DOLPHIN PROMOTERS AND BUILDERS,RAIPUR vs. ADDL.CIT, RANGE-1, RAIPUR, RAIPUR

The captioned appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals), NFAC, Delhi, (in short “Ld. CIT(A)”), u/s 250 of the Income Tax Act, 1961 (in short “the Act”), passed on 28.07.2023, which in turn arises from the order passed by Additional Commissioner of Income Tax, Range-I, Raipur (in short “Ld. AO”) u/s 144 of the Act, dated 03.02.2014, for AY. 2011-12.

Being dissatisfied with the order of Ld. CIT(A), the assessee filed an appeal before this tribunal which is under consideration in the present case.

At the threshold of the hearing, it is informed that the appeal of the assessee is barred by limitation being filed with a delay of 151 days. Regarding this defect Shri Sunil Kumar Agrawal, CA, Ld. Authorized Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur Representative (in short “Ld. AR”), submitted that the present appeal was filed with a delay of 151 days for the reason that the impugned order passed by the Ld. CIT(A) was never physically served on the assessee, whereas in appeal memo in Form No. 35, manually filed by the assessee before the First Appellate Authority, the option regarding “whether notices / communication may be sent on email ?” was opted by the assessee as “No” and the address of the assessee was furnished for sending the communications to the assessee. The assessee, therefore, was under Bonafide belief that the communications, such as notices and order by the First Appellate Authority will be served upon the assessee in the physical mode but the same had not happened. It was the submission that as soon as the accountant of the assessee Firm has informed in the month of January, 2024, about passing of order by the First Appellate Authority on 28.07.2023, the appellant approached its counsel to take remedial action and as suggested, the appeal has been filed in the month of March, 2024. To support the aforesaid contention, Ld. AR furnished before us an application along with affidavit of the partner of the assessee firm affirming the aforesaid facts on oath. Copy of application dated 17.05.2024 along with affidavit are extracted hereunder for the sake of completeness of facts:

Backed by aforesaid submission, it was the prayer by Ld. AR that the delay involved in the present case was on account of Bonafide reasons beyond the control of assessee without any mala fide intention therefore, the same may kindly be condoned and the matter of assessee may be heard on the issues raised therein.

Per contra, Ld. CIT-DR objected to the aforesaid contentions raised by the Ld. AR and submitted that the delay involved in present case is inordinate, therefore, the appeal of assessee needs to be dismissed on this count itself.

After a thoughtful consideration to the aforesaid contention of the rival parties. On perusal of the material on record, we find that the present appeal was filed before the Ld. CIT(A) under pre faceless regime on 10.03.2014, which, thereafter, was migrated to National Faceless Appeals Centre, CBDT. It is evident from Form No. 35 filed by the assessee for appeal before the Ld. CIT(A), assessee had not mentioned any email ID, whereas against the column for information about address to which notices may be sent to the appellant, assessee filled its address as “M/s Dolphin Promotors & Builders, A-1, Sai Nagar, Near Sai Mandir, Devendra Nagar Road, Raipur,(C.G.)”. There was no further clarification regarding the mode of communication either by the department or by the assessee, therefore, it can be presumed that the assessee was under Bonafide belief, having been served with notices / order in physical form which could never effected by the revenue. In view of such facts and circumstances, we find substance in the contention raised by the assessee that there was Bonafide reason for the reason delay in filing of Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur present appeal which was beyond the control of the assessee, therefore, as there was sufficient cause for not filing the appeal in time, we find it appropriate to condoned the delay involved in present case.

At the threshold of the hearing, Ld. AR pressed following additional grounds: Additional Ground No. 1 dated 04.04.2024 On the facts and circumstances of the case and in law, assessment made u/s 144 by Addl. CIT is invalid as he was not having valid jurisdiction over the assessee firm for making assessment; as he was not the ‘jurisdictional AO’ as per sec2(7A) who is directed u/s 120(4)(b) to exercise/perform the powers/functions conferred on, or assigned to, an ‘AO’ under the Act; in absence of order u/s120(4)(b) , Addl. CIT would be without authority of law for making assessment ; assessment made by Addl. CIT would be invalid; is liable to be quashed.”

Based on aforesaid additional grounds, the assumption of jurisdiction for making the assessment by the Ld. AO has been challenged, stating that in absence of separate order passed u/s 120(4)(b) authorizing the additional CIT to perform the functions and exercised the powers of an Ld. AO u/s 2(7A) and also in absence of an order u/s 127 by the competent authority transferring the case from ACIT-1(1) to Addl. CIT, Range-1, the assessment order passed by Addl. CIT, Range-1, Raipur u/s 144 dated 03.02.2014 for the AY 2011-12 is without having a valid assumption of jurisdiction for framing the assessment, is invalid, void ab initio, and is liable to be quashed.

On the aforesaid contention by the Ld. AR, the revenue was directed to rebut, in response Ld. CIT-DR has sought time to carry out verification of records of the Pr. CIT-1, Raipur, to check that whether any order u/s 120(4)(b) of the Act to confer the jurisdiction to Addl. CIT, Range-1 to frame assessment in the present case was passed or not. In next hearing Ld. CIT(A) further sought some time to obtain a report from the concerned AO on the issue of jurisdiction. Time and again, the issue was discussed during the hearing and time was granted to the revenue on their request to furnish the necessary information in order to satisfy the mandate of law. Ld. CIT-DR furnished Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur before us report from concerned AO dated 03.06.2024 and 07.10.2024, the same are extracted hereunder for the sake of completeness of facts:

Accordingly, it has now been decided that the following scheme for improving quality of assessments shall be implemented from calendar year 2010 onwards, (i) At the beginning of each calendar year i.e. in the month of January, the Range Head in consultation with the concerned Assessing Officer would identify at least 5 pending time-barring assessment cases in respect of each Assessing Officer of his Range for monitoring These should normally include cases taken up for scrutiny with the permission of CCIT. The selection should be done jointly by the Range Head and the concerned Assessing Officer. Cases of PSUs and loss-making concerns should normally not be identified for this purpose. This exercise should also include those Ranges which are held as additional charge by a Range Head in January. (ii) The Range Head would issue directions u/s 144A in the identified cases for the guidance of the Assessing Officer regarding the course of investigation to enable him to complete these assessments in a proper manner. This should be done at the earliest available opportunity so as to allow the Assessing Officer to have sufficient time to complete the assessment proceedings. A copy of the directions issued by the Range Head would also be endorsed to the CIT. The Range Head should also monitor the subsequent developments in the assessment proceedings in these cases.

These instructions may please be brought to the notice of all officers working in your Cadre Control region immediately for proper compliance. Proformae Performance Ranking of Assessing Officers CCIT CIT RANGE NAME OF NO. OF NO. OF THE ASSESSMENTS QUALITY ASSESSING COMPLETED ASSESSMENTS OFFICER OUT OF 2 1 2 3 4 5 6 Performance Rankings for Range Heads as Guides CCIT CIT RANGE NAME OF NO. OF NO. OF QUALITY THE CASES IN ASSESSMENTS ADDL./JOINT WHICH OUT OF 2 CIT GUIDANCE GIVEN U/S 144A 1 2 3 4 5 6 MANAGEMENT OF SCRUTINY WORKLOAD Kindly refer to above 2. Considering the increasing gap between workload and disposal of scrutiny assessments, it has been decided to entrust the Range Heads with the responsibility of making assessments in top revenue Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur potential cases of the Range to be selected on the basis of returned Income. 3. In this regard, targets for disposal of cases by the Range Heads are prescribed as under:- S. No. Charge Minimum number of cases to be disposed of per year 1 Corporate 20 2 Non-Corporate / Mixed / 30 Salaries However, the CCITs, considering the local circumstances and other factors, may assign more cases to the Addl. CITs. / Joint CITs.

It is hereby clarified that the above targets are not applicable to Central Ranges.

On 21.11.2024, Ld. CIT-DR referring to CBDT Circular No. 6/2009 dated 18.12.2009, requested for further time to obtain the list of cases from the office of CCIT, Raipur to ascertain the cases entrusted to the range head with the responsibility to make assessment for the subject assessment year 2011-12. However, in the next hearing dated 11.12.2024 and 19.12.2024, the requisite orders or lists by the office of CCIT could not be placed on record by the revenue.

In rebuttal, to the aforesaid contentions raised by the Ld. AO stating the reasons for inapplicability of any order u/s 120(4)(b) of the Act in the present case, Ld. AR representing the assessee submitted that the issue is squarely covered by various decisions as under:

He further in his written synopsis dated 01.11.2024, submitted as under:

Backed by aforesaid submissions, it was the prayer by Ld. AR that in absence of an order u/s 120(4)(b), the Addl. CIT, Range-1, was not conferred with the assumption of jurisdiction to frame the assessment in the case of the assessee firm in the present case, therefore, the assessment order passed in the present case was void ab initio and at nullity.

We have considered the rival submissions, perused the material available on record inter alia reports by the Ld. AO and the judicial pronouncements relied upon by the Ld. AR. Admittedly, as stated by the revenue through the reports of Ld. AO, no order u/s 120(4)(b) of the Act was passed in the present case so as to confer upon the jurisdiction with the Addl. CIT, Range-1, Raipur to exercise or perform Power of Functions of Ld. AO.

On perusal of the CBDT Instruction 06/2009 dated 18.12.2009, the Central Board of Direct Taxes shown its concerned about the need for improving general quality of scrutiny assessment on a sustainable basis. CBDT further mentioned about their Instruction No. 2/2006 dated 27.04.2006, which required monitoring of scrutiny assessment by the range head under the powers available to them u/s 144A of the Act. In continuation, it was advised that the range head would issue directions u/s 144A in the identified Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur cases for the guidance of Assessing Officers regarding the course of investigation to enable him to complete these assessments in proper manner. It is further stated in the subject notification that the benchmark for quantum of addition to the returned income, which may qualify for being a quality assessment, may be decided by concerned CCIT depending upon the potential of the given range/ charge. It is also advised by the CBDT that, it is expected that apart from the category of assessee’s defined in Para (v) of the impugned instruction, out of the remaining scrutiny assessments it is expected that 30% of assessment completed by the range head, 20% by DC/ACIT and 10% by ITO’s. The notification no. 6/2009 relied upon by the revenue is only for the guidance of departmental officers to devise the method and mechanism in order to commending good performance of Assessing Officer in the area of quality assessment, the same cannot be considered as the replacement to order u/s 120(4)(b) conferring jurisdiction with the Addl. CIT, Range-1, Raipur. This issue has been discussed in detail in the case of Jindal Power Ltd. Vs JCIT, Range-1, Bilaspur in & 202/RPR/2017, wherein while dealing with the similar contentions raised by the assessee and defendant by the revenue are dealt with at length and a view has been formed by this tribunal after considering various judicial pronouncements, deliberating upon all possible aspects, under the following observations:

We find that ITAT, "H" Bench, Mumbai in the case of Shri Kishore Vithaldas Vs, JCIT-17(2), Mumbai, ITA No,7397/Mum/2016 and dated 16.10.2019, had observed, that Jt. CIT/Addl. CIT cannot validly assume jurisdiction and pass an assessment order in absence of an order u/s. 120(4)(b) of the Act. Also, a similar view had been taken by the ITAT, Delhi in the case of Mega Corporation Ltd. vs. ACIT, [2015] 155 ITD 1019. Also, ITAT, Mumbai in the case of Tata Sons Ltd. Vs. ACIT, Circle-2(3), & 4542/Mum/2005 had, inter alia, held that Addl. Commissioner of Income Tax can perform functions and exercise powers of an Assessing Officer only if he is specially directed u/s. 120(4)(b) of the Act. For the sake of clarity, the observations of the Tribunal are culled out as under: "3.26. In addition to the above, it further noted by us that only that 'Joint Commissioner' was authorized to act as an Assessing Officer who was directed under clause (b) of sub- section 4 of section 120 to exercise or perform all or any of the powers and functions of an Assessing Officer as defined u/s 2(7A) of the Act. Now, if we refer to section 120, its perusal makes further clear that only CBOT can empower the Chief Commissioners or Commissioners for issuance of orders to the effect that powers and functions of an Assessing Officer for a particular assessee or classes of assessee shall be exercised by a 'Joint Commissioner'. Despite numerous directions, the Revenue was not able to bring before us any order wherein any specific authority was given by any Chief Commissioner or Commissioner authorizing the Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur impugned Additiona1 l62 Commissioner to pass impugned assessment order. We find force in the argument of Lc). Counsel that at the relevant time when the assessment proceedings were in progress, the word 'Additional Commissioner' was not available m the aforesaid section and therefore, it was not possible for the Chief Commissioner or the Commissioner to have authorized an Additional 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 of the Ld. C1T-DR. It is noted. that Notification No.335 is issued merely for assigning jurisdiction to various Commissioners and it is thus of no use to Revenue as far as issue before us is concerned. So far as Notification No.267/2001 is concerned, it reads as follows:— "In exercise of the powers conferred by clause (b) of sub- section (4) of section 120 of the income -tax Act,1961(43 of 1961), the Central Board of Direct Taxes, hereby directs that the Joint Commissioners of Income Tax or the Joint Directors of Income tax, shall exercise the powers and functions of the Assessing Officers, in respect of territorial area or persons or classes of persons or incomes or classes of income or cases, or classes of cases, in respect of which such Joint Commissioners of Income tax. are authorised by the Commissioner of Income tax, vide Government of India, Central Board of Direct Taxes notification number S.0.732(E) dated 31.07.2001, S.0.880(E) dated 14.09.2001, 8.0.881(E) dated 14.09.2001, S.O. 882(E) dated 14.09.2001 and S.O. 883(E) dated 14.09.2001 published in the Gazette of India, Part II, Section 3, subsection (ii), Extraordinary. (Emphasis supplied)"

Also, we find that a similar view had been arrived at by the ITAT, Lucknow in the case of Prachi Leather (P). Ltd. Vs. Addl. CIT, dated 08.12.2010, wherein, after drawing support from the judgment of the Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur Hon'ble High Court of Delhi in the case of Dr. Nalini Mahajan Vs. DCIT, (2002) 257 ITR 123 (Del.), it was held as under: "16.2 From the contents of the aforesaid provisions, it is quite clear that so far as Addl. Commissioner is concerned, firstly he has been included in the definition of "Assessing Officer" given under section 2(7A) of the Act With effect from 1.6.1994 as a result of retrospective amendment made by the Finance Act, 2007 but at the same time, it is also clear that the Addl. Commissioner will be Assessing Officer as envisaged in section 2(7A) so amended only if he is directed under clause (b)of sub-section (4) of section 120 to exercise or perform all or any of the powers and functions concerned on or assigned to an Assessing Officer; meaning thereby that the Addl. CIT can function or can exercise the powers and perform the functions of an Assessing Officer if he is empowered by the CBDT as required under clause (h) of sub-section (4) of section 120. .... 18.1 So 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) 122 taxman 897 wherein the Hon'ble High Court, while discussing the powers of Additional Director Investigation, held as under: "It is now well-settled that when a power is given to do a certain thing in a certain manner, the same must be done in that manner or not at all. A delegation of power is essentially a legislative function. Such a power of delegation must be provided by the statute. The director himself for certain matters is the delegating authority. He, unless the statute expressly states, cannot sub-delegate his power to any other authority. In any event, if an authority, which had no jurisdiction to issue such an authorization did so, the same would be liable to be quashed as ultra vires. Thus, unless and until an amendment is carried out, by reason of the redesignation itself, read with the provisions of the General Clauses Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur Act, the Addl. Director does not get any statutory power to issue authorization to issue a warrant. Therefore, the Addl. Director (Investigation) cannot be said to have any power to issue any authorization or warrant to Joint Director. Consequently, notification dt. 6th Sep. 1989 is not valid in law to the said extent. 18.2 So far as the present case is concerned, though we are concerned with the powers of Additional CIT but the proposition of law laid down by the Hon'ble High Court which was, though in relation to powers' of Additional Director (Investigation), is fully applicable to the present case. 18.3 In view of the aforesaid facts, circumstances and the discussion and following the law laid down by the Hon'ble Delhi High Court in the case of Dr. Nalini Mahajan (supra), first of all we are of the opinion that the Addl. CIT, Range-6, Kanpur having not been empowered to exercise or perform the powers or functions of an Assessing Officer, the assessment framed, by him was illegal and void ab initio. "

Further, we find that a similar view had been taken by the ITAT, Jodhpur in the case of City Garden Vs. ITO (2012) 21 taxmann.com 373, and ITAT, Lucknow in the case of Mircrofin Security (P) Ltd. Vs. Addl. CIT (2005) 3 SOT 302. Also, we find that the ITAT, Delhi in the case Shri Nasir Ali Vs. Addl. CIT, dated 25.09.2019, had observed that where the Addl. CIT had passed the assessment order, however, no order conferring concurrent jurisdiction to the Addl. CIT over the cases 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.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 Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur 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.3460/Mum/2011 and ITA No.8768/Mum/2010 dated 24.12.2019.

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."

Having given a thoughtful consideration to the aforesaid claim of the ld. DR we are unable to persuade ourselves to subscribe to the same. On a careful perusal of Section 124 of the Act, it transpires that the same deals with the issue of “territorial jurisdiction” of an Assessing Officer. Ostensibly, sub-section (1) of Section 124 contemplates vesting with the A.O jurisdiction over a specified area by virtue of any direction or order issued under sub-section (1) and sub-section (2) of Section 120 of the Act. On the other hand sub-section (2) of Section 124 contemplates the manner in which any controversy as regards the territorial jurisdiction of an A.O is to be resolved. Apropos, sub-section (3) of Section 124 of the Act, the same places Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur an embargo upon an assessee to call in question the jurisdiction of the A.O where he had initially not raised such objection within a period of one month from the date on which he was served with a notice under sub-section (1) of Section 142 or sub-section (2) of Section 143. In sum and substance, the obligation cast upon an assessee to call in question the jurisdiction of the A.O as per the mandate of sub- section (3) of Section 124 is confined to a case where the assessee objects to the assumption of territorial jurisdiction by the A.O, and not otherwise. Our aforesaid view is fortified by the judgment of the Hon’ble High Court 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. only in pursuance to the notice that was issued Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur by the ITO, Ward-3, who had no jurisdiction over the assessee at the relevant time. The Hon'ble High Court considering the fact that as the assessment was framed on the basis of the notice issued under Sec. 143(2) by the assessing officer who had no jurisdiction to issue the same at the relevant point of time quashed the assessment. Apart from that, the aforesaid view is also supported by the order of the ITAT, Kolkata ‘B’ Bench in the case of OSL Developers (p) Ltd. Vs. ITO, (2021) 211 TTJ (Kol) 621 and that of ITAT, Gauhati Bench in the case of Balaji Enterprise Vs. ACIT (2021) 187 ITD 111 (Gau.). Accordingly, on the basis of our aforesaid observations, we are of the view that as the assessee’s objection to the validity of the jurisdiction assumed by the Jt. CIT, Range-1, Bilaspur is not an objection to his territorial jurisdiction, but in fact an objection to the assumption of inherent jurisdiction by him in absence of an order u/s.120(4)(b) of the Act, therefore, the provisions of sub- section (3) of Section 124 would not assist the case of the revenue.

In fact, we find that the Hon'ble High Court of Bombay in the case of Bansilal B. Raisoni & Sons Vs. ACIT, Central Circle-1, Nashik & Anr, WP No.13391 of 2018 had, inter alia observed that the time limit for raising objection to the jurisdiction of the Assessing Officer prescribed under sub section (3) of Section 124 has a relation to the Assessing Officer's territorial jurisdiction. It was further observed that the time limit prescribed would not apply to a case where the assessee contends that the action of the Assessing Officer is without authority of law and, therefore, wholly without jurisdiction. Also, we find that the Hon'ble High Court of Bombay in the case of CIT-1, Nagpur Vs. Lalitkumar Bardia, (2017) 84 taxmann.com 213 (Bom) had addressed the contention of the department that Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur where the assessee had not objected to the jurisdiction within the time prescribed under sub-section (3) of Section 124 of the Act, then, having waived its said right, it was barred from raising the issue of jurisdiction after having participated in the assessment proceedings. The Hon'ble High Court had observed that the waiver can only be of one's right/privilege but non-exercise of the same will not bestow jurisdiction on a person who inherently 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 by the Hon'ble Apex Court that acquiescence of a party equally should not be permitted to defeat the legislative animation and the court cannot derive jurisdiction apart from the statute. For the sake of clarity, the observations Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur of the Hon'ble Apex Court in the case of Kanwar Singh Saini Vs. High Court of Delhi (supra) are culled out as under:

We, thus, are of the view that as the Jt. CIT, Range-1, Bilaspur in absence of any order passed by the specified authority u/s. 120(4)(b) of the Act had no jurisdiction to frame the assessment in the case of the assessee company before us, therefore, the calling into question of the same by the assessee company before us would not be hit by the prescribed time limit contemplated in Section 124(3) of the Act, which as observed by us hereinabove, is in context of the territorial jurisdiction of the A.O. Apart from that, as held by the Hon'ble Supreme Court in the case of Kanwar Singh Saini Vs. High Court of Delhi (supra), as the Jt. CIT, Range-1, Bilaspur in absence of any order in writing u/s. 120(4)(b) of the Act had wrongly assumed jurisdiction and framed the assessment vide his impugned order u/s. 143(3) of the Act dated 01.03.2013, therefore, the assessee company remained well within its right to Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur challenge the absence of his inherent jurisdiction to frame the impugned assessment in the course of the proceedings before us.

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.

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.

In the result, appeal filed by the assessee company in for A.Y.2010-11 is allowed in terms of our aforesaid observations.

The aforesaid view adopted by this tribunal is further fortified, in terms of the decision by coordinate bench of ITAT, Mumbai in the case ITO (IT) TDS-2 vs Tata Steel Ltd. (2024) 207 ITD 345 (Mumbai- Trib.) dated 07.06.2024, wherein the findings of Mumbai Tribunal, read as under:

From the careful perusal of various submissions, both orally and in writing, made by the learned DR, it is pertinent to note that the Revenue has made no submission with respect to the absence of necessary orders under section 127 of the Act transferring the jurisdiction from the DClT to the Addi. CIT as contemplated under section 127 of the Act. Thus, apart from objecting to the admission of additional ground no.B-3 and B-4 raised by the assessee, the Revenue has neither made any submission on its merit nor brought any order passed under section 127 of the Act on Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur record. Therefore, we are of the considered view that on both counts, i.e. absence of requisite orders authorising the Addi. CIT under section 120(4)(b) of the Act to act as an Assessing Officer as well as absence of requisite order under section 127 of the Act transferring the jurisdiction to the Addi. CIT, prejudice is caused to the assessee as the impugned final assessment order was passed without any jurisdiction.

The issue in dispute has already been decided in favour of the assessee by various decisions of the coordinate bench of the Tribunal as noted above. Therefore, in absence of separate orders passed under section 120(4)(b) authorising the Addi. CIT to perform the functions, and exercise the powers of an Assessing Officer under section 2(7A) and also in absence of an order transferring the jurisdiction under section I27 of the Act, the impugned final assessment order passed under section 143(3) read with section 144C(13) of the Act, in the case of the assessee, by the Addi. CIT for assessment year 2007-08 is without the jurisdiction and hence is set aside. As a result, the additional grounds of appeal, as mentioned in Part-B of the Exhibit- E of the aforesaid consolidated application dated 28/07/2023, filed by the assessee in its appeal for assessment year 2007-08 are allowed.

As the issue in present case, regarding assumption of jurisdiction by the Range head i.e., Addl. CIT, Range-1, Raipur to perform the functions, and exercise the powers of an Assessing Officer under section 2(7A) dehors an order u/s 120(4)(b) by the competent authority is held to be against the mandate of law, as decided in the case of Jindal Power Ltd. Vs JCIT (Supra). Having similar facts and circumstances in the present case, we are of the conviction that the issue in present case is squarely covered by the view adopted by this Tribunal in the case of Jindal Power Ltd. Vs JCIT (Supra), which the revenue was unable to distinguish by furnishing any contrary material, evidence or decision. Further, admittedly there was no Dolphin Promoters and Builders vs Addl. CIT, Range-1, Raipur order for transferring the jurisdiction u/s 127 of the Act issued in the present case, therefore, on that count also the impugned assessment cannot survive. Consequently, in absence of inherent jurisdiction with the Addl. CIT, Range- 1, Raipur, to exercise the duties of an Assessing Officer to frame the impugned assessment, the assessment framed u/s 144 of the Act, dated 03.02.2014 is liable to be quashed and we direct to do so.

As we have quashed the assessment for want of valid assumption of jurisdiction by the Ld. AO in the present case, in terms of our aforesaid observations, we, therefore, refrain from deliberating upon and dealing with the other contentions raised by the assessee either on legal count or qua the merits of the case, which, thus, are left open.