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Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMEBR ITA No. 1193/Del/2020 (Assessment Year : 2010-11 ITO Vs. Shobha Agnihotri Ward – 3(4) D-4, Sec-27, Noida – 201 301 Noida-201 301 PAN No. AEWPA 0847 H (APPELLANT) (RESPONDENT) Assessee by -None- Revenue by Shri Pradeep Singh Gautam, Sr. D.R. Date of hearing: 02.02.2023 Date of Pronouncement: 14.03.2023 ORDER PER ANIL CHATURVEDI, AM: This appeal filed by the Revenue is directed against the order dated 28.12.2018 of the Commissioner of Income Tax (Appeals)-I, Noida relating to Assessment Year 2010-11.
The relevant facts as culled from the material on records are as under:
Assessee is an individual and stated to be engaged in part time business of Stitching/tailoring and weaving work. AO has noted that as per AIR information, assessee had made cash
2 deposit of Rs.12,80,000/- in saving bank account for A.Y. 2010- 11. Accordingly, notices u/s 148 were issued and served on the assessee. In response to notice u/s 148 of the Act, return of income was filed by the assessee on 28.09.2017. Thereafter, the assessee was requested to explain the source of cash deposits of Rs.12,80,000/- along with documentary evidence but no compliance was made. Thereafter, assessment was made u/s 143(3)/147 of the Act vide order dated 24.11.2017 and the total income was determined at Rs.11,58,790/-.
Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 28.12.2018 in Appeal No.706/E-File/2017-18/Noida allowed the appeal of the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal before the Tribunal and has raised the following grounds:
“That on facts and in circumstances of the appellant's case, the learned AO erred both in fact and in law in making addition of cash deposit of Rs 9,87,000/- as income u/s 68 of the Income tax Act by framing assessment under section 143(3) of the Income tax Act, 1961 instead of section 144 in case of non compliance of Notice issued under section 142(1) of the Act as required by section 144 of the Act. Hence, assessment framed u/s 143(3) of the IT Act, 1961 making addition of Rs 9,87,000/- is bad in law and liable to be quashed. 2. That on facts and in circumstances of the appellant's case, the learned assessing officer erred both in fact and in law in making addition of cash deposit of Rs 9,87,000/- as income under section 68 of the Income tax Act, 1961 merely on the basis of conjectures and surmises without placing any corroborative evidence on record that the said cash deposited is out of undisclosed sources. Hence, addition of cash deposit of Rs 9,87,000/-as undisclosed income under section 68 of the Act
3 only on the basis of conjectures and surmises is bad in law and liable to be deleted. 3. That the appellant craves leave to add, to alter or to amend grounds of appeal before the appeal is heard and disposed off.”
On the date of hearing none appeared on behalf of the assessee nor any adjournment application was filed despite the fact that the notice of hearing was issued to the assessee. Since the issue raised in appeal is a covered issue, we proceed to dispose of the appeal ex parte qua the assessee, after considering the submissions of Learned DR and the material on record.
Learned DR submitted that the order of CIT(A), Noida passed is null and void, as the same was passed by CIT(A) after he was retired, by Govt. of India, under 56(j) of FR, on 10.06.2019. He submitted that the order being devoid of legal force, hence, not binding on the AO, because the same was passed after the date when the CIT(A) was retired by the government. He, therefore, submitted that the impugned order be set aside and appeal be restored to the file of CIT(A) having jurisdiction.
We have heard the Learned DR and perused the material available on record. We find that identical issue arose in the case of ITO vs. Late Smt. Sarvesh Saxena (ITA No.8187/Del/2019 A.Y. 2010-11) wherein the Tribunal vide order dated 05.12.2022 restored the matter back to CIT(A) by observing as under: “This appeal, by the Department, is directed against the order of the learned Commissioner of Income-tax (Appeals)-1, Noida, dated
28.09.2018, pertaining to the assessment year 2010-11. The assessee has raised following grounds of appeal: “1. The order of the CIT (A), Noida -1 is violative of CBDT's notification No. 66/2014 dated 13.11.2014 r.w. order No. G- 3/2014-15 dated 15.11.2014 of Ld. Pr. CCIT (CCA), Kanpur, assigning jurisdiction to CIT(A), Ghaziabad and other CsIT(A) of UP (West & Uttrakhand) Because as per the jurisdiction orders, the appeal of the assessee should have been filed before and decided by the CIT(A), Ghaziabad whereas it was filed before and decided by CIT(A), Noida-1. Although the tax effect is below the monetary limit laid down by the CBDT for filling of second appeals, the instant case is covered by the exception clause 10(b) of circular No. 3/2018 dated 11th July 2018, issued by the CBDT. Hence the order the CIT (Appeals) -1, Noida is liable to be quashed/cancelled. The relevant orders of the CBDT as well as Pr. CCIT (CCA), Kanpur assigning jurisdiction to CIT(A), Ghaziabad and CsIT(A) of U.P. West & Uttarakhand are enclosed for ready reference. 2. Without prejudice to ground No. 1 above, the Ld. GT (A)-l, Noida has erred in law and on facts in deleting the addition of Rs. 19,87,200/- made by the Assessing Officer on account of long term capital gain on sale of immovable property after considering additional evidences filed before him during the course of appellate proceedings and without confronting these additional evidences to the Assessing Officer, which is violative not only of Rule 46A of the I.T. Rules but also of the principles of natural justice. 3. Without prejudice to ground no -1 above, the Ld. CIT(A)-1, Noida erred in holding in para -5 of his order that "The impugned assessment order is therefore deleted" It is to be noted that an addition to income made in assessment order can be deleted and not the assessment order itself. 4. Appellant craves leave to modify/amend or add any one or more ground of appeal.” 2. Apart from the grounds taken in form no. 36 originally filed, the Revenue has also taken following additional grounds: “1. Because the impugned order suffers from a jurisdictional defect since CIT(A)-1, Noida could not have decided the appeal of the assessee without having jurisdiction over the case when the assessee in this case filed the appeal with the CIT(A)-1, Noida whereas the same
should have been filed with and decided by the jurisdictional CIT(A), Ghaziabad. 2. Because the jurisdiction to hear this appeal vested only with Commissioner of Income Tax (Appeals), Ghaziabad and that Sh. Sanjay Kumar Srivastava was not holding the charge of Commissioner of Income Tax (Appeals), Ghaziabad in September, 2018 (when the appeal order is shown to have been passed) nor was this case ever assigned to him by the competent authority i.e. Principal Chief Commissioner of Income Tax, Kanpur. 3. Because the order of CIT(A)-1, Noida is illegal, bad in law and totally non-est being passed without jurisdiction in violation of CBDT’s notification no. 66/2014dated 13.11.2014 r.w order no G-03/2014-15 dated 15.11.2014 of Ld. Pr.CCIT(CCA), Kanpur(copies enclosed), assigning jurisdiction of CIT(A), Ghaziabad and other CIT(A)s of UP (West & Uttarakhand). 4. Because it is trite law that want of jurisdiction goes to the root of a matter, and an order passed without jurisdiction is non-est in the eyes of law. Therefore, it follows that if an authority lacks jurisdiction, the whole proceeding initiated before it suffers from the vice of coram non-judice and is non- est in the eyes of law. 5. Because it is well settled that the competence of a court to try a case goes to the very root of the jurisdiction, and where it is lacking, it is a case of inherent lack of jurisdiction. Reliance in this regard is placed on the decision of the Hon’ble Supreme Court in the case of Fatma Bibi Ahmed Patel v. State of Gujarat & Anr., (2008) 6 SCC 789, wherein the Hon’ble Supreme Court observed that: - “21. This Court, in a matter like the present one where the jurisdictional issue goes to the root of the matter, would not allow injustice to be done to a party. The entire proceedings having been initiated illegally and without jurisdiction, all actions taken by the court were without jurisdiction, and thus are nullities. In such a case even the principle of res judicata (wherever applicable) would not apply. ” (emphasis added)
Because, it is a fundamental principle that has been well established that a decree passed by a court without jurisdiction is a nullity and that its invalidity could be set up wherever and whenever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. Reliance in this regard is placed on the decision of the Hon’ble Supreme Court in the case of Kanwar Singh Saini v. High Court of Delhi, (2012) 4 SCC 307, wherein it was held that: - “22. There can be no dispute regarding the settled lesal 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 soes to the roots of the cause. Such an issue can be raised at any belated stase of the proceedings includins in appeal or execution. The findins 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 lesislative animation. The court cannot derive jurisdiction apart from the statute...” (emphasis added) 7. Because a defect of jurisdiction strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties. Reliance in this regard is placed on the decision of the sevenjudge bench of the Hon’ble j Supreme Court in the case of United Commercial Bank Ltd. v. Workmen, 1951 SCR 380, wherein it was held by the majority that: - “15. The final contention that the sittings in the interval constituted only an irregularity in the proceedings cannot again be accepted because, in the first place, an objection was raised about the sitting of the two members as the Tribunal. That objection, whether it was raised by the appellants or the other party, is immaterial. The objection having been overruled, no question of acquiescence or estoppel arises. Nor can consent give a court jurisdiction if a condition which goes to the root of the jurisdiction has not been
performed or fulfilled. No acquiescence or consent can give a jurisdiction to a court of limited jurisdiction which it does not possess. In our opinion, the position here clearly is that the responsibility to work and decide being the joint responsibility of all the three members, if proceedings are conducted and discussions on several general issues took place in the presence of only two, followed by an award made by three, the question goes to the root of the jurisdiction of the Tribunal and is not a matter of irregularity in the conduct of those proceedings. The absence of a condition necessary to found the jurisdiction to make the award or give a decision deprives the award or decision of any conclusive effect. The distinction clearly is between the jurisdiction to decide matters and the ambit of the matters to be heard by a Tribunal having jurisdiction to deal with the same. In the second case, the question of acquiescence or irregularity may be considered and overlooked. When however the question is of the jurisdiction of the Tribunal to make the award under the circumstances summarized above, no question of acquiescence or consent can affect the decision.” (emphasis added) 8. Because where a court or quasi-judicial authority lacks inherent jurisdiction in passing a decree or making an order, a decree or order passed by such court or quasi-judicial authority would be without jurisdiction, non-est and void ab initio. 9. Because want of jurisdiction must be distinguished from irregular or erroneous exercise of jurisdiction. If there is want of jurisdiction the whole proceeding is coram non judice. The absence of a condition necessary to found the jurisdiction to make an order or give a decision deprives the order or decision of any conclusive effect. 10. Because section 2(16A) of the Income Tax Act, 1961 defines a Commissioner of Appeals as follows: “(16A) "Commissioner (Appeals)" means a person appointed to be a Commissioner of Income-tax (Appeals) under sub-section (1) of section 117”
Furthermore, section 117 of the Income Tax, Act, 1961 provides as follows: “(1) The Central Government may appoint such persons as it thinks fit to be income-tax authorities. (2) Without prejudice to the provisions of sub-section (1), and subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, the Central Government may authorise the Board, or a Principal Director General or Director- General, a Principal Chief Commissioner or Chief Commissioner or a Principal Director or Director or a Principal Commissioner or Commissioner to appoint income-tax authorities below the rank of an Assistant Commissioner or Deputy Commissioner. (3) Subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, an income- tax authority authorised in this behalf by the Board may appoint such executive or ministerial staff as may be necessary to assist it in the execution of its functions.” 12. Because a Commissioner of Income Tax (Appeals) is a creature of statute, having its jurisdiction circumscribed by the statute itself. Therefore, it follows as a corollary that if they exceed their jurisdiction beyond what is permitted under the Act then such actions are a nullity. 13. Because section 120 of the Income tax Act, 1961 empowers the Central Board of Direct Taxes (CBDT) to issue direction to the Income Tax Authorities, delineating their scope of work including territorial jurisdiction. 14. Because in exercise of its powers under section 120(1) and (2) of the Income Tax Act, 1961, the CBDT vide a Notification dated 13.11.2014, authorized the Principal Chief Commissioners of Income Tax, to issue orders for the exercise of power and performance of functions to subordinate income-tax authorities, as set out in column No. 4. The relevant portion of the notification dated 13.11.2014 is extracted hereunder:
2. 3. 4. 17. Principal Chief Kanpur Commissioner of Income-tax Commissioner of income (Appeals), Kanpur-1 to 4 Tax, Uttar Pradesh (West) Commissioner of Income-tax and Uttarakhand (Appeals), Agra-1and 2 Commissioner of Income-tax (Appeals), Ghaziabad Commissioner of Income-tax (Appeals), Noida-1 and 2 Commissioner of Income-tax (Appeals), Meerut Commissioner of Income-tax (Appeals), Aligarh Commissioner of Income-tax (Appeals), Muzaffarnagar Commissioner of Income-tax (Appeals), Dehradun
Because in exercise of the powers conferred by the CBDT notification dated the Pr. CCIT- Uttar Pradesh (West) and Uttarakhand, Kanpur, vide a notification order F. No. PR.CCIT/KNP/5(6)/DCIT(T&J)2014-15/3692 dated 15.11.2014, delineated the jurisdictional charges of the Commissioners of Income Tax (Appeals) as follows:
Sl Designation of Headquarters Designation of Income tax Cases or No. the Income Tax Authority class of Appellate cases of Authority persons (1) (2) (3) (4) (5) 7. Commissioner Ghaziabad Principal All cases of Income-tax Commissioner/Commissioner of excluding (Appeals), Income-tax, Ghaziabad special Ghaziabad range cases Commissioner of Income-tax All cases (TDS), Ghaziabad falling within the Commissioner of Income-tax territorial (Exemption), Lucknow jurisdiction of Pr. CIT/CIT Ghaziabad 8. Commissioner Noida Principal All cases of Income-tax Commissioner/Commissioner of (Appeals), Income-tax, Noida Noida-1 Commissioner of Income-tax All cases (TDS), Kanpur falling within the Commissioner of Income-tax (Exemption), Lucknow territorial
jurisdiction of Pr. CIT/CIT Noida Commissioner Noida Commissioner of Income-tax of Income-tax (International Taxation)-3, Delhi (Appeals), Noida-2 16. Because, the Ld. CIT(A)-1, Noida has erred in law by deciding the appeal of the assessee, without having jurisdiction over the case, as the assessee filed the appeal with CIT(A)-1, Noida, whereas the same should have been filed before the jurisdictional CIT(A), Ghaziabad. Thus, the order of the CIT(A)-1, Noida is illegal, bad in law and in violation of CBDT’s notification No. 66/2014 dated 13.11.2014 read with order F. No. PR.CCIT/KNP/5(6)/DCIT(T&J)2014-15/3692 dated 15.11.2014 of the Ld. Pr. CCIT Uttar Pradesh (West) and Uttarakhand, Kanpur, assigning jurisdiction to the CIT(A), Ghaziabad and other CIT(A)s. 17. Because jurisdiction can neither be waived nor conferred by acquiescence or consent. Therefore, even if the appeal was preferred before the CIT(A)-1, Noida when the charge of the case actually belonged to the CIT(A), Ghaziabad, no acquiescence or consent between the assessee and the CIT(A)-1, Noida could validly confer jurisdiction on the CIT(A)-1, Noida, to conduct the appellate proceedings. In this regard reliance is placed on the decision of the Hon’ble Supreme Court in the case of Bahadur Singh Jain v. Munisubrat Dass Jain, (1969) 2 SCR 432, wherein it was held that the defect of jurisdiction strikes at the very authority of the court to pass decree which cannot be cured by consent or waiver of the party. The relevant extract of the judgment is reproduced hereunder: “5. The next question is whether the decree directing the tenant to deliver possession-of the premises to the landlord was passed in contravention of Section 13(1) of the Delhi and Ajmer Rent Control Act, 1952. That subsection provided that: "Notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any premises shall be passed by any
Court in favour of the landlord against any tenant (including a tenant whose tenancy is terminated): Provided that nothing in this sub-section shall apply to any suit or other proceeding for such recovery of possession if the Court is satisfied”. Then followed a catalogue of grounds on which the decree for recovery of possession could be passed. The other sub-sections to Section 13 showed that a decree or order could be passed on one of those grounds in suit or proceeding instituted by a landlord against a tenant Section 13(1) prohibited the Court from passing a decree or order for recovery of possession of any premises in favour of a landlord against a tenant except in such a suit or proceeding and unless the Court was satisfied that a ground of eviction existed. Now the decree in the present case is on the face of it one for recovery ofpossession of the premises in favour of a landlord against a tenant. The Court passed the decree according to an award under Section 17 of the Arbitration Act, 1940 in a proceeding to which the landlord was not a party without satisfying itself that a ground of eviction existed. On the plain wordins of Section 13(1) the Court was forbidden to pass the decree. The decree is a nullity and cannot be enforced in execution. 6...As the decree for the delivery of possession of the premises to the landlord is a nullity it cannot be enforced or executed either by the landlord or by the landlord's son Muni Subrat. The decree in so far as it directs the removal of the machinery from the premises is clearly valid and separable from the rest of the decree and may be executed by Muni Subrat” (emphasis added) 18. The order of the CIT(A)-1, Noida, being a nullity in the eyes of law, may be set aside for fresh adjudication to the jurisdictional Ld. CIT(A), Ghaziabad. 19. Because any orders, instructions or directions issued under Section 268A(1) by the Board to other income tax authorities for fixing monetary limits would not apply to orders passed without jurisdiction when the officer himself
had no jurisdiction to grant relief or pass any order whatsoever. 20. Because the monetary limits fixed pursuant to Section 268A will only apply to orders passed by authorities with jurisdiction and not to authorities without jurisdiction. Section 268A(1) of the Act reads as follows: - “Section 268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income- tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter” 21. The appellant craves leave to modify any of the grounds above and/or to add any fresh ground or grounds as and when it is required to do so.” 3. Learned Sr. DR has pointed out that although the tax effect involved in this appeal is lower than the monetary limit, however, the appeal has been filed by the Revenue on the ground that the Learned CIT(Appeals0 was not having jurisdiction to entertain and adjudicate upon the appeal. It was, therefore, prayed that the impugned order may be set aside and the appeal of the assessee be restored to the file of the Learned CIT(Appeals) having jurisdiction. 4. I have heard learned Sr. DR and perused the material available on record. There is no dispute with regard to the fact that the present appeal is not maintainable on account of the fact that the tax effect involved in this appeal is below the monetary limit as prescribed by the CBDT Circular No. 17/2019 dated 8th August, 2019, revising the monetary limit for filing of the departmental appeals to the ITAT at Rs. 50 lakhs. However, looking to the fact that impugned order is passed by an authority who had no jurisdiction, therefore, to subserve the substantial interest, I hereby set aside the impugned order and restore the grounds of appeal to the learned CIT(Appeals) who has jurisdiction for passing order afresh. Needless to say that the learned CIT(Appeals) would provide adequate opportunity of hearing to the legal heirs of the assessee. 5. Revenue’s appeal stands allowed for statistical purposes.”
Since the facts of the case in the year under consideration are identical to that in the case of Smt. Sarvesh Saxena (supra). We for similar reasons restore the issue back to the file of CIT(A) who has jurisdiction to pass the order afresh. Needless to state that the CIT(A) shall grant adequate opportunity of hearing to both the sides. Thus the ground of Revenue is dismissed.
In the result, appeal of Revenue is dismissed.
Order pronounced in the open court on 14.03.2023
Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 14.03.2023 PY* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI