delhi. The learned CIT(A) has held .....

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by the Addl. CIT after issue of notice u/s 143(2) by the DCIT Circle 6(1) does not affect the taxability of the appellant or appellant is not adversely affected by the order. The Hon'ble Delhi High Court in the above context in the case of Valvoline Cummins Ltd. (supra) has held as under: 28. On the issue of 'concurrent' jurisdiction between the Additional Commissioner and the Deputy Commissioner, learned counsel for the assessee relied upon a decision of the Calcutta High Court in .....

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voked. It cannot be construed as concurrent jurisdiction when one part 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 .....

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ticipatory 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 for anticipatory bail it must deal with it and similarly if the Sessions Judge is seized of an anticipatory bail, he must deal with it. There can be no joint exercise of power both by the High Court as well as by the Sessions Judge in re .....

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after having passed the assessment order, the Additional Commissioner seems to have washed his hands of the matter and left it to the Deputy Commissioner to decide the stay petition filed under section 220(6) of the Act. We are of the opinion that this was not permissible in law. 9.1 We therefore hold that applying the above judicial position that assessment has to be completed by the authority who has initiated the proceedings for making assessment-and any other authority can take over the pro .....

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notice under section 143(2) of the Act having been issued by the Income-tax Officer, Range 6(2), Kanpur on 16.8.2002, it was Income-tax Officer alone who could frame the assessment subject however to the fact that that the assessment could be framed by any other officer also provided there was an order of transfer of jurisdiction over assessee's case from Income-tax Officer, Range-6(2), Kanpur to that officer under section 127(4) of the Act, but so far as present case is concerned, the Reven .....

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er hi 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, hi result, ground .....

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Income Tax who had passed the impugned assessment order. Thus, impugned assessment order had been passed without assuming jurisdiction as per law. 3.24. Next issue raised by the Ld. Senior Counsel was that the Additional Commissioner who had passed the impugned assessment order was not authorized to act as assessing officer of the assessee and pass the impugned assessment order. We analyzed the provisions of law in this regard and find that section 2(7A) defines the term of Assessing Officer as .....

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onferred on, or assigned to, an Assessing Officer under this Act. 3.25. Subsequently, the word 'Additional Commissioner' was also added in the said definition by Finance Act, 2007, with retrospective effect from day 01.06.1994. Thus, from the above, it is clear that when the impugned assessment order was passed, definition of the word 'Assessing Officer1 did not include 'Additional Commissioner of Income Tax'. It is further noted that section 2(28C) defines Joint Commissioner .....

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f all the above sections makes it clear that prior to amendment made by Finance Act, 2007, the legislature treated 'Additional Commissioner' and 'Joint Commissioner' differently for the purposes of performing the 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(28C). It is clear from the facts that by way of subsequent amendment by Finance Act, 2007, words .....

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ner' 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 Commissioner1 was not authorized to act as Assessing Officer. 3.26. In addition to the above, it further noted by us that only that 'Joint Commissioner1 was authorized to act as an Assessing Officer who was directed under clause (6) of sub- section 4 of section 120 to .....

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g before us any order wherein any specific authority was given by any Chief Commissioner or Commissioner authorizing the impugned Additional Commissioner to pass impugned assessment order. We find force in the argument of Ld. Counsel that at the relevant time when the assessment proceedings were in progress, the word 'Additional Commissioner' was not available in the aforesaid section and therefore, it was not possible for the Chief Commissioner or the Commissioner to have authorized an .....

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During the course of hearing, Ld. CIT-DR had drawn our attention upon Board's Notification No.267/2001 dated 17-9-2001, Notification No.228/2001 dated 31.7.2001 and Notification No.335/2001 dated 29-10-2001 with a view to argue that the jurisdiction was assigned to all the officers including 'Additional Commissioner' for exercise of powers as Assessing Officer, and thus the Additional Commissioner of Income Tax' who had passed the impugned assessment order had inherent powers un .....

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red by clause (b) of subsection (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 Co .....

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Assessing Officers who have been authorized by the concerned Commissioners of Income tax in pursuance to the relevant notification conferring requisite powers to the concerned Commissioners. 3.30. Similarly notification No.228/2001, supra authorize the Commissioners of Income tax to issue orders for authorizing in turn, the Joint Commissioner of Income tax who are subordinate to them for exercising of the powers and performance of the functions of the Assessing Officers. It also, inter alia, aut .....

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e exercise of the powers and performance of the functions of the Joint Commissioners of Income tax, who are subordinate to them, in respect of such cases or classes of cases specified in the corresponding entries in column (6) of the Schedule-I and Schedule -II of such persons or classes of persons specified in the corresponding entries in column (5) of the said Schedules, in such territorial areas specified hi the corresponding entries in column (4) of the said Schedules, and hi respect all of .....

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f Income Tax under clause (c) of this notification............ 3.31. Thus, in view of the aforesaid notification it becomes imperative on the part of the Revenue to show us that in the case before us, the Additional Commissioner of Income tax, who had passed the impugned assessment order, was duly authorized by the jurisdictional Commissioner to do so. It is noted that any such order would not be available with the Revenue, because even in the notifications discussed above only 'Joint Commis .....

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analysed in many judgments by various courts. 3.32. Identical issue came up for consideration before Delhi Bench of Income Tax Appellate Tribunal :' the case of Mega Corpn. Ltd. (supra). The bench discussed entire law available on this issue and helcr 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 h .....

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w Delhi. According to the appellant/assessee, it is incumbent under the scheme of statute to vest the Additional CIT u/s 120(4)(6) of the Act to exercise or perform all or any of the powers and functions of Assessing Officer under the Act. 5.1 To examine the above contention, we consider it appropriate to firstly extract section 2(7A) of the Act which reads as under: 2(7A) Assessing Officers (7A) Assessing Officer means the Assistant Commissioner or 2Deputy Commissioner 3 or Assistant Director4 .....

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ng Officer under this Act; 5.2 A plain reading of the aforesaid provision would show that it is in two parts. The first part provides that Assessing Officer means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or Income Tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under section 120(1) or 120(2) or any other provision of this Act. The second part provides that Assessing Officer means the Additional Co .....

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Officer 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)(&) 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 .....

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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 this Act, or in any rule made there under to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or a Joint Director, by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requ .....

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r 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, reference in any other provision of this Act or hi any rule made there under to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or a Joint Direc .....

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ection 120(4)(6) of the Act. 3.33. Similar issue has been decided by the Lucknow bench of ITAT in the case of Prachi Leather (P.) Ltd v. AM. CIT [IT Appeal No. 26(L) of 2010, dated 8.12.2010] relying upon its earlier order in ITA No.744/2004/Lucknow for assessment year 2001-02 decided this issue on the similar lines after considering and following the decision of Hon'ble Delhi High Court in the case of Dr. Nalini Mahajan (supra). It is also noted that this decision has also been considered b .....

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Add) Commissioner will be Assessing Officer as envisaged in section 2(7A) so amended only if he directed under clause (6)of sub-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 (6) of sub-section (4) of section 120....... 18.1 S .....

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ence upon the delegation of power duly authorized by the Legislature, the Chief Commissioner of Income-tax or Commissioner of Income-tax were duty bound, if at all they were to exercise such delegated power to act according to the provisions of law; meaning thereby that it was incumbent upon the Chief Commissioner of Income-tax or the Commissioner of Income-tax, as the case maybe, if at all they wanted to authorize the Additional CIT to act and perform the functions of an AO, to pass a proper or .....

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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 i .....

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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 powers or functions of an Asse .....

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fficer 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. Similar view has been taken by Lucknow Bench of IT AT in the case of Microfin Security (P.) Ltd. v. Addl. CIT [2005] 3 SOT 302 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. 3.36 .....

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the order of the Commissioner of Income tax and, therefore, no separate order under section 127 was required to be passed by the Commissioner of Income tax. However, no such order of the Commissioner of income tax conferring the concurrent jurisdiction to the Addl. Commissioner of Income Tax over the cases of the Income tax officer is either available on assessment record, or was produced by the revenue. Thus, in absence of any such order, it can't be established that said assessment order p .....

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and perform all or any of the powers of the functions of the Assessing Officer to make assessment of Income. The Bench analysed the provisions of Section 2(7A) as it existed prior to amendment made by Finance Act, 2007. 3.38. During the course of hearing, it was also submitted by Ld. CIT-DR to defend the impugned assessment order that in any case the assessment order has been passed by an officer of the rank of Additional Commissioner which is much superior to the rank of Assistant Commissioner .....

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in the case of CIT v. Anjum M. H. Ghaswala [20011 252 ITR 1/119 Taxman 352 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 hi the case of Ghanshyam K. Khabrani (supra} wherein the said assessee raised an issue that requisite sanction prescrib .....

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ner 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 satisfaction has to be of the Joint Commissioner. The expression has a distinct meaning by virtue of the definition in section 2(28C). The Commissioner of Income tax is not a Joint Commissioner within the meaning of section 2(28C). There is no statutory provision under which power to be exercised by .....

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has not been able to demonstrate that the Additional Commissioner of Income tax who had passed the assessment order had valid authority to perform and exercise the powers and functions of an Assessing Officer of the assessee and to pass the impugned assessment order. Under these circumstances, we have no other option but to hold the same as nullity and, therefore, the impugned assessment order is quashed having been passed without authority of law. We also find that identical issue came up for c .....

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case of the assessee in A.Y. 2001-02, he could not adduce any cogent material or evidence, which may prove that the facts and issue involved in the impugned assessment year in the additional ground taken by the assessee is different from that of A.Y. 2001-02. He went on again and again submitting before this Tribunal that if the entire order is quashed after such a long time without deciding the merits of the case, would cause unusual financial burden on the Revenue to refund the taxes paid. Th .....

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principle of judicial discipline hold that in the facts of the present case, the Additional CIT in the absence of a valid order u/s. 120(4)(b) has well as section 127(1) of the Act would not have exercised power of a Assessing Officer to pass impugned assessment order. Accordingly, the impugned assessment order passed is without jurisdiction would have no show and, therefore, quash the same. 19. The learned Standing Counsel, in the end, has taken the contention that the matter may be restored t .....

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basis of notification / orders passed under section 120(4)(b) inasmuch as section 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 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 being raise .....

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