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Income Tax Appellate Tribunal, DELHI BENCH ‘I-1’, NEW DELHI
Before: Ms. Suchitra KambleDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order dated 08.01.2015 passed by the AO u/s 144C r.w.s. 143(3) of the Income Tax Act, 1961.
M/s Jindal Steel & Power Ltd. is a Public Limited Company and engaged in the business of manufacturing and sale of Steel, sponge iron, ferro chrome, pig iron parallel flange beams/columns, rails and power generation.
The assessee filed its return of income with the Deputy Commissioner of Income Tax, Hisar. The return was filed on 30.09.2010 declaring an income of Rs. 864,20,38,306/-. Thereafter, the assessee has filed revised return on 31/3/2011
ITA No.619/Del/2015 2 Jindal Steel & Power Ltd. revising the total income to Rs.860,8,38,331/- thus reducing total income by Rs.4,11,99,975/-.
A reference was sent from the Assessing Officer to the TPO to determine the Arms Length Price u/s 92CA (3) in respect of international transactions entered into by the assessee during the Financial Year 2009-10, i.e. Assessment Year 2010-11. The Transfer Pricing Officer (“TPO”) passed order u/s 92CA (3) of the Income Tax Act, 1961 on 2/1/2014 determining an upward adjustment of Rs. 72,10,14,453/-. In pursuance to the order of the TPO, the draft assessment order was framed by the AO on 31/3/2014. Thereafter, the assessee filed objections before Dispute Resolution Panel on 29.4.2014. After providing due opportunity to the assessee, the ld. DRP vide order dated 31/12/2014 has disposed off the objections of the assessee. Taking into cognizance, the directions of the ld. DRP, the Assessing Officer passed Assessment Order on 8/1/2015 u/s144C read with Section 143(3) of the Income Tax Act, 1961.
Facts in brief:
Date of filing of return – 30.09.2010 Date of Order of the TPO – 02.01.2014 Date of Draft Assessment Order – 03.01.2014 Date of filing Objections before DRP – 29.04.2014 Date of Order of the DRP – 31.12.2014 Date of Assessment Order – 08.01.2015
Aggrieved with the Assessment Order, the assessee filed appeal before the Tribunal challenging the said assessment
ITA No.619/Del/2015 3 Jindal Steel & Power Ltd. order initially on various issues as set out in grounds of appeal filed under Form No.36B on 20.05.2019. The assessee has filed additional grounds in respect of the jurisdictional issue relating to assessment not being done by the competent person. On 12.07.2021, the assessee has filed the fresh additional grounds relating to the issue that the assessment completed u/s 144C(13)/143(3) of the Income Tax Act, 1961 is bad in law, void ab-initio and barred by limitation.
In the applications for admission of additional grounds of appeal under Rule 11 of the Income Tax Appellate Tribunal Rules 1963, the assessee has taken up the jurisdictional grounds of transfer of assessment from Deputy Commissioner to the Joint Commissioner and the assessment being time barred owing to wrong application of provisions u/s 144C. For the sake of ready reference, the additional grounds filed by the assessee are reproduced as under:
ITA No.619/Del/2015 4 Jindal Steel & Power Ltd.
ITA No.619/Del/2015 5 Jindal Steel & Power Ltd.
ITA No.619/Del/2015 6 Jindal Steel & Power Ltd.
ITA No.619/Del/2015 7 Jindal Steel & Power Ltd. 8. Admission of the additional grounds has been opposed in principle by the ld. DR. He argued that the assessee having availed the beneficial provision of pre-adjudication of the Assessment Order by the way of ld. DRP as provided u/s 144C cannot raise the issue in the form of any additional grounds at the juncture. The ld. AR argued that the additional grounds being legal in nature can be raised at any point of time. Keeping in view, the judgment of the Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. Vs CIT (1998) 229 ITR 383, the additional ground filed by the assessee is admitted. The relevant portion of the judgment is as under: “5. Under Section 254 of the Income-tax Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier.
In the case of Jute Corporation of India Ltd. v. C.I.T. . this Court, while dealing with the powers of the Appellate Assistant Commissioner observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In
ITA No.619/Del/2015 8 Jindal Steel & Power Ltd. the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also.
The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income- tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal [vide, e.g., C.I.T, v. Anand Prasad (Delhi), C.I.T. v. KaramchandPremchand P. Ltd. and C.I.T. v. Cellulose Products of India Ltd. . Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.
The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits.”
At the time of hearing, the Ld. AR submitted that the additional grounds filed on 8th July, 2021 with regard to the
ITA No.619/Del/2015 9 Jindal Steel & Power Ltd. provisions of Section 144C may be taken up initially. The Ld. AR submitted that the provisions of Section 144C was introduced by the Finance (No. 2) Act, 2009 w.r.e.f. 01.04.2009, and, therefore, the same is not applicable for the present/impugned assessment year which is A.Y. 2010-11. The Ld. AR relied upon the recent decision of the Hon’ble Madras High Court in case of Vedanta Ltd. Vs. ACIT (2020) 422 ITR 262 wherein the Hon’ble High Court has given observation that, where there is a change in the form of assessment itself such change is not a mere deposition in procedure but a substantive shift in the manner of framing assessment. Substantive right was ensured to the parties by virtue of the introduction of Section 144C and it is settled position that the law applicable on the first day of assessment year be reckoned as applicable for that year, leads one to the inescapable conclusion that the provisions of Section 144C can be held to be applicable only prospectively, from the Assessment Year 2011-12 only. The Ld. AR also relied upon the decisions of Delhi Tribunal in case of Deputy CIT Vs. Travelport L.P USA in ITA No. 6499/Del/2012 dated 2/11/2020 as well as decision in the case of A.T Kearney Ltd. Vs. ADIT in ITA No. 4405/Del/2011 dated 25/5/2021. The Ld. AR further submitted that the Notification/Circular No. 5/2010 issued by the CBDT was also considered by the Hon’ble Madras High Court in case of Vedanta Ltd. (supra). Thus, in the present Assessment Year Section 144C is not applicable and order u/s 144C is bad in law, void ab-initio and barred by limitation and hence the assessment order should be quashed at the threshold.
ITA No.619/Del/2015 10 Jindal Steel & Power Ltd. 10. The Ld. DR submitted that Section 144C was inserted by Finance (No.2) Act, 2009, w.r.e.f. 1/4/2009 for which the caption was mentioned as ‘Reference to Dispute Resolution Panel’. The Ld. AR submitted that the assessee has availed the provisions and procedure of Section 144C by filing objections before the DRP and thus, has taken the benefit of Section 144C as per the statute. The Ld. DR also relied upon the Circular No.5/2010 dated 3/6/2010 issued by CBDT which clearly mentioned that the provisions of Dispute Resolution Panel u/s 144C are applicable from Assessment Year 2010-11. The Ld. DR, therefore, submitted that the assessment passed u/s 144C read with Section 143(3) of the Income Tax Act, 1961 is valid assessment and the additional grounds taken by the assessee are not valid and not as per the law established. The ld. DR argued that the procedure mentioned under “Reference to Dispute Resolution Panel” is sacrosanct and non negotiable. It was held that non-adherence to the mandatory requirement u/s 144C would nullify the assessment order. It was argued that the revenue authorities as well as the assessee have at the outset rightly followed the provisions of reference to ld. DRP as enunciated u/s 144C.
Heard the arguments of both the parties and perused the material available on record. The Ld. AR relied upon the decision of the Hon’ble Madras High Court in case of Vedanta Ltd. (Supra) wherein the writ petition was filed by the assessee in respect of Assessment Year 2007-08. The decision of the Hon’ble Madras High Court is dated 22nd October, 2019 which is now before us. The Moot questions in this appeal before the Tribunal is that whether Assessment Year 2010-11 come under
ITA No.619/Del/2015 11 Jindal Steel & Power Ltd. the purview of Section 144C or not and whether the assessment passed was bad in law, void-ab-initio and barred by limitation. To begin with, we will find that the provisions of Section 144C which was inserted by the Finance (No.2) Act, 2009, with retrospective effect from 1/4/2009 which is not challenged at any Court of Law. The heading of the Section 144C is ‘Reference to Dispute Resolution Panel’. Thus, Section 144C is specifically in respect of ‘Reference to Dispute Resolution Panel’ and it is a mechanism to resolve Tax Disputes between the assessee and the Revenue Department. Section 144C has given specific guidelines as to passing of assessment in relation to Section 143 (3) of the Act. Section 144C(4), the Assessing Officer shall pass the assessment order under Sub- Section 3 within one month from the end of the month in which the acceptance is received or the period of filing of objections under Sub Section (2) expires. Thus, Section 144C has given a mechanism for the assessees to make a reference to Dispute Resolution Panel even before concluding the assessments. The assessee in the present case instead of challenging assessment order before the CIT (A), has preferred the procedural route of DRP and which was duly accepted and adjudicated by the DRP. The ld. DRP duly accepted the reference and adjudicated the matter taking into cognizance the new provision inserted as well as the objections raised by the assessee. The assessee has availed the provisions of Section 144C, voluntarily as per the procedure laid down under Income Tax Statute and the ld. DRP rightly accepted the reference filed and adjudicated the matter. The case laws cited by the Ld. AR in which the decision of the Delhi Tribunal in case of DCIT Vs. M/s Travelport (Supra) for Assessment Year 2010-11 was taken in consolidated appeals for
ITA No.619/Del/2015 12 Jindal Steel & Power Ltd. earlier Assessment Years as well. The ratio held by the Tribunal, that the provisions of Section 144C are not applicable to the earlier years i.e. the assessment years 2006-07 to 2009-10 is undisputable and in accordance with the provisions of law. In- fact, the assessment in the present case is very much covered u/s 144C as the statute is not vague about the effective date and relates to Assessment Year 2010-11. The decisions relied by the Ld. AR are on a different foothold.
When the statute uses clear and explicit language there is no need to interpret the provisions of a Section. For the sake of complete understanding and ready reference with regard to applicability of the provisions u/s 144C for the assessment year in question and for that matter all the assessments pending as on the date of amendment of the Act, the entire scheme of ld. DRP is being examined.
Section 144C envisages a change of forum and it leads to complete cessation of the jurisdiction of the Assessing Officer on passing of the draft order. Thereafter the Assessing Officer is to give effect to either the direction of the Dispute Resolution Panel or pass an order on acceptance by the assessee. The provisions of Section 144C reads as under:
“144C. (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation which is prejudicial to the interest of such assessee.
ITA No.619/Del/2015 13 Jindal Steel & Power Ltd.
(2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,-
(a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with,-
(i) the Dispute Resolution Panel; and (ii) the Assessing Officer.
(3) The Assessing Officer shall complete the assessment on the basis of the draft order, if-
(a) the assessee intimates to the Assessing Officer the acceptance of the variation; or (b) no objections are received within the period specified in sub-section (2).
(4) The Assessing Officer shall, notwithstanding anything contained in section 153 or section 153B, pass the assessment order under sub-section (3) within one month from the end of the month in which,-
(a) the acceptance is received; or (b) the period of filing of objections under sub-section (2) expires.
(5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment.
ITA No.619/Del/2015 14 Jindal Steel & Power Ltd.
(6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after considering the following, namely:-
(a) draft order; (b) objections filed by the assessee; (c) evidence furnished by the assessee; (d) report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be collected by, it; and (g) result of any enquiry made by, or caused to be made by, it.
(7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),-
(a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result of the same to it.
(8) The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order.
Explanation.- For the removal of doubts, it is hereby declared that the power of the Dispute Resolution Panel to enhance the variation shall include and shall be deemed always to have included the power to consider any matter arising out of the assessment proceedings relating to the draft order,
ITA No.619/Del/2015 15 Jindal Steel & Power Ltd. notwithstanding that such matter was raised or not by the eligible assessee.
(9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members.
(10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer.
(11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively.
(12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee.
(13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary Contained in section 153 or section 153B, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.
(14) The Board may make rules for the purposes of the efficient functioning of the Dispute Resolution Panel and expeditious disposal of the objections filed under sub-section (2) by the eligible assessee.
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(14A) The provisions of this section shall not apply to any assessment or reassessment order passed by the Assessing Officer with the prior approval of the [Principal Commissioner or] Commissioner as provided in sub-section (12) of section 144BA.]
(15) For the purposes of this section,-
(a) "Dispute Resolution Panel" means a collegium comprising of three Principal Commissioners or Commissioners of Income-tax constituted by the Board for this purpose;
(b) "eligible assessee" means,-
(i) any person in whose case the variation referred to in sub- section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; and [(ii) any non-resident not being a company, or any foreign company.]”
Section 144C is a self contained provision which carves out a separate class of assesses i.e. “eligible assessee‟ i.e. any person in whose case the variation arises as a consequence of the order of the Transfer Pricing Officer passed under sub- section (3) of Section 92CA. For this class of assesses, it prescribes a collegium of three commissioners, once objections are preferred. Dispute Resolution Panel’s powers are similar with that of CIT(A), including the power to confirm, reduce or enhance the variation proposed and to consider the issues not agitated by the Assessee in the objections. As per the provisions of Section 144C, the Dispute Resolution Panel can
ITA No.619/Del/2015 17 Jindal Steel & Power Ltd. issue directions as it thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment and the Dispute Resolution Panel can confirm, reduce or enhance the variations proposed in the draft order. It is specifically stipulated in Section 144C that every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. This is akin to the Assessing Officer giving effect to an order passed by the Appellate Authority or the Courts.
Thus, Section 144C envisages a change of forum only but does not affect the chargeability when compared with the proceedings under the route of CIT-Appeals and it leads to complete cessation of the jurisdiction of the Assessing officer on passing of the draft order. Thereafter the Assessing officer is to give effect to either the direction of the Dispute Resolution Panel or pass an order on acceptance by the Assessee.
It is the settled position of law that when a power is given to do certain thing in a certain way, the thing must be done in that way but not any other methods.
Thus, it is the settled position of law that failure to adhere to the mandatory procedure prescribed under Section 144C of the Act would vitiate the entire proceedings hence the adjudication by the ld. DRP against the reference filed by the assessee in the instant case cannot be held to be invalid.
The Finance (No.2) Act, 2009, has given a beneficial legislation for the assessee who can speed up their tax disputes for which the assessee has to avail the provisions, the assessee cannot contest that the order passed in conclusion be bad in
ITA No.619/Del/2015 18 Jindal Steel & Power Ltd. law or void ab-initio or barred by limitation. In-fact, the assessee’s contentions before the assessment proceedings were properly taken into account and there was no procedural lapse pointed out by the assessee or Ld. AR as prescribed u/s 144C as well as there was no lapse on substantive basis, as the assessee has availed the remedy prescribed under the Section before the Revenue Authorities. To clarify further, the Finance Act clearly mentions that the reference to Dispute Resolution Panel was inserted by the Finance(No.2) Act, 2009, w.r.e.f. 01.04.2009, Section 144C(1) clearly mentions that notwithstanding anything to the contrary contained in the Act, in the first instance, forward a draft of the proposed order of the assessment to the eligible assessee, if he proposes to make on or after 1st day of October 2009, any variation in the income or loss return which is prejudicial to the interest of such assessee. In the instant case, the AO has rightly forwarded the draft of the proposed order of assessment on 03.01.2014 as per the provisions of Section 144C(1) and the assessee has also filed his objections to the variation with ld. DRP on 29.04.2014 in accordance with the Section 144C(2). The ld. DRP vide order dated 31.12.2014 has issued directions in accordance with the provisions of Section 144C(6). Subsequently, the assessee upon the receipt of the directions issued under sub-section (5) has completed the assessment on 08.01.2015. Thus, on going through the entire provisions of the law, the judgments quoted, the orders of the Tribunal, the procedure followed by the assessee, TPO, ld. DRP and the Assessing Officer has been found to be correct as per the provisions of the Act inserted by the Finance (No.2) Act, 2009, hence, the additional grounds filed on 8.7.2021 with
ITA No.619/Del/2015 19 Jindal Steel & Power Ltd. regard to non-applicability of provisions Section 144C are hereby dismissed.
The assessee has filed another application under Rule 11 of the Income Tax(Appellate Tribunal) Rules, 1963 for admission of additional grounds of appeal on 19.04.2019. The additional grounds read as under: “3. That the assessment order passed dated 08.01.2015 for A.Y. 2010-11 by the JCIT is illegal, bad in law and without jurisdiction as the JCIT was not the competent person to pass the said assessment order.
That the JCIT who passed the assessment order dated 08.01.2015 for AY 2010-11 was not competent to pass the said order, as such the assessment order is liable to be quashed.”
Validity of the order-Joint Commissioner is not competent A.O.
The ld. AR argued that the Joint Commissioner is not competent to pass the order under the provisions of Section 143(3). It was argued there was no valid order conferring the power of the Assessing Officer to the Joint Commissioner, Range, Hisar. Learned Counsel for the Assessee, therefore, submitted that JCIT, Range Hisar, Hisar has no jurisdiction to pass the present assessment order. Therefore, it is nullity which is not curable under the Law. The entire assessment order is, therefore, liable to be set aside and quashed for lack of jurisdiction of the A.O.
Controverting these arguments, the ld. DR submitted that the Assessment Order passed dated 08.01.2015 for the A.Y. 2010-11 by the Joint Commissioner of Income Tax is valid order
ITA No.619/Del/2015 20 Jindal Steel & Power Ltd. as it has been passed by the Competent Authority. The Ld. D.R. submitted that in terms of Section 124(3) jurisdiction of an A.O. cannot be called in question by the assessee after the expiry of one month from the date on which he was served with the notice, which in this case assessee has not raised any objection. The Ld. D.R. in support of the above proposition relied upon the following decisions:
Mr. Abhishek Jain vs. ITO 94 taxmann.com 355 (HC) CIT vs. S.S. Ahluwalia 46 taxmann.com 169
Further, it was argued that the CIT, Hisar vide order dated 29.07.2013 had issued order u/s 120 of the Income Tax Act, 1961 assigning the case to the Joint Commissioner. The ld. DR submitted the written reply received from JCIT, Hisar and the order dated 29.07.2013 of the CIT, Hisar.
For the convenience of the ready reference, the entire submission of the ld. DR along with the order dated 29.07.2013 passed by the CIT, Hisar is reproduced as under: Dated: 06.02.2020 F. No. JCIT/HSR/2019-20/2896
To, The Income Tax Officer, O/o The Commissioner of Income Tax ( DR) (TP) Income Tax Appellate Tribunal, 1-1 Bench, Lok Nayak Bhawan, Khan Market, New Delhi-110003.
Sub:- Forwarding of additional grounds of appeal in the case of M/s Jindal Steel and Power Ltd. ( Appellant) in ITA No. 619/Del/2015 for AY 2010-11 - Regarding
ITA No.619/Del/2015 21 Jindal Steel & Power Ltd.
******* Kindly refer to your office letter F. No. CIT(DR)/TP/I-1 Bench/ITAT/2019- 20/85 dated 29.01.2020 on the subject cited above. In this connection it is intimated that the then AO i.e. JCIT, Hisar Range, Hisar had passed the order and was having jurisdiction over the case.
As per your letter the assessee has raised following additional grounds:-
"That the assessment order passed dated 08.01.2015 for AY 2010-11 by the joint Commissioner of Income Tax ("JCIT") is illegal, bad in law and without jurisdiction as the JCIT was not the competent person to pass the said assessment order.
That the JCIT who passed the assessment order dated 08.01.2015 for AY 2010-11 was not competent to pass the said order, as such the assessment order is liable to be quashed.
As per Order dated 29.07.2019 the Commissioner of Income Tax, Hisar vide its order u/s 120 of I. T. Act assigned this case for completing assessment holding as under:-
"In exercise of powers conferred by sub section (1), (2) and (5) of section 120 of the Income Tax Act, 1961 read with CBDT's Notification no. 251/2001 ( F. No. 187/6/2001/IT(A-1) dated 23.08.2001 enabling me in this behalf, I, the Commissioner of Income Tax Hisar hereby authorize the Assessing Officers of this Charge mentioned in Column 6 to concurrently exercise powers
ITA No.619/Del/2015 22 Jindal Steel & Power Ltd. and function of the Assessing Officers mentioned in column 5 in respect of cases mentioned in column no 3 of the table."
Thus the then JCIT was specifically assigned jurisdiction over the case by the CIT Hisar who was empowered to assign the cases as per provisions of the Section 120 of I. T. Act. Thus the JCIT was competent to pass order in this case and order passed by the JCIT is legal and as per provision of law. The copy of CIT's Order and other details are also enclosed herewith for ready reference.
In view of the above the additional ground raised by the assessee regarding jurisdiction and legality of assessment order is liable to be rejected.” Sd/- (P.K. Sharma) Joint Commissioner of Income Tax, Hisar Range, Hisar
F.No.CIT/HSR/Tech./127/2013-14/2591-95 Office of the Commissioner of Income Tax, Aayakar Bhawan, Sector-14, Hisar - 125 001 (Haryana.) Dated: 29.07.2013. ORDER:
In exercise of powers conferred by sub section (1), (2) and (5) of Section 120 of the Income Tax Act, 1961 read with CBDT’s Notification No: 251/2001 (F.No: 187/6/2001-IT(A-1) dated 23.08.2001 enabling me in this behalf, I, the Commissioner of Income Tax, Hisar hereby authorize the Assessing Officers of this Charge mentioned in Column 6 to concurrently exercise powers and function of the Assessing Officers mentioned in
ITA No.619/Del/2015 23 Jindal Steel & Power Ltd. column 5 in respect of the cases mentioned in Column No. 3 of the table:
S. PAN Name of the Assessee A.Y. From To No. 1 AAACJ7097D Jindal Steel & Power 2010-11 ACIT, Hisar JCIT, Hisar Ltd., Delhi Road, Hisar Range, Hisar 2 ABCFS5513P Sushil Kumar Munish 2011-12 ITO W-4, Hisar JCIT, Hisar Kumar, 39A, Nai Anaj Range, Hisar Mandi, Hisar 3 AABCM0054E Mangali Petrochem Ltd. 2011-12 ACIT, Hisar JCIT, Hisar Range, Hisar Ajay Polymers, 14 t h 4 AAIFA6955C 2011-12 ACIT, Hisar JCIT, Hisar K.M. Stone, Delhi Range, Hisar Road, Hisar 5 AACCS9317B Supreme Mobiles Ltd., 2011-12 ITO W-4, Hisar JCIT, Hisar 473- 74, Automobiles Range, Hisar Market, Hisar 6 AAAAT8856C The Bass Co-op. 2011-12 ITO W-1, Hisar JCIT, Hisar Marketing cum Range, Hisar Processing Society Ltd., VPO Bass 7 AARFS8397K Subham Fertilizers & 2011-12 ITO W-4, Hisar JCIT, Hisar Chemicals Ltd., NGM, Range, Hisar Hisar 8 AAACN5499D Jindal Polybutton Ltd., 2011-12 ACIT, Hisar JCIT, Hisar Delhi Road, Hisar Range, Hisar 9 AACFG5467B Ganesh Roadlines, O.P. 2011-12 ACIT, Hisar JCIT, Hisar Jindal Marg, Hisar Range, Hisar 10 AALPU0923B Sorabh Uthra 2011-12 ITO W-4, Hisar JCIT, Hisar C/o M/s. V.S. Range, Hisar Industries, Near Bhatia Colony, Hansi 11 AABCJ3714G JNB Steel Industries 2011-12 ACIT, Hisar JCIT, Hisar Pvt. Ltd., Sec. 27-28, Range, Hisar Hisar 12 ACEPK8515A Rakesh Kedia Prop. 2011-12 ITO W-3, Hisar JCIT, Hisar M/s. Sumit Industries, Range, Hisar 17, Anaj Mandi, Hisar 13 AAEFH3083N Haryana Guar Gum and 2011-12 ITO W-2, Hisar JCIT, Hisar Chemicals, Hisar Range, Hisar 14 ACPPJ1449K Anil Jindal, A-1, Jindal 2011-12 ITOW-1, Hisar JCIT, Hisar Industries Ltd., Staff Range, Hisar Colony, Model Town, Hisar 15 AIAPG1382Q Pawan Kumar Garg, 2011-12 ITO W-3, Hisar JCIT, Hisar 1380, U.E.-ll, Hisar Range, Hisar
The jurisdiction in the above stated cases are transferred for the purpose of completing pending scrutiny assessments. The
ITA No.619/Del/2015 24 Jindal Steel & Power Ltd. entries in respect of demand raised would be made in the D&CR register of the AO having jurisdiction presently. AOs having present jurisdiction would continue to exercise jurisdiction in respect of other functions like recovery, remand report, reopening, audit objections, rectifications, refunds etc. After 15 days of completion of assessment in a particular case, the jurisdiction would be revert back to the AO concerned as per order No: JCIT/HSR/Jurisdiction/2005-06 dated 14.06.2006 and the records would be returned back to the concerned AO.
This order shall come into force with effect from 30.07.2013.” Sd/- (Ashok Kumar Saroha) Commissioner of Income Tax Hisar
We have also examined the Notification No. 251/2001/F.No. 187/6/2001/ITA-I which is as under:
MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAKES) NOTIFICATION New Delhi, the 23rd August, 2001 (INCOME TAX)
S.O.822(E).—In exercise of the powers conferred by sub- sections (1) and (2) of section 120 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes, hereby:-
(a) directs that the Commissioner of Income-tax specified in column(2) of Schedule annexed hereto shall perform their functions in respect of such territorial areas or such persons or classes of persons or of such incomes or classes of incomes or
ITA No.619/Del/2015 25 Jindal Steel & Power Ltd. of such cases or classes of cases in respect of which the said Commissioners of Income-tax were performing their functions immediately before the commencement of the Government of India, Central Board of Direct Taxes Notification number 732(E) dated 31.07.2001, by virtue of the jurisdiction vested in them under notifications issued by the Board or any other Income-tax authority from time to time;
(b) further directs that the Joint Commissioners of Income-tax subordinate to the Commissioners of Income-tax referred to in clause (a) shall perform their functions in respect of such territorial areas or such persons or classes of persons or of such incomes or classes of incomes or of such cases or classes of cases in respect of which the said Commissioners of Income-tax were performing their functions immediately before the commencement of the Government of India, Central Board of Direct Taxes Notification number 732(E) dated 31.07.2001, by virtue of the jurisdiction vested in them under notifications issued by the Board or any other Income-tax authority from time to time;
(c) further also directs that the Assessing Officers subordinate to the -Joint Commissioners of Income-tax referred to in clause (b) shall perform their functions in respect of such territorial areas or such persons or classes of persons or of such incomes or classes of incomes or of such cases or classes of cases in respect of which the said Commissioners of Income-tax were performing their functions immediately before the commencement of the Government of India, Central Board of Direct Taxes Notification number 732(E) dated 31.07.2001, by
ITA No.619/Del/2015 26 Jindal Steel & Power Ltd. virtue of the jurisdiction vested in them under notifications issued by the Board or any other Income-tax authority from time to time; (d) further also directs that the Commissioners of Income-tax specified in column (2) of the said Schedule hereto annexed, having their headquarters at the places specified in the corresponding entries in column (3) of the said Schedule, shall exercise the powers and perform the functions in respect of such cases or classes of cases of persons or classes of persons specified in the corresponding entries in column (4) of the said Schedule and in respect of all incomes or classes of income;
(e) authorises the Commissioners of Income-tax referred to in this notification to issue orders in writing for the exercise of the powers and performance of the functions by the Joint Commissioners of Income-tax, who are subordinate to them, in respect of such cases or classes of cases of persons or classes of persons specified in the corresponding entries in column (4) of the said Schedule and in respect of all incomes or classes of income;
(f) further authorises the Joint Commissioners of Income-tax referred to in clause (e) of this notification, to issue orders in writing for the exercise of the powers and performance of the functions by the Assessing Officers, who are subordinate to them, in respect of such cases or classes of cases of persons or classes of persons specified in the corresponding entries in column (4) of the said Schedule and in respect of all incomes or classes of income in respect of which such Joint commissioners
ITA No.619/Del/2015 27 Jindal Steel & Power Ltd. of Income-tax are authorised by the Commissioner of Income- tax under clause(e) of this notification.
This notification shall come into force with effect from the date of publication in the official Gazette. S.No. Designation of Income-tax Head Cases or class of cases authorities quarter
(1) (2) (3) (4) 1 Commissioner of Income- Delhi All cases assigned under section 127 of the tax (Central-I), Delhi Income-tax Act, 1961(43 of 1961). 2 Commissioner of Income- Delhi All cases assigned under section 127 of the tax (Central- II), Delhi Income-tax Act, 1961(43 of 1961). 3 Commissioner of Income- Delhi All cases assigned under section 127 of the tax (Central- III), Delhi Income-tax Act, 1961(43 of 1961). 4 Commissioner of Income- Mumbai All cases assigned under section 127 of the tax (Central-I), Mumbai Income-tax Act, 1961(43 of 1961). 5 Commissioner of Income- Mumbai All cases assigned under section 127 of the tax (Central- II), Mumbai Income-tax Act, 1961(43 of 1961). 6 Commissioner of Income- Mumbai All cases assigned under section 127 of the tax (Central- Ill), Mumbai Income-tax Act, 1961(43 of 1961). 7 Commissioner of Income- Mumbai All cases assigned under section 127 of the tax (Central- IV), Mumbai Income-tax Act, 1961(43 of 1961). 8 Commissioner of Income- Cochin All cases assigned under section 127 of the tax (Central), Cochin Income-tax Act, 1961(43 of 1961). 9 Commissioner of Income- Chennai All cases assigned under section 127 of the tax (Central-I), Chennai Income-tax Act, 1961(43 of 1961). 10 Commissioner of Income- Chennai All cases assigned under section 127 of the tax (Central- II), Chennai Income-tax Act, 1961(43 of 1961).
11 Commissioner of Income- Chennai All cases assigned under section 127 of the tax (Central- Ill), Chennai Income-tax Act, 1961(43 of 1961). 12 Commissioner of Income- Kolkata. All cases assigned under section 127 of the tax (Central-I), Kolkata Income-tax Act, 1961(43 of 1961). 13 Commissioner of Income- Kolkata All cases assigned under section 127 of the tax (Central- II), Kolkata Income-tax Act, 1961(43 of 1961). 14 Commissioner of Income- Kolkata All cases assigned under section 127 of the tax (Central-III), Kolkata Income-tax Act, 1961(43 of 1961). 15 Commissioner of Income- Pune All cases assigned under section 127 of the tax (Central), Pune Income-tax Act, 1961(43 of 1961). 16 Commissioner of Income- Nagpur All cases assigned under section 127 of the tax (Central), Nagpur Income-tax Act, 1961(43 of 1961). 17 Commissioner of Income- Ahmadabad All cases assigned under section 127 of the tax (Central-I), Income-tax Act, 1961(43 of 1961). Ahmadabad 18 Commissioner of Income- Ahmadabad All cases assigned under section 127 of the tax (Central- 11), Income-tax Act, 1961(43 of 1961). Ahmadabad
ITA No.619/Del/2015 28 Jindal Steel & Power Ltd. 19 Commissioner of Income- Jaipur All cases assigned under section 127 of the tax (Central), Jaipur Income-tax Act, 1961(43 of 1961). 20 Commissioner of Income- Hyderabad All cases assigned under section 127 of the tax (Central), Hyderabad Income-tax Act, 1961(43 of 1961). 21 Commissioner of Income- Patna All cases assigned under section 127 of the tax (Central), Patna Income-tax Act, 1961(43 of 1961). 22 Commissioner of Income- Bangalore All cases assigned under section 127 of the tax (Central), Bangalore Income-tax Act, 1961(43 of 1961). 23 Commissioner of Income- Kanpur All cases assigned under section 127 of the tax (Central), Kanpur Income-tax Act, 1961(43 ofi 1961). 1 24 Commissioner of Income- Ludhiana All cases assigned under section 127 of the tax (Central), Ludhiana Income-tax Act, 1961(43 of 1961).
[Notification No. 251/2001/F. No. 187/6/2001/ITA-I] PROMILA BHARDWAJ, Director
Perusal of the above notification issued by the CBDT which has been relied upon and quoted in the order dated 29/07/2013 by the Ld.CIT Hisar doesn’t confer any such powers to the CIT Hisar. Thus, the order dated 29.07.2013 passed by the CIT, Hisar is without any order by the CBDT u/s 120(4).
In the light of these facts, the legal issue of conferring the jurisdiction on the AO by the CIT is examined in detail.
Section 2(7A) of the I.T. Act, 1961, provides definition of “Assessing Officer”
Section 2 (7A) –
In this Act, unless the context otherwise requires,—
(7A) "Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer
ITA No.619/Del/2015 29 Jindal Steel & Power Ltd. who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director who is directed under clause (b) of sub- section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act.”
The above provision provides that Joint Commissioner to be Assessing Officer only when he has been directed under section 120(4)(b) by the Board to act as an Assessing Officer.
For the sake of clarity, Section 120 is reproduced as
under:
“Jurisdiction of income-tax authorities.
(1) Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities.
Explanation.—For the removal of doubts, it is hereby declared that any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub-section (1).
(2) The directions of the Board under sub-section (1) may authorise any other income-tax authority to
ITA No.619/Del/2015 30 Jindal Steel & Power Ltd. issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who are subordinate to it.
(3) In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income- tax authority authorised by it may have regard to any one or more of the following criteria, namely:— (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases.
(4) Without prejudice to the provisions of sub- sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,—
(a) authorise any Principal Director General or Director General or Principal Director or Director to perform such functions of any other income-tax authority as may be assigned to him by the Board; (b) empower the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner 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 provision 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
ITA No.619/Del/2015 31 Jindal Steel & Power Ltd. provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply.
(5) The directions and orders referred to in sub- sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply.
(6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification.”
The Co-ordinate Bench of ITAT Delhi Benches in the case of Mega Corporation Ltd. vs. Addl. CIT, Range-6, New Delhi [2015] 155 ITD 1019 (Delhi-Trib.) in which it was held as under:
“Additional Commissioner of Income Tax can perform functions and, exercise powers of an Assessing Officer
ITA No.619/Del/2015 32 Jindal Steel & Power Ltd. only if he is specifically directed under section 120(4)(b).”
According to Section 120(1) and (2) of the I.T. Act, the Board may assign to Income Tax Authorities to exercise any of the powers and perform of or any of the functions conferred on as the case may be under this Act to act as Income Tax Authorities. The Board may also issue directions or authorise any other Income Tax Authorities to issue orders in writing for exercise of powers and perform of functions by or any of other Income Tax Authorities who were subordinate to it.
In issuance of such directions under sub-sections (i) and (ii), the Board or any other Income Tax Authorities authorised by it may have regard to the criteria namely territorial area, person or class of persons, income or class of income and cases or class of cases. According to Section 120(4) of the I.T. Act, Board may by general or special order authorise or empower Pr. Director General or Director General or Pr. Chief Commissioner or Chief Commissioner or Pr. Commissioner or Commissioner to issue order in writing that the powers and functions conferred on or as the case may be assign to the A.O. by or under this Act in respect of any specified area or person or class of persons or income or class of income or case or class of cases, shall be exercised or perform by Joint Commissioner or Others and where any order is made under this clause, reference in any other provisions of this Act or in any Rules made thereunder to the A.O. shall be deemed to be reference to the Joint Commissioner or Others by whom the powers and functions are to be exercised or perform under such order and any provisions
ITA No.619/Del/2015 33 Jindal Steel & Power Ltd. of this Act requiring approval or sanction of the Joint Commissioner shall not apply.
These provisions, therefore, make it clear that the Board may assign the power to any Income Tax Authority to exercise powers of the A.O. having regard to territorial area etc., or the Board may authorise or empower Pr. Director General, Pr. Chief Commissioner etc., to issue order in writing to assign powers of the A.O. to other Authorities including Joint Commissioner of Income Tax as Assessing Officer.
Considering the provisions of Section 2(7A) of the I.T. Act, 1961, which defines the definition of the Assessing Officer would make it clear that Joint Commissioner of Income Tax could function as an Assessing Officer when jurisdiction have been assigned to him by virtue of the directions or orders issued under section 120(4)(b) of the I.T. Act, 1961.
On going through the entire events, we find that the order dated 29.07.2013 passed by the ld. CIT (A) invoking the powers conferred by Sub-Section (1), (2) and (5) of Section 120 would not confer any powers to the CIT to confer the concurrent exercise of powers to the Assessing Officers. Further, when concurrent powers are conferred both the officers namely Joint/Addl. Commissioner along with the ACIT or DCIT/ ITO would exercise the jurisdiction. Whereas the order dated 29.07.2013 of the CIT conferred concurrent exercise from ACIT, Hisar to JCIT, Hisar which effectively culminated in transfer of the assessment for the year 2011-12 from ACIT, Hisar to JCIT, Hisar. When the case is transferred from one Assessing Officer to the other Assessing Officer, JCIT in this case, it is legally
ITA No.619/Del/2015 34 Jindal Steel & Power Ltd. mandated to pass order u/s 127 by the ld. CIT invoking the “power to transfer” u/s 127.
In the instant case, (1) there is no order by the ld. CIT invoking powers conferred u/s 120(4) wherein sub-Section (b) empowers the CIT 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 the Act in respect of any specified areas or persons shall be exercised by the Joint Commissioner. In the absence of any order by the ld. CIT invoking the powers conferred by sub-Section (4) of Section 120, we hold that the order passed by the Assessing Officer lacks jurisdiction. (2) Further, we also find that the order of the ld. CIT in pursuance with the notification No.251/2001 also did not confer any jurisdiction to the CIT, Hisar. (3) In addition, no order has been issued by the Ld.CIT transferring the case from one AO to other AO u/s 127 is also wanting in the instant case.
Considering the totality of the facts and circumstances of the case, we are of the view that JCIT, Hisar 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.
The Additional Ground No.2 of appeal of assessee is hereby allowed.
ITA No.619/Del/2015 35 Jindal Steel & Power Ltd. 39. In the result, the appeal of the assessee is partly allowed. Order Pronounced in the Open Court on 17/09/2021.
Sd/- Sd/- (Suchitra Kamble) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 17/09/2021 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR