TMI Blog2019 (7) TMI 1515X X X X Extracts X X X X X X X X Extracts X X X X ..... identical and the issues are common, for the sake of convenience, these appeals were heard together and are disposed-off by this consolidated order. 2. The brief facts of the case are that the assessee company is engaged in the business of professional and financial services filed its return of income for AY 2005-06 on 31/10/2005 declaring total income of ₹ 880,66,18,700/-. The case was selected for scrutiny and notices u/s 143(2) and 142(1) of the Act, were issued. In response to notices, Shri K.Bhagat, GM Finance was attended from time to time and filed various details as called for. The assessment has been completed u/s 143(3) of the I.T.Act, 1961 on 31/12/2007 determining the total income at ₹ 11,60, ,67,02,593/-. The assesse carried the matter in appeal before the CIT(A), The CIT(A)-6, Mumbai vide its order dated 29/06/2012 partly allowed appeal filed by the assessee. Aggrieved by the Ld.CIT(A) order, the assessee as well as the revenue is in appeal before us. 3. The Ld. AR for the assessee at the time of hearing, referring to additional grounds of appeal filed vide their letter dated 16/03/2017 submitted that the issue involved in additional gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to the assesse, the Adl.CIT who passed order does not have jurisdiction unless, he had valid order u/s 120(4)(b) and 127(1) of the I.T.Act, 1961, Consequently, the assessment order passed by the Addl.CIT is bad in law and liable to be quashed. We find that the coordinate bench of ITAT, E Bench in assessee s own case had an occasion to consider an identical issue for AY 2004-05 in ITA No. 2519/Mum/2009, where, after considering relevant facts of the case in light of provision of section 120(4)(b) as well as section 127(1) of the I.T.Act, 1961 held that the Addl.CIT could not have exercised power of AO to pass the impugned assessment order, in absence of valid order u/s 120(4)(b) of the Act. The relevant findings of the Tribunal are as under:- 5. We have heard the rival submissions and perused the relevant materials on record. We find that similar issue arose before the Coordinate Bench as mentioned by the Ld. counsel. In this context, we may reproduce the following observation of the Bench in Tata Sons Ltd. (supra) : 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 esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 challenge was made to the jurisdiction of Additional Commissioner of Income Tax who had passed the assessment order. It was contended on behalf of the Revenue that challenge of jurisdiction must be made within the stipulated time during the 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 Additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Secretary of 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 jurisdiction was with ACIT Cir. 2(3), Mumbai, for passing the assessment order. Subsequently, a notice u/s 143(2) was issued by DCIT Cir. 2(3) dated 1.12.2003 who was indeed successor to the first officer. Subsequently, assessee received a dated 10 th December, 2004 from the Additional CIT range 2(3) Mumbai. Apparently, Commissioner of Income Tax was not successor of ACIT/DCIT who had issued earlier notice. But, the assessee has contended that there is nothing on record to show as to how the Additional Commissioner 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to him to any other Assessing Officer (whether with or without concurrent jurisdiction) also subordinate to him. Thus, mandatory requirement of the law in this regard is that an order In writing must be passed by the jurisdictional Commissioner of Income tax for effecting transfer of assessment proceedings from one Assessing Officer to the other. Law in this regard was explained in detail by Hon'ble Delhi High 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 that hi the cases of transfer of cases to another AO after issue of notice u/s 143(2) of the Act by another AO, the issue involves the interpretation of concurrent jurisdiction which is beyond the scope of this appeal within the restricted directions of the Hon'ble IT AT. He h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 respect of the same application for anticipatory bail. 30. In the facts of the present case, since the Additional Commissioner had exercised the power of an Assessing Officer, he was required to continue to exercise that power till his jurisdiction in the matter was over. His jurisdiction in the matter was not over merely on the passing of the assessment order but it continued in terms of section 220(6) of the Act in dealing with the petition for stay. What has happened in the present case is that 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed under section 127(1) required to be passed by the jurisdictional Commissioner of Income tax) is available in the records. Thus, it is clear that there was no valid transfer of jurisdiction to the Additional Commissioner of 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 under: Assessing Officer means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or subsection (2) of section 120 or any other provision of this Act, and the Joint Commissioner or Joint Director who is directed under clause (6) of subsection (4) of that section to exercise or perform all or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;Joint Commissioner 1 was authorized to act as an Assessing Officer who was directed under clause (6) 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 CBDT 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 shall be exercised by a 'Joint Commissioner'. Despite numerous directions, the Revenue was not able to bring 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 Additional Commissioner for exercising powers and functions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise the powers and functions of the 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, authorizes the Joint Commissioners who were so authorized by the Commissioners, to issue orders in writing to the Officers who are subordinate to them for the exercise of the powers and performance of the functions of the Assessing Officers for specified assessee or class of assessee. Relevant part of the said notification is reproduced as under for the sake of ready reference:- ......(c) authorise the Commissioner of Income Tax referred to in this notification to issue the orders in writing for the 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 class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act to do so. Relevant part of the observations of the bench is reproduced hereunder for the sake of ready reference:- '........... We have considered the arguments advanced by the parties and perused the order of the learned CIT(A), comments of the Assessing Officer and material placed on record. The controversy raised in this appeal relates to the validity of order of assessment dated 29.12.2008 passed by Additional CIT, Range 6, New 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 Director 4 or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (l)or sub-section (2) of Section 120 or any other provision of this Act, and the 6 [Additional Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 requiring approval or sanction of the Joint Commissioner shall not apply. 5.3 It will be seen that the said provision provides that Board may by general or special order and subject to such conditions, restrictions or limitations as may be specified therein 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, Assessing Officer by or under this Act in respect of any specified 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, reference in any other provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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)(6) of the Act. However, the power given to the Chief Commissioner of Income-tax or Commissioner of Income-tax being in consequence 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 order delegating such functions/powers upon hin This view of ours is fully supported by the decision of the Hon'ble Delhi High Court in the case of Dr. Nalini Mahajan v. DIT [20011 252 ITR 123/r20021122 taxman 897 wherein the Hon'ble High Court, while discussing the powers of Additional Director Investigation, held as under: It is now well-settled that when a power is given t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 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. Similar view has been taken recently in another judgment by the Delhi bench of the IT AT in the case of Harvinder Singh Jaggi v. Asstt. CIT [2016] 157 ITD 869/67 taxmann.com 109. Relevant part of observations of the Bench is reproduced below:- .......As regard the contention of the assessee that no order under section 127 was passed by the Commissioner of Incometax, the revenue has submitted that the Addl. Commissioner of Income Tax was provided concurrent jurisdiction over the cases through 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh 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 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 an officer can be~ exercised by a superior officer. When the statute mandates the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Where a statute requires something to be done in a particular manner, it has to be done in that manner only............ 3.40. Thus, in view of the legal discussion made above and facts of the case, it is clear that impugned assessment order has been passed without authority of law hi as much as Revenue has not been able to demonstrate that the Additional Commissioner of Income ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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