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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 ..... e impugned order has been assailed on the following grounds of appeal: "1. 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 14, 01, 06, 197/- to total income as per the provision of clause (ii) & (iii) of Rule 8D of IT Rules and made addition u/s 14A of the Act and also adding the same to book profit for calculating MAT u/s 115JB of Income Tax Act, 1961 and the same is confirmed by Ld. CIT(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, 81, 68, 52, 360/- to total income notionally on account of lower rate of power tariff on sales to 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 2, 24, 58, 798/- incurred under Rehab Compensation Scheme and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first time, an additional ground of appeal before the Tribunal which involves purely a question of law and requires no further verification of facts, then, the same merits admission finds support from the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC). 3. Succinctly stated, the assessee company which is engaged in the business of generation and sale of power had filed its original return of income for A.Y. 201011 on 10.10.2012 disclosing a "book profit" of Rs. 2, 809.68 crores. The return of income filed by the assessee company was initially processed u/s. 143(1) of the Act. Subsequently, the case of the assessee company was selected for scrutiny assessment u/s. 143(2) of the Act. 4. Original assessment was framed by the A.O vide his order passed u/s. 143(3) dated 01.03.2013, wherein the income of the assessee company under normal provisions was determined at Rs. 123, 42, 91, 452/- after, inter alia, making following additions/disallowances: Sr. No. Particulars Amount 1. Disallowance u/s. 14A of the Act Rs. 14, 01, 06, 197/- 2. Addition on account of lower rate of power tariff for the holding c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner 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 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, references in any other provisions of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or 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. 10. The Ld. AR submitted that as the Jt. CIT can assume jurisdiction and exercise powers and functions conferred on or as the case may be assigned to an Assessing Officer based on an order passed by a specified authority u/s. 120(4)(b) of the Act, which in turn is based on a general or special order by the CBD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rongly stated in his letter that an order u/s. 120(4)(b) of the Act was passed by the Commissioner of Income Tax pursuant to the Notification issued by the CBDT vesting concurrent jurisdiction with the Jt. CIT, Range-1, Bilaspur over the case of the assessee. Also, the Ld. AR assailed the validity of the jurisdiction assumed by the Jt. CIT, Range-1, Bilaspur in absence of any order u/s. 127 of the Act. 14. As the existence of the order u/s. 120(4)(b) of the Act passed by the Commissioner of Income Tax vesting jurisdiction with the Jt. CIT, Range-1, Bilaspur over the case of the assessee company was called in question, therefore, Shri Rahul Mishra, Dy. CIT, Bilaspur, i.e. A.O who had appeared before us was directed to place on record a copy of the aforesaid order a/w. copy of the notification issued by the CBDT vesting concurrent jurisdiction with the Jt. CIT, Range-1, Bilaspur for framing the assessment in the case of the assessee company. 15. Although, the Dy. CIT, Bilaspur in compliance to the aforesaid direction of the Bench had placed on record a letter dated 08.01.2024 bearing Reference No. DCIT/Cir-1(1)/BSP/ITAT/120(4)/2023-24/510, but inadvertently on account of mistake on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Commissioner of Income Tax, Bilaspur in exercise of powers conferred upon him by the CBDT u/s. 120 of the Act, had authorized the Additional Commissioners of Income Tax/Jt. Commissioners of Income Tax to issue orders in writing for the exercise of the powers and performance of the functions by the A.Os who were sub-ordinate to them. Accordingly, it was pursuant to the aforesaid authorization the Addl. Commissioners/Jt. Commissioners had carried out restructuring of the jurisdiction of the authorities sub-ordinate to them, i.e. DCIT/ACIT/ITO in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases. Accordingly, the Notification No. 03/2006 dated 13.010.2006 issued by the Commissioner of Income Tax, Bilaspur in exercise of powers conferred by the CBDT u/s. 120 of the Act is not an order u/s. 120(4)(b) of the Act conferring jurisdiction with the Jt. CIT, Range-1, Bilaspur to exercise or perform the powers and functions as that of the A.O in the case of the present assessee company before us. For the sake of clarity, the Notification No. 03/2006, dated 13.10.2006 (supra) is culled out as under: Admittedly, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act;" (emphasis supplied by us) On a careful perusal of the aforesaid definition of the term "Assessing Officer" we find that the same, inter alia, takes within its sweep an Additional Commissioner or Additional Director or Joint Commissioner or Joint Director who is directed under Clause (b) of Sub-section (4) of Section 120 of the Act to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under the Income Tax Act, 1961. 22. As observed by us hereinabove though the Jt. Commissioner of Income Tax, inter alia, can exercise or perform all or any of the powers and functions conferred on, or assigned to the A.O under this Act, but as provided in sub-section (7A) of Section 2 of the Act, the same is subjected to a fundamental pre-condition that he is so directed under clause (b) of sub-section (4) of Section 120 of the Act to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under the Income Tax Act, 1961. Accordingly, the Jt. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Commissioner for exercising powers and functions of an Assessing Officer for a particular assessee or classes of assessee. Even otherwise, no order could be shown to us, whereby any such authority was given to the Joint Commissioner of the Range. Under these circumstances, we find that the Revenue is not able to show any order or notification in favour of the Additional Commissioner authorizing him for performing the powers and functions of the Assessing Officer of the assessee. 3.27. During the course of hearing, Ld. CIT-DR had drawn our attention upon Board's Notification No. 267/2001 dated 1.7-9-2001, Notification No. 228/2001 dated 31.7.2001 and Notification No, 335/2001 dated 29-102001 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 under the law to act as assessing officer of the assessee and pass the impugned assessment order. 3.28. We have gone through all these Notifications, but do not find any substance in the contention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 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 duly 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 him. 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 (2001) 252 ITR 123/[2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Officers was available, the assessment so framed being without jurisdiction was void-ab-initio. Also, a similar view had been taken by the ITAT, Delhi in the case of Harvinder Singh Jaggi Vs. ACIT (2016) 157 ITD 869. We may herein observe that the ITAT, 'K' Bench, Mumbai in the case of The Indian Hotels Company Ltd. Vs. Addl. CIT/Dy.CIT (OSD), Range-2(2), ITA No. 8570/Mum/2011, ITA No. 565/Mum/2013, ITA No. 2049/Mum/2014 and ITA No. 1910/Mum/2014, dated 21.05.2021, had observed, that as the Addl. CIT, Range-2(2), Mumbai had failed to establish that he possessed the legal and valid powers of performing the functions of an A.O conferred on him u/s. 120(4)(b) of the Act, therefore, assessment so framed by him being devoid and bereft of any force of law was liable to be quashed. Once again, the aforesaid view had been reiterated by the ITAT, "J" Bench, Mumbai in the case of Addl. CIT, Range-1(3) Vs. M/s. Tata Communications Limited (Formerly known as Videsh Sanchar Nigam Limited), ITA No. 4452/Mum/2011, ITA No. 3460/Mum/2011 and ITA No. 8768/Mum/2010 dated 24.12.2019. 26. Further, we find that ITAT, "B" Bench, Kolkata had an occasion to deal with the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isar Range, do not have jurisdiction over the case of assessee and since he did not assume the jurisdiction legally and validly, therefore, the Impugned assessment order framed by him is vitiated and illegal and without jurisdiction. In view of the above discussion, we set aside the order of the authorities below and quash the impugned order." 27. We shall now deal with the contention of the Ld. DR that as the assessee company had not called in question the jurisdiction of the Jt. CIT, Range-1, Bilaspur within the specified time period contemplated under sub section (3) of Section 124 of the Act, i.e. within a period of one month from the date on which it was served with the notice u/s. 143(2) of the Act, therefore, it was divested of its right from assailing the same for the first time before the Tribunal. 28. Before proceeding any further, it would be relevant to cull out Section 124(3) of the Act which reads as under: "124 (1) xxxxxxxx (2) xxxxxxx (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer- (a) where he has made a return under sub-section (1) of section 115WD or under subsection (1) of section 139, after the expiry of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt of Bombay in the case of Peter Vaz Vs. CIT, Tax Appeal Nos. 19 to 30 of 2017, dated 05.04.2021 and that of the Hon'ble High Court of Gujarat in the case of CIT Vs. Ramesh D Patel (2014) 362 ITR492 (Guj.). In the aforesaid cases the Hon'ble High Courts have held that as Section 124 of the Act pertains to territorial jurisdiction vested with an AO under sub-section (1) or subsection (2) of Section 120, therefore, the provisions of sub-section (3) of Section 124 which places an embargo on an assessee to raise an objection as regards the validity of the jurisdiction of an A.O would get triggered only in a case where the dispute of the assessee is with respect to the territorial jurisdiction and would have no relevance in so far his inherent jurisdiction for framing the assessment is concerned. Also, support is drawn from a recent judgment of the Hon'ble High Court of Calcutta in the case of Principal Commissioner of Income-tax Vs. Nopany & Sons (2022) 136 taxmann.com 414 (Cal). In the case before the Hon'ble High Court the case of the assessee was transferred from ITO, Ward-3 to ITO, Ward-4 and the impugned order was passed by the ITO, Ward-4 without issuing notice u/s 143(2), i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly lacks jurisdiction. Therefore, the principle of waiver cannot be invoked so as to confer jurisdiction on an Officer who is acting under the Act when he does not have jurisdiction. The Hon'ble High Court while concluding as hereinabove had relied on the judgment of the Hon'ble Supreme Court in the case of Kanwar Singh Saini Vs. High Court of Delhi, 2012 (4) SCC 307. The Hon'ble Apex Court in its aforesaid judgment had held that it is 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. The Hon'ble Apex Court further observed that 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. Also, the Hon'ble Apex Court clarified that an issue can be raised at any belated stage of the proceedings including in appeal or execution. Elaborating further, it was observed by the Hon'ble Apex Court that the finding of a court or tribunal becomes irrelevant and unenforceable/inexecutable once the forum is found to have no jurisdiction. It was further observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 143(3) of the Act dated 01.03.2013, therefore, the assessee company remained well within its right to challenge the absence of his inherent jurisdiction to frame the impugned assessment in the course of the proceedings before us. 32. We, thus, in terms of our aforesaid observations, quash the order passed by the Jt. CIT, Range-1, Bilaspur u/s. 143(3) of the Act dated 01.03.2013 for want of valid assumption of jurisdiction on his part. 33. 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. 34. In the result, appeal filed by the assessee company in ITA No. 201/RPR/2017 for A.Y. 2010-11 is allowed in terms of our aforesaid observations. ITA No. 202/RPR/2017 A.Y.2011-12 35. In the captioned appeal, the assessee company has assailed the impugned order of the CIT(Appeals) on the following grounds of appeal: "1. 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 7, 53, 54, 684/- to total income as per the provision of clause (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lfare fund and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 9. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law in making disallowance of service charges amounting to Rs. 2, 11, 495/- u/s. 40(a)(ia) of the Act and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 10. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law in making disallowance of flying charges amounting to Rs. 30, 10, 101/- and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 11. 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 5, 02, 11, 500/- towards reversal of sale bill as a prior period expenses and confirmed by Ld. CIT(A), the same is against the facts & also against the law, hence may kindly be deleted. 12. That the Ld. A.O has grossly erred on facts and in the circumstances of the case and in law by treating investment income, under the head STCG amounting to Rs. 5, 55, 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act of Rs. 2, 503, 21, 25, 897/- after inter alia, making the following additions/ disallowances: 38. Aggrieved the assessee company carried the matter in appeal before the CIT(Appeals) who upheld the additions/disallowances made by the A.O. 39. The assessee company being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 40. Shri Salil Kapoor, the Ld. AR for the assessee company submitted that alike the earlier appeal, i.e. ITA No. 201/RPR/2017 for A.Y. 2010-11, the Jt. CIT, Range1, Bilaspur in the present case had also wrongly assumed jurisdiction and without any order u/s. 120(4)(b) of the Act, framed assessment vide his impugned order u/s. 143(3) of the Act dated 29.01.2014. 41. The Ld. DR relied on his contentions that were advanced by him in ITA No. 201/RPR/2017 for A.Y. 2010-11. 42. 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. 43. Admittedly, it is a matter of fact borne from record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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