| The Tax Publishers2020 TaxPub(DT) 0430 (Mum-Trib) INCOME TAX ACT, 1961
Section 120 Section 124(b) & 127 Section 263
In the facts of the present case, Addl. CIT in the absence of a valid order under section 120(4)(b) as well as section 127(1) could not have exercised powers of AO to pass the impugned assessment order accordingly, the impugned assessment order passed being wholly without jurisdiction was void ab initio, hence, deserves to be annulled and quashed.
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Revision under section 263 - Jurisdiction of Addl. CIT to pass assessment order - No order under section 120(4)(b) -
Assessee raised additional ground being legal ground to the effect that Addl. CIT was not empowered to pass assessment order under section 143(3) due to lack of order under section 120(4)(b) read with section 127. DR vehemently argued opposing the admission of additional grounds and submit that prior to the Tribunal, at no stage, the assessee had raised the issue relating to the Addl. CIT's jurisdiction or lack of it, as per notifications issued under section 120. Accordingly, he argued that the additional ground should not be admitted. The Tribunal held that additional grounds of the assessee were admitted for adjudication as it challenges the preliminary issue of legality and validity of framing of assessment by the Addl. CIT. Held: The Addl. CIT was not included as an AO either under section 2(7A) or under section 120(4)(b) earlier. Only by virtue of Finance Act, 2007, the aforesaid provisions were amended by including Addl. CIT as an AO. As far as Addl. CIT, Addl. DIT, JCIT, JDIT are concerned, they can exercise powers and functions of an AO, only, if they are directed to do so under clause (b) of sub-section (4) of section 120. Exercise of jurisdiction by the Addl. CIT had to be examined on the basis of notification/orders passed under section 120(4)(b), under section 127(1). In the facts of the present case, the Addl. CIT in the absence of a valid order under section 120(4)(b) as well as section 127(1) could not have exercised powers of on AO to pass the impugned assessment order. Accordingly, the impugned assessment order passed being wholly without jurisdiction was void ab initio, hence, deserves to be annulled and quashed. When the issues are to be decided on the basis of facts already available on record and keeping in view the relevant notifications placed on record as well as the decisions cited, there is no necessity of restoring the matter back to the file the CIT(A). The additional grounds raised by the assessee challenging the validity of assessment framed by the Addl. CIT was allowed and accordingly, the assessment so framed was quashed.
Followed: Tata Communications Ltd. v. Addl. CIT [ITA Nos. 4221/Mum/2005, 4219/Mum/2005, 1107/Mum/2008, 1835/Mum/2008, dt. 8-7-2015]
REFERRED : Jute Corporation of India Ltd. v. CIT (1991) 187 ITR 688 (SC) : 1991 TaxPub(DT) 505 (SC), CIT v. NTPC Ltd. (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 342 (SC) and CIT v. Pruthvi Brokers and Shareholders (2012) 349 ITR 336 (Bom) : 2012 TaxPub(DT) 2671 (Bom-HC).
FAVOUR : In assessee's favour.
A.Y. : 2005-06 & 2006-07
IN THE ITAT, MUMBAI BENCH
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