THE ACIT 2(3), MUMBAI vs. M/S. TATA SONS LTD, MUMBAI

O R D E R Per P K Bansal, Vice-President:

The appeal in & 3745/Mum/2006 are cross appeals filed against the order of the CIT(A) dated 31.03.2006, while the appeal in has been filed by the assessee against the order of CIT

2 Tata Sons Limited passed u/s. 263. The order u/s. 263 has been passed by the CIT in respect of the order passed by the Assessing Officer u/s. 154, dated 05.08.2005. The order u/s. 154 has been passed in respect of the assessment order completed u/s. 143(3) for the impugned assessment year on 15.03.2005, which is the impugned assessment order in & 3745/Mum/2006.

2. The assessee vide letter dated 17.11.2016 has raised additional ground of appeal, which read as under:

“1. On the facts and in the circumstances of the case, the assessment order dated 15.03.2005 passed by the Additional Commissioner of Income Tax under section 143(3) is bad in law, illegal and without jurisdiction and / or in excess of jurisdiction, on the grounds amongst others, that he failed to establish that he possessed legal and valid jurisdiction under the Act to pass the assessment order and consequently the Hon'ble Tribunal be pleased to quash the said order.

2. The Additional Commissioner of Income Tax lacked jurisdiction to pass the Order of Assessment u/s 143(3) dated 15.03.2005 and to exercise the powers of performing the functions of an Assessing Officer, without establishing that he possess such jurisdiction conferred on him under section 120(4)(b) of the Act. Accordingly, in the absence of an order u/s 120(4)(b) conferring jurisdiction on the Additional Commissioner of Income Tax, the assessment order dated 15.03.2005 passed by him needs to be quashed.

4. The proceedings having been initiated by the lower authority (viz. Asst. Commissioner of Income Tax), in the absence of an Order transferring jurisdiction u/s 127 to the Additional

3 Tata Sons Limited

Commissioner of Income Tax, the Order of Assessment passed by the higher authority (viz. Additional Commissioner of Income Tax) is without jurisdiction and needs to be quashed.

In the facts and circumstances of the case and in law, the appellant submits that the Order passed by the Ld. C.I.T. - 2, Mumbai dated 24th October, 2005 U/s.263 of the Act, pursuant to the Order of Assessment passed U/s. 143(3) of the Act dated 15th March, 2005 by the AO is to be quashed, keeping in view the fact and in the event that the said order of assessment is quashed as passed without authority of law by the Hon. Income Tax Appellate Tribunal. The additional ground raised by the assessee relates to the validity of the assessment on the basis of the jurisdiction of the Assessing Officer to pass the order u/s. 143(3) dated 15.03.2005. We, therefore, decided to dispose of the issue first relating to the admission of the additional ground.

3. The learned standing counsel for the department with regard to the admission of the additional ground argued in detail and ultimately made the following written synopsis, which read as under:

“3. Being aggrieved by the assessment order, the assessee M/s Tata Sons Limited filed an appeal before the Commissioner of Income-tax (Appeals). A look at the grounds of appeal would show that, the assessee did not challenge the jurisdiction of the 4 Tata Sons Limited

Assessing Officer for making the assessment. It challenged the assessment on merits.

4. The CIT(A) gave full hearing to the assessee and examined all the ground of appeal in depth. He passed a detailed appellate order dated 31st March 2006 running into 55 pages partly allowing the appeal of the assessee.

5. Aggrieved by the order of the CIT(A) both the Revenue and the assessee filed appeals before the Hon'ble ITAT. The appeal of the Revenue was dated 9th June 2006. The appeal of the assessee was dated 12th June 2006.

6. A look at the grounds of appeal would show that the assessee challenged the order of the CIT(A) only on merits. It did not challenge the jurisdiction of the Assessing Officer (Additional Commissioner) for making the assessment.

Additional Grounds 7. Thereafter, suddenly, after about ten and half years, on 17th November, 2016, in a casual manner, the assessee filed additional grounds seeking quashing of the assessment order passed by the Additional Commissioner, on the ground that the Additional Commissioner lacked jurisdiction to pass the assessment order. Extracts of the forwarding letter is reproduced below: "Delhi Bench of the Hon'ble Tribunal in the case of Mega Corporation Ltd. v. Additional CIT (ITA No.l02/Del/2014) decided on 21/9/2015 on the facts similar to the aforesaid Appeals of the Appellant has held the Assessment Order to be invalid and bad in law. This order of the Hon 'ble Tribunal has been recently reported and on the basis thereof, we propose to file the additional grounds of appeal challenging the validity of the Assessment Order passed en our case. Therefore, we hereby file the enclosed additional grounds of appeal in the Appeals referred to above and filed by us with a request that these grounds may please be adjudicated by the Hon'ble Tribunal. The additional grounds raised herein go to the very root of the matter and deal with the very jurisdiction and authority of the Assessing Officer to pass the Order. Therefore, these grounds can be admitted in the interests of 5 Tata Sons Limited substantial justice and especially when they are raised in a bona fide manner without indulging in delaying tactics. In this connection we wish to rely on the following decisions of the Hon'ble Apex Court and the Hon'ble Jurisdictional High Court............ " Subsequently, the additional grounds were reproduced. When the learned counsel for the assessee, at the outset, told that similar additional ground has been admitted and decided in favour of the assessee in assessee’s own case for A.Y. 2001-02 and in the case of Tata Communications Ltd. for A.Y. 2002- 03, the learned DR submitted that the decision of the Tribunal in the case of the assessee for A.Y. 2001-02 has not been accepted by the Revenue and the Revenue has filed appeal before the Hon’ble High court, copy of the questions of law and grounds of appeal filed before the High Court was submitted before us. It was also submitted that the said question of law and appeal before the High Court form part of the arguments of the Revenue in the present appeal being hearing by the Bench. Similarly, it was submitted that the arguments of the CIT-DR incorporated in the orders of the Tribunal in the case of the assessee for A.Y. 2001-02 and Tata Communications Ltd. for A.Y. 2002-03 will also have a bearing on the present appeal. He submitted that in the present appeal, there has been a delay in filing the additional ground.

The assessment order was passed on 15.03.2005, the CIT(A) passed the order on 31.03.2006. The assessee did not question the jurisdiction of the Assessing Officer before the CIT(A). The assessee filed appeal before the Tribunal on 12.06,2006, even at that time the ground relating to the 6 Tata Sons Limited jurisdiction was not taken up. The additional ground was filed before the Tribunal on 17.11.2016. There was a delay of ten and a half years and the assessee has to give a satisfactory explanation before the Tribunal. The delay can be divided into two parts – first part between 1.06.2006 to 21.09.2015, when the Delhi Bench of this Tribunal decided the case of Mega Corporation Ltd. The appeal could have been decided during this time.

Fortuitously, the appeal did not come up for hearing and assessee took advantage of the delay in disposal of appeal. This clearly shows that the assessee was all along satisfied that the Additional Commissioner was having valid jurisdiction to pass the assessment order. Our attention was drawn towards the order of the Tribunal in the case assessee’s own case for A.Y. 2001-02, especially para 3.17, where the Tribunal has referred to various decisions. It was submitted that these decisions were given much prior to the decision in the case of Mega Corporation Ltd. Yet the additional grounds were not filed by the assessee therefore, as far as the assessee was concerned, it had accepted the position that the Additional Commissioner had valid jurisdiction to make the assessment. The natural inference will be that the assessee and the Revenue understood that the appeal was to be decided only on merits. The position was settled therefore, the sudden change of situation was uncalled for after a long delay.

7 Tata Sons Limited

It was further pointed out that the additional grounds raised by the assessee were different from the ordinary additional grounds arising from the orders of the authorities below. This was a different ground altogether when the validity of the assessment order is being challenged on account of lack of jurisdiction of the Assessing Officer for the first time after twelve years and eight months of passing the assessment order. Before the Assessing Officer and the CIT(A), the assessee accepted the jurisdiction. The DR further stated that such a change of stand and long delay in filing the additional grounds needs to be satisfactorily explained else the additional grounds should be rejected at the threshold. In support of his contention, the learned DR citeed the commentaries from Black’s Law Dictionary – Estoppel by acquiescence :

8 Tata Sons Limited estoppels arising from a party’s failure to respond to a claim within a reasonable time after receiving notice of the claim, thereby giving rise to presumption of acceptance; Estoppel by laches: an equitable doctrine by which some courts deny relief to a claimant who has unreasonable delayed or been negligent in asserting a claim etc. In this regard, he also relied on the following decisions:

• State of Punjab vs. Bhatinda District Co-operative Milk Producers Union Ltd. (2007) 11 SCC 363 • State of Gujarat vs. Patel Raghav Natha and others AIR 1960 SCC 1297

• SantoshKumar Shivgonda patil & Ors vs. Balasaheb Tukaram Shevale & Anr. (2009) 9 SCC 352

• CIT vs. NHK Japan Broadcasting Corporation (2008) 305 ITR 137 (Del)

• CIT vs. Hutchison Telecom Ltd. (2010) 323 ITR 320 (Del)

Thus, it was submitted by the learned DR that if no time limit is prescribed for filing additional ground, it does not mean that it can be filed after any lapse of time in a reckless manner. Even when no time limit is provided for filing additional grounds, they should be filed within a reasonable time.

The normal period for filing an appeal before the Tribunal is 60 days from the receipt of the order of the CIT(A). The additional grounds should be filed within a reasonable time thereafter especially in a case like this, where it is not an ordinary ground of appeal arising from the orders of the authorities below but a ground challenging the validity of the jurisdiction

9 Tata Sons Limited of the assessment order, which was not raised before the lower authorities and such a ground seeks to unsettle a settled position. It was further submitted that this ground will have a bearing on other assessee’s also as the assessments for other years and other assessee would have been conducted on the validity of this assessment order as the validity of this assessment order as the jurisdiction was not questioned and if the entire order is quashed after such a long time without deciding the merits of the case, unusual heavy financial burden may be put on the Revenue to refund the taxes paid. It was further submitted that with the passage of time, evidences would have been lost as records would have been destroyed by weeding out or lost/misplaced with changes of jurisdiction or otherwise. Knowledge of the assessee about the position of law or facts, as the basis of the new claim here, is irrelevant. Ultimately, it was submitted that due to these reasons there should be finality of matters and the assessee should be barred from raising new issues after inordinate delay. It was further submitted that doctrine of laches should be invoked for unreasonable delay in asserting the claim and the additional ground should not be accepted. It was also submitted before us that the Tribunal should first adjudicate the issue regarding the delay in filing the additional ground. Apart from the delay, it was urged that simply on the basis of the decision of the Tribunal of a different Bench, the 10 Tata Sons Limited it would not be justified that the assessee should file additional grounds of appeal for quashing the assessment order in an abrupt manner.

5. It was further submitted that the additional ground of the assessee is raised on the basis of the decision of the Delhi Bench of the Tribunal in the case of Principal CIT vs. Mega Corporation Ltd., but the said decision

has been reversed by the Hon’ble Delhi High Court vide its order dated

23.02.2017 in ITA No. 128/2016. Since, the decision of the Tribunal in the case of Mega Corporation Ltd., on the basis of which the additional ground has been taken, no more survive, the additional ground should be rejected. Our attention was drawn towards the decision of Delhi High

Court in the case of Mega Corporation Ltd., and the question involved therein and on that basis it was contended that in that case the High held that the Additional Commissioner had valid jurisdiction and the assessment made by him was valid. In the said decision, reference was made to section 124(3)(a) and observed that this section enacts a statutory bar to raise the question of jurisdiction beyond the stipulated period of one month. It was further held that section 127 has no application and, the partiers were directed to appeal before the Tribunal for hearing on merits.

Thus, it was contended that the decision of Delhi High Court in the case of Mega Corporation Ltd is binding and, therefore, additional ground should not be entertained.

11 Tata Sons Limited

6. It was further submitted that the only pure questions of law can

be raised before the Tribunal for the first time as held by the Hon’ble

Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT

[1998] 229 ITR 383 (SC). The question of jurisdiction is not a pure question of law as it requires investigation into facts particularly in an old case like this. It was also submitted that the issue regarding the jurisdiction is not appealable before the Tribunal u/s. 253 of the Act.

Ultimately, it was contended that the assessee has submitted to the jurisdiction and participated in the proceedings therefore, he is debarred to take this issue by way of additional ground. Even from the additional ground, it is not clear at what time the Additional Commissioner was required to establish his jurisdiction. Referring to section 114(c) of the Evidence Act, it was contended that the presumption is that judicial and official acts have been regularly performed. Thus, it was contended that in case this Tribunal admits the additional ground, additional gorund should not be heard on merits and the issue should be sent back to the lower authorities for consideration as decided by the Hon’ble Delhi High court in the case of Mega Corporation Ltd. (supra).

contended that the additional ground raised herein go to the very root of the matter and the deal with the very jurisdiction and authority of the 12 Tata Sons Limited

Assessing Officer to pass the assessment order. Therefore, it was submitted that these grounds can be admitted in the interests of substantial justice especially when they are raised in a bona fide manner without indulging in delay tactics. Reliance was placed on the following decisions:

• Jute Corporation of India Ltd. vs. CIT [187 ITR 688 (SC)] • CIT vs. S. Nelliappan [66 ITR 722 (SC)] • Ahmedabad Electricity Co. Ltd. vs. CIT [199 ITR 351 (Bom)] • CIT vs. Pruthvi Brokers & Shareholders [349 ITR 336 (Bom)] • Ashok Vardhan Birla vs. CIT [208 ITR 958 (Bom)] • Inaroo vs. CIT [204 ITR 312 (Bom)] • CIT vs. Govindram Bros. P. Ltd. [141 ITR 626 (Bom)] The learned counsel for the assessee, in rebuttal of the submission of the leaned DR that the additional ground should not be admitted on account of delay, submitted that under section 253 of the Income tax Act, the limitation is provided only for the purpose of filing of appeal and additional grounds can be filed thereafter at any time. He placed his reliance on decision of Hon’ble Rajasthan High Court in the case of Shilpa Associates vs. ITO (263 ITR 317), Madad All vs. DCIT (272 ITR 560) and Zakir Hussain vs. CIT (202 CTR 40).

13 Tata Sons Limited Shivgonda patil & Ors vs. Balasaheb Tukaram Shevale & Anr., CIT vs. NHK Japan Broadcasting Corporation, CIT vs. Hutchison Telecom Ltd. (supra), the learned counsel for the assessee submitted that cases are not applicable to the facts of the present case. On the submission of the DR that the additional ground should not be admitted by the Tribunal at this stage in view of the decision of Hon’ble Delhi High court in the case of Mega Corporation Ltd. (supra), the senior counsel for the assessee pointed out that in this case the additional ground were not admitted in view of section 124(3), wherein objection to the jurisdiction of the Assessing Officer can be raised only within a time stipulated therein. Section 124 is relevant only to territorial jurisdiction and not where inherent jurisdiction is challenged. To support t his contention he relied on the Gujarat High Court decision in the case of CIT vs. Ramesh D.

Patel (362 ITR 492) wherein Court held that "the provisions of Section 124 clearly concern the territorial jurisdiction of the Assessing Officer and have no relevance to inherent jurisdiction for passing an Assessment Order." Further, the Delhi High Court has its own earlier decisions, also drawn a distinction between "territorial jurisdiction" and "inherent jurisdiction" in two cases viz.

CIT vs. S.S. Ahluwalia [2014] 88 CCH 158 and K.K. Loomba (241 ITR 152).

The Hon'ble Delhi High Court has concluded that Section 124 has relevance to "territorial jurisdiction" alone. He further submitted that view similar to the above is also reiterated by the Allahabad High Court in Prashant Chandra vs. CIT [2017] 81 taxmann.com 106, which forms part of the paper-book II and 14 Tata Sons Limited by the Calcutta High Court in Elite Pharmaceuticals vs. ITO (242 TAXMAN 345) (Flap No.6 of Paper Book II) wherein the proposition that Section 124 is confined only to "territorial jurisdiction" was highlighted. He further submitted that the Delhi Bench of the Tribunal has rejected the above Departmental submission in the case of Computer Engineering vs. ACIT (68 taxmann.com 426) (Flap No.6 of Paper Book II) and Lairy Distributors vs. DCIT (Flap No.7 of Paper Book II) having followed the above two Delhi High Court judgments.

9. In view of the above cases, the learned counsel for the assessee submitted that it is clear that a challenge to the "inherent jurisdiction" of the Additional CIT to pass an Assessment Order can be raised at any stage during the pendency of the Appeal before the Tribunal and that limitation contained in Section 124 is not relevant. The Hon'ble Supreme Court has held that challenge to the "inherent jurisdiction" can be raised at any belated stage of the proceedings including in appeal or execution in the following two cases: i) Kanwar Singh Saini vs. High Court of Delhi (2012) 4 SCC 307. ii) Kiran Singh v/s. Chaman - AIR 1954 S.C. 340 In any event, it is clear that majority of the decisions have taken a view which is contrary to the view taken by the Delhi High Court and, therefore, if there are two views, the view which is in favour of the assessee should be followed by applying the following binding judgments in the case of CIT vs.

15 Tata Sons Limited Vegetable Products Ltd. - 88 ITR 192 (SC); ITO vs. Siemens India Ltd. & Anr.

-156 ITR 11 (SC) and order of the Tribunal dated 13.07.2016 in the case of ACIT vs. Hindustan Thompson in for A.Y. 2010-11.

Without prejudice to the above, the leanred counsel for the assessee submitted that the Delhi High Court decision in the case of Mega Corporation Ltd. is per incurium because it has ignored two binding decisions of the Hon'ble Delhi High Court in the above cases of S.S. Ahluwalia and K.K.

Loomba and, therefore, the decision in the case of Mega in support of the above submission that a decision which is per incurium need not be followed:

( i) A.R. Antulay vs. R.S. Nayak - (1988) 2 SCC 602. (ii) UOI vs. S.K. Kapoor (2011) 4 SCC 589. (iii) UOI vs. Raghubir Singh (1989) 2 SCC 754. (iv) UOI vs. R.P. Singh (2014) 7 SCC 340. ( v) St. of Assam vs. Ripa Sarma (2013) 3 SCC 63. (vi) Official Liquidator vs. Dayanand (2008) 10 SCC 1. (vii) Siddharam Satlingapa Mhetre vs. St. of Maharashtra (2011) 1 SCC 694.

"It is a fundamental principle that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree, and such a defect cannot be cured even by consent of parties."

Similarly, in the second case of Rafique Bibi, the decision is delivered keeping in mind the aforesaid distinction based on "inherent jurisdiction."

17 Tata Sons Limited Further in the case of Deepak Agro Foods, similar view is taken in as much as in paragraph 15 it is held as follows:

"Where an authority making order lacks inherent jurisdiction, such order would be without jurisdiction, null, non est and void ab initio as defect of jurisdiction of an authority goes to the root of the matter and strikes at its very authority to pass any order and such a defect cannot be cured even by consent of the parties. (See: Kiran Singh & Ors. vs. Chaman Paswan & Ors.)."

Thus, he contended that none of the above three Supreme Court decisions supports the case of the Department. On the contrary, the decisions highlight the distinction between "inherent jurisdiction" on the one hand and "territorial or pecuniary jurisdiction" on the other and hold that the challenge to "inherent jurisdiction" can be raised at any stage of the proceedings.

Similarly, he contended that in the case of Bindal Apparels (supra), relied upon the above decision it has been noted that Section 2 (7A) of the Act has been amended with retrospective effect. It may be observed that this has been done upon concession of both the parties. There is no further discussion as regards the implications or the impact of the retrospective amendment.

In rebuttal, it is submitted that the decisions of the co-ordinate Bombay Benches in the cases of Tata Sons Limited and Tata Communications Limited have proceeded on the basis of such retrospective amendment of Section 2 (7A). In the case of Tata Sons Limited, the retrospective amendment has been noticed in paragraphs 3.24, 3.25 and 3.26. Similarly, in the case of Tata Communications Limited the retrospective amendment of Section 2 (7A) has 18 Tata Sons Limited been noticed on pages 8,14,16,18,19 to 23. Both the Benches have examined this amendment and its implications and impact and concluded that for the relevant assessment years, the Additional CIT could not pass an Assessment Order and perform the functions of an Assessing Officer in spite of the retrospective amendment.

Further, the learned counsel submitted that it is well settled that a decision of the Delhi High Court is not binding on Bombay Tribunal Benches and in this regard reliance is placed on the decisions of the jurisdictional Bombay High Court in the following three cases: a) CIT vs. Thana Electricity Supply Ltd. - 206 ITR 727 (Bom). b) Geoffrey Manners vs. CIT - 221 ITR 695 (Bom). c) Consolidated Pneumatic Tool vs. CIT - 209 ITR 277 (Bom).

Similar view has been taken by Chandigarh Bench of the Tribunal in the case of ACIT vs. Avon Cycles Ltd. (86 ITD 156) by applying the aforesaid decision of the Bombay High Court in the case of Thane Electricity Supply Ltd.

“3.12. We have examined this issue. It is well accepted position that the Tribunal is a final fact finding body. Requisite documents required for establishing legal authority of the Assessing Officer who had passed the assessment order are expected to be available in the assessment records. Thus, the legal issue raised by the assessee falls in the category of cases which can be decided on the basis of material held on record.

3.13. Further, it is noted by us that the aforesaid grounds are purely legal grounds and do not require any investigation of fresh facts and can be decided on the basis of records held on record. It has been held by the Hon’ble Supreme Court in the case of National Thermal Power Corporation 229 ITR 383 as well as in the other judgments as have been relied upon by the Ld. Counsel in its petition that assessee should be permitted to raise legal grounds at any stage, if they go to the root of the matter.

3.14. Revenue’s argument to reject the additional grounds due to acquiescence and participation of the assessee in assessment proceedings:

It was contended by the Ld. CIT-DR that during the course of assessment proceedings, assessee had made participation in the proceedings. Therefore, assessee cannot be allowed to challenge jurisdictional defect in the assessment order at this stage. We have considered this aspect very carefully. The assessee has challenged before us authority of the officer to pass the impugned assessment order. It is bounden duty of the Revenue to establish the authority and legal competence of its officer to pass the assessment order, as and when it is called upon to do so. No order can be sustained in the eyes of law if its author does not have requisite sanction of the law. If an order does not possess requisite strength in the eyes of law and is void ab-initio, then it will remain so even if there is acquiescence or participation by the assessee in the proceedings carried out by the AO to frame the assessment order. It is well settled law that consent of the assessee cannot confer jurisdiction to an assessing officer who lacked jurisdiction under the law.

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Similarly, vice versa is also true i.e. absence of consent of the assessee shall not take away jurisdiction from an Assessing Officer who actually possessed a valid jurisdiction in the eyes of law. Thus, legal competence of the officer who passed the assessment order as well as validity of the assessment order must be examined on the basis of factual analysis and provisions of law and not on the basis of conduct of the assessee. This issue is not res-integra. Immediate reference in this regard can be made on the judgment of Hon’ble Bombay High Court in the case of Inventors Industrial Corporation Limited Vs. CIT 19 4 ITR 548 (Bombay). Similar view was taken by Hon’ble Gujarat High Court in the case of P.V. Doshi Vs. CIT 113 ITR 22 (Guj) . Recently Hon’ble Delhi High Court handled a similar situation in the case of Valvoline Cummins Ltd 307 ITR 103 (Del) wherein challenge was made to the jurisdiction of Additional Commissioner of Income Tax who had passed the assessment order. It was contended on behalf of the Revenue that challenge of jurisdiction must be made within the stipulated time during the course of assessment proceedings in view of restrictions imposed by the provisions contained in section 124 of the Act. Hon’ble Delhi High Court in the aforesaid case held as under:-

“This is well settled that mere acquiescence in the exercise of powers by a person who does not have jurisdiction to exercise that power cannot work as an estoppel against him.” 3.15. It is further noted by us that in the case before us, a challenge has been made about the legal competence of the Additional Commissioner of Income tax and his jurisdiction to exercise the powers and perform the functions of the Assessing Officer of the assessee and to carry out the assessment proceedings and frame the assessment order in accordance with the provisions of the Income tax Act, 1961. TThus, reliance upon the provisions contained in Section 124 of the Act would be of no help to the Revenue as the assessee has not challenged either territorial jurisdiction or irregular exercise of jurisdiction by the Additional Commissioner of Income Tax but challenge was made to the authority and legal competence itself of the Additional Commissioner of Income tax to pass the impugned assessment order upon the assessee. Similar view has been taken by the Delhi Bench of ITAT in the case of Mega Corporation Ltd Vs. Additional CIT 155 ITD 1019 (Delhi) following the judgment of Hon’ble Delhi High Court in the case of Valvolines Cummins Ltd, supra.

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3.16 In view of the facts and circumstances, of this case and the judgments of Hon’ble Supreme Court and Hon’ble Bombay High Court relied upon by the Ld. Counsel in its petition as mentioned above, we find that these additional grounds deserve to be admitted and therefore, these are admitted for our adjudication.

22 Tata Sons Limited grounds raised by the assessee and will proceed to adjudicate the same at the very outset.” Both these decisions involve identical issue and, in our view, are equally applicable to the present case. The principle of judicial discipline demands that we should follow the order of the co-ordinate Bench. The learned Standing Counsel before us advanced lengthy and exhaustive arguments that this Tribunal should not admit the additional ground as the same has been raised by the assessee after the expiry of substantial time. In this regard he took around an hour and went on arguing the legal principle relating to the estoppels by laches and also that once the assessee has participated in the proceedings the assessee has no right to take or challenge the jurisdiction of the Assessing Officer by taking additional ground after the expiry of substantial period i.e. more than twelve years. We are surprised to see such type of arguments from the side of the Standing Counsel. The Standing Counsel must be aware that it is not a case where the Tribunal has to condone the delay for filing of the appeal. Condonation of delay is required in case the appeal is not filed within the permissible time. It is a case where the assessee has raised additional ground. It can be raised by the assessee at any time and even for the first time before the appellate authority. This is a settled law. Even the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd v. CIT (229 ITR 383) has held as under:

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“…The Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) is too narrow a view to take of the powers of the Tribunal.

Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason 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 Standing Counsel from the department expects this Tribunal that it should not follow the decision of the Supreme Court. The decision of Supreme Court is binding under Article 141 upon all judicial forums. We, therefore, dismiss this argument of the Standing Counsel.

24 Tata Sons Limited Communications Ltd. for A.Y. 2002-03. When the hearing continued from 10th Oct 2017 to 11th Oct 2017 and ultimately it was concluded on 12th Oct., 2017, the Standing Counsel tried to seek adjournment on the basis that Revenue has submitted application for referring the issue to the Special Bench. However, he did not submit before us any application being moved for constitution Special Bench. Subsequently when the hearing concluded, the Revenue filed an application, dated 20.10.2017, for constitution of Special Bench on 24.10.2017 in the case of the assessee for A.Y. 2002-03. In our view, the senior Standing Counsel tried that the case should not be disposed off and be kept in abeyance on one pretext or the other even though the arguments of the case has taken three days the Bench could not devote time to other cases. The Standing Counsel must be aware of that this Tribunal is bound by judicial discipline and until and unless there is contrary decision on the same issue of the Co-ordinate Bench, the decision of the Co-ordinate Bench is binding on us. It is not a case where this Tribunal is following the decision of Co-ordinate Bench. After the conclusion of the hearing, in our opinion the prayer for Special Bench made by the Revenue by application filed on 24.10.2017 does not have any leg to stand. Even this Bench does not have any direction from the Hon’ble President in this regard, to whom the application was moved by the Revenue. We noted that the argument taken by the learned Standing Counsel has already been dealt with by this Tribunal

25 Tata Sons Limited in the case of the assessee for A.Y. 2001-02 and in the case of Tata Communications Ltd for A.Y. 2002-03, which are binding on us.

Therefore the decision of Delhi Tribunal in the case of Mega Corporation Ltd. does not have any basis for the admission of the additional ground. In this regard, we may submit that the additional ground before the Tribunal is whether the Commissioner, who passed the impugned assessment order, had valid jurisdiction or not while making the application for the admission of the additional ground. No doubt there the assessee has relied on the decision of Delhi Bench in the case of Principal CIT vs. Mega Corporation, but relying on a particular decision does not mean that his additional ground be decided by us. We have gone through the decision of Delhi High Court in the case of Mega Corporation Ltd. (supra) and noted that various High Courts have taken a contrary view on this issue, as under:

• CIT vs. Ramesh D Patel [362 ITR 493] (Guj) • Prashant Chandra vs. CIT 81 taxmann.com 106 (Allahabad) • Elite Pharmaceuticals vs. ITO[242 Taxman 345] (Cal)

26 Tata Sons Limited Now it is not a case where similar issue has been decided only by Delhi High Court. Delhi High Court is not the jurisdictional High Court. When there is a contrary decision of the Jurisdictional High Court, the decision of Delhi High Court is not binding on us. In this regard we are bound to follow the decision of Hon’ble Bombay High Court in the case of Thane Electricity Supply Ltd (206 ITR 727), wherein the High Court has laid down the following principles for the precedents:

“The general principles with regard to precedents are: (a) The law declared by the Supreme Court being binding on all courts in India, the decisions of the Supreme Court are binding on all courts, except, however, the Supreme Court itself which is free to review the same and depart from its earlier opinion if the situation so warrants. What is binding is, of course, the ratio of the decision and not every expression found therein. (b) The decisions of the High Court are binding on the subordinate courts and authorities or Tribunals under its superintendence throughout the territories in relation to which it exercises jurisdiction. It does not extend beyond its territorial jurisdiction. (c) The position in regard to the binding nature of the decisions of a High Court on different Benches of the same court, may be summed up as follows: (i) A single judge of a High Court is bound by the decision of another single judge or a Division Bench of the same High Court. It would be judicial impropriety to ignore that decision. Judicial comity demands that a binding decision to which his attention had been drawn should neither be ignored nor overlooked. (ii) A Division Bench of a High Court should follow the decision of another Division Bench of equal strength or a Full Bench of the same High Court. If one Division Bench

27 Tata Sons Limited differs from another Division Bench of the same High Court, it should refer the case to a larger Bench. (iii) Where there are conflicting decisions of courts of co- ordinate jurisdiction, the later decision is to be preferred if reached after full consideration of the earlier decisions. (d) the decision of one High Court is neither binding precedent for another High Court nor for courts or Tribunals outside its territorial jurisdiction.” Thus, in this decision the Bombay High Court has categorically laid down the proposition of law that decision of one High Court is neither binding precedent for another High Court nor for courts or Tribunals outside its territorial jurisdiction. The decision of the Hon’ble Delhi High Court, as has been relied upon by the learned Standing Counsel is not binding on this Tribunal and the Tribunal is not bound to refer the issue involved in this appeal for constitution of the Special Bench.

28 Tata Sons Limited under section 132 was issued or requisition under section 132A of the Act was made. Similarly Hon’ble Allahabad High Court in the case of Prasad Chandra vs. CIT (supra) in para no.22 has categorically held as under:

“22. As regards the question of determining the jurisdiction, we may point out that in Moti and Jawahar (supra), which has been relied upon by the petitioner, the court observed that a point which goes to the root of the mater and which affects the very existence of the jurisdiction of an authority can be raised at any time, be it in appeal or revision.” Further, we also noted that the while dealing with similar issue, the Hon’ble Calcutta High Court in the case of Elite Pharmaceuticals vs. ITO (supra), under para 15 held as under:

“15. The assessee had questioned the territorial jurisdiction of the assessing officer and the assessing officer held that the assessee had lost the right to raise the objection by efflux of time. We, as such, find no substance in the case of the appellant.”

3.20 We have gone through all the facts and circumstances of the case. It is noted by us that for, the assessment year, after the return was filed by the assessee, a notice was issued by the ACIT Cir 2(3), Mumbai, dated 5th September 2001, intimating the assessee about change in jurisdiction and claiming that jurisdictional was with the said officer. The relevant part of the said notice is reproduced hereunder:

"Sub: Change in jurisdiction-Intimation regarding In terms of Notification No. SO No. 732(E) dated 31.7.2001 of Central Board of Direct Taxes and consequential Notification dated 7.8.2001 of CIT. MC-II, Mumbai.,

30 Tata Sons Limited jurisdiction over your case with effect from 1.8.2001 vests with the undersigned. All IT./W.T. and Interest tax Returns and necessary correspondence on that account are therefore required to be filed with the undersigned. All payments towards Income-tax (by way of Advance tax, Regular tax or S.A. tax), Interest tax, Wcalth tax and payment u/s. 115-0 of the I.T. Act are also to be made w.e.f. 1.8.2001 to the credit of the ACTT Circle 2(3), Mumbai.

Your’sFaithfully