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Income Tax Appellate Tribunal, DELHI BENCH “F” DELHI
Before: SHRI KUL BHARAT & SHRI PRADIP KUMAR KEDIA
The captioned appeal has been filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-I, Noida (‘CIT(A)’ in short) dated 31.12.2018 arising from the assessment order dated 16.11.2016 passed by the Assessing Officer under Section 144/147 of the Income Tax Act, 1961 (the Act) concerning AY 2009-10.
2. The grounds of appeal raised by the Revenue read as under:
“1. Because Sh. S.K. Srivastava, the then CIT(A)-1, Noida had been compulsorily retired by the Government of India with effect from 11.06.2019 and accordingly, he had become functus officio w.e.f. 11.06.2019. Accordingly, any discharge of function by an officer who has become functus officio is a nullity in law and without jurisdiction.
In this regard, reliance is placed on the decision of the Hon'ble High Court of Karnataka in the case of Rudragouda v. The University of Agricultural Sciences and Ors., Writ Petition No. 31734/2016 (S-RES), wherein it was held that: - "The petitioner/officer after his retirement becomes functus officio. No officer can continue to discharge his functions subsequent to his retirement and more particularly, to take action against the subordinate officer or to seek such direction from this Court." (emphasis added)
It is to be noted that the term functus officio has been defined to mean the following: - Black's Law Dictionary Sixth Edition Page 6731 gives its meaning as follows: Having fulfilled the function, discharged the office, or accomplished the purpose, and therefore, of no further force or authority.
Accordingly, it is submitted that once the then CIT(A)-Noida has been compulsorily retired i.e., with effect from 11.06.2019, any order prima facie passed by him or acted upon by him after the date of his compulsory retirement is without jurisdiction.
3. Because a vigilance inspection for the work carried out by Sh. Sanjay Kumar Srivastava IRS (Retd.),who was posted to as CIT(A)-1 Noida with the additional charge of CIT(A)-2 Noida, prior to his compulsory retirement w.e.f 11.06.2019 was conducted on 19.06.2019 by the Vigilance Team of Income Tax (Vigilance), which revealed that orders purported to have been passed by Sh. Srivastava in the month of December, 2018 were prima-facie passed in the month of June, 2019. In majority of these orders liable to have been uploaded on the ITBA system were uploaded between 11th June to 13th June, 2019, i.e. after his demitting the office, as per the charge sheet filed by the CBI. As per the CBI's charge sheet there are also indications of falsification of records to allude towards dispatch of these orders on 7th June, 2019, whereas they were dispatched on 14th June, 2019 It was further revealed that 104 orders were claimed to be passed by Sh. S.K. Srivastava during December, 2018,however, many of them were uploaded to the central server using his RSA token only after his retirement.
4. Because Ld. CIT(A)-1, Noida has committed a jurisdictional error by deciding the appeal beyond fifteen days of the last hearing in contravention of Instruction no. 20/2003 dated 23.12.2003 issued by the CBDT and the order was uploaded on the ITBA after an inordinate delay of time, as it was uploaded after he was compulsorily retired under provisions of Fundamental Rules (FR) 56(J).
Because 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), Noida.
Because, it is immaterial whether an order passed without jurisdiction is in favour of Revenue or against it. Such an order is contrary to the administration of the Income Tax Act and it pollutes the streams of justice. Therefore, Revenue would be an aggrieved party if a Commissioner of Income Tax (Appeals) passes an order without jurisdiction and it is in the interest of the revenue as well as tax administration to ensure that orders are passed by the correct legal authority under the Act.
Because the Revenue being 'State' cannot be a beneficiary of an order passed without jurisdiction by an Appellate Commissioner and therefore it is absolutely immaterial that ultimately the case was decided in favour of the revenue by the Appellate Commissioner albeit without jurisdiction.
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.
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"
The Revenue 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.”
It is a peculiar case where the Revenue has sought to impugn the order of the CIT(A) which has been adjudicated against the assessee and in favour of the Revenue.
The peculiar facts in the instant case as brought out on record on behalf of the Revenue are reproduced hereunder:
Statement of Facts “In this case, as per AIR information, the assessee had sold immovable property amounting to Rs. 31,10,800/- the F.Y. 2008- 09 relevant to A.Y. 20009-10. In absence of any compliance on the part of the assessee, the assessment was completed u/s 144 r.w.s.
147'of the I.T. Act on 16.11.2016, after making an addition of Rs. 10,18,118/- on account of long term capital gain. Aggrieved with this assessment order, the assessee filed an appeal before the Ld. CIT (Appeal) -I, Noida. The Ld. CIT (Appeal)-I, Noida, vide order dated 31.12.2018 in appeal No. 38/2017-18/Noida has dismissed the appeal filed by the assessee. In this case, there is jurisdictional defect in as much as the order was passed by the CIT(A)-I, Noida after he was retired. The orders were received in the office of Pr. Commissioner of Income Tax, Noida on 17th June 2019 which is after the date when the then Commissioner of Income Tax (Appeals), was retired by the Government. Therefore, in view of the above facts of the case, 2nd appeal is recommended before the Hon’ble ITAT in this case.”
4. From the factual submission made on behalf of the assessee, it is noticed that the Revenue seeks to allege that the first appellate order has been passed by the CIT(A) although against the assessee is without jurisdiction. It is contended that the Income Tax Department being ‘State’ cannot be beneficiary of an order passed without jurisdiction and it is absolutely immaterial that ultimately the case has been decided adverse to the assessee. It was pointed out on behalf of the Revenue that the action of the CIT(A) in the circumstances as narrated cannot be endorsed regardless of whether it operates in favour of the Revenue or against it.
6. We find force in such plea without any reservation. The order passed without jurisdiction is a nullity and thus amenable to appellate jurisdiction of Tribunal to seek remedy on such fundamental defects. This apart, we notice that the date of order of the CIT(A) is of 31.12.2018 whereas the first appellate order was communicated to the Revenue after a gap of more than five months on 11.06.2019. Ostensibly, the impugned order has not been communicated promptly, i.e., 15 days as per guidelines issued in this regard by CBDT. The CIT(A) is expected to follow the guiding principles in letter and spirit as provided in CBDT Instructions No.20/2003 dated 23.12.2003 which was reiterated vide CBDT letter F. No. 279/Misc.53/2003 ITJ dated 19.6.2015. Another communication F. No. DGIT (vig) / HQ / SF / Appeals /2017-18/9959 dated 8.3.2018 was yet again issued by CBDT to give impetus for timely dispatch of orders passed by CIT(A) to shun any suspicion about back dating and mala fide intent.
7. The Co-ordinate Bench of the Tribunal in ITO vs. Uma Devi in ITAs No.1479, 1480, 1481/Del/2020 order dated 12.08.2022 has also set aside the order of CIT(A) for fresh adjudication in somewhat similar circumstances. 8. We thus find traction in the claim of the Revenue for remitting the matter back to the CIT(A) for fresh adjudication on the ground that the impugned order has been passed by the extant CIT(A) without jurisdiction. Hence, the matter is remitted to the file of the concerned CIT(A) holding lawful jurisdiction to adjudicate the matter afresh in accordance with law and in tune with principles of natural justice. 7. In the result, the appeal of the Revenue is allowed ex-parte. Order pronounced in the open Court on 18/10/2022.