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

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “D”, MUMBAI

Before Shri P K Bansal, Vice President & Shri Ram Lal Negi, Judicial Member ITA Nos. 193 & 3745/Mum/2006 Assessment Year : 2002-03 Tata Sons Limited, ACIT Circle 2(3), Bombay House, Homi Mody Mumbai. Vs. Street, Mumbai 400 001

PAN AAACT4060A (Appellant) (Respondent)

ITA No. 3658/Mum/2006 Assessment Year : 2002-03 ACIT Circle 2(3), Tata Sons Limited, Mumbai. Mumbai 400 001 Vs. PAN AAACT4060A (Appellant) (Respondent)

For the assessee : Shri Dinesh Vyas For the Revenue : Shri P C Chhotaray

Date of Hearing : 12.10.2017 Date of Pronouncement : 27.11.2017

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

The appeal in ITA Nos. 3658 & 3745/Mum/2006 are cross appeals filed

against the order of the CIT(A) dated 31.03.2006, while the appeal in ITA No.

193/Mum/2006 has been filed by the assessee against the order of CIT

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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 ITA No. 3658 & 3745/Mum/2006.

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.

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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.

supplementary grounds of appeal:

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.

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

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

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

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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

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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.

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decision in the case of Mega Corporation Ltd., was rendered by the Delhi

Bench of the Tribunal, and the date of filing the additional ground of appeal

i.e. 17.11.2016. Thus, it was contended that there was no justification for

this delay. The same group represented by the same counsel had filed same

additional grounds in the case of the assessee for A.Y. 2001-02 and in the

case of Tata Communication Ltd. for A.Y. 2002-03 on 15.01.2016 and

29.12.2015 respectively. Once the assessee has agitated similar issue on

29.12.2015, there was no reason to file the additional ground in the

impugned case on 17.11.2016. Thus, the delay of about eleven months in

filing the additional grounds has not been explained even when pointed out.

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 :

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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

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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

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it would not be justified that the assessee should file additional grounds of

appeal for quashing the assessment order in an abrupt manner.

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.

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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

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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).

of State of Punjab vs. Bhatinda District Co-operative Milk Producers Union

Ltd. State of Gujarat vs. Patel Raghav Natha and others, Santosh Kumar

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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

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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.

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.

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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 ITA No.6729/MUM/2014 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.

Allahabad High Court decision in the case of CIT vs. British India (337 ITR

64) and contended that a plea of want of jurisdiction could not be raised

beyond time stipulated in Section 124. In rebuttal of the DR’s reliance on the

decision of the Allahabad High Court in the case of CIT vs. British India

(supra), the learned counsel for the assessee submitted that this case is not

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applicable because it is confined to challenge the "territorial jurisdiction" and

not "inherent jurisdiction". Further, as noted in this very judgment, applying

the Supreme Court judgment in the case of Kiran Singh (AIR 1954 SC 340) it

is clear that where there is a challenge to the "inherent jurisdiction", the

concept of "prejudice" is not relevant.

the case of Kiran Singh vs. Chaman Paswan (A.I.R. 1954 S.C. 340), Rafique

Bibi vs. Sayed Waliuddin [(2004) 1 Supreme Court Cases 287] and Deepak

Agro Foods vs. State of Rajasthan, the learned counsel for the assessee

submitted that none of the above Supreme Court decisions supports the case

of the Department. In fact, the first decision in the case of Kiran Singh

notices the fundamental distinction between "territorial jurisdiction" on the

one hand and "subject matter or inherent jurisdiction" on the other hand. In

paragraph 6 of its judgment, the Apex Court has observed as follows:

"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."

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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

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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.

additional ground. The only issue raised in the additional ground taken by

the assessee relates to the validity of the jurisdiction of the Additional

Commissioner of Income tax, who has passed the impugned assessment

order, has the authority of law to act as a Assessing Officer and to pass the

impugned assessment order. We have examined this issue. We noted that

similar additional ground was raised before this Tribunal in the case of the

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assessee for AY 2001-02 and ‘D’ Bench of this Tribunal in ITA No. 4497 &

4542/Mum/2005, vide its order dated 31.10.2016admitted the additional

ground by holding as under:

“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.

Tribunal in the case of Tata Communication Ltd. in ITA No. 6981 &

7071/Mum/2005 for A.Y. 2002-03 and the Tribunal vide its order dated

30.06.2017, while dealing with this issue held as under :

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.

should not decide the issue as the Revenue has gone in appeal before the

High Court. He also submitted before us copy of the questions of law and the

grounds of appeal filed before the High Court. But when we asked whether

the appeal filed by the Revenue has been admitted or not, he did not say that

it has been admitted rather, contended that since the appeal has been filed

before the High Court, this Tribunal should not admit the additional ground

and decide the said issue. On our questioning he further explained that the

High Court has not stayed the operation of the impugned order of this

Tribunal in the case of the assessee for A.Y. 2001-02 and in the case of Tata

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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

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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.

the assessee with that of the decision of the Delhi Bench of this Tribunal in

the case of Mega Corporation Ltd. (supra). But the said decision has been

reversed by the Hon’ble Delhi High Court vide its order dated 23.02.2017.

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)

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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

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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.

Patel (supra), while dealing with a similar issue, we noted that at page 496

under last but one paragraph held as under:

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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.”

learned Standing Counsel for the department, in the case of Mega

Corporation Ltd. (supra), has taken a contrary view but that decision does not

have a binding precedent on us. This is the settled law, in view of the

decision of Hon’ble Supreme Court in the case of CIT vs. Vegetable Product

Ltd., (88 ITR 192), if a court find that the language of a taxing provision is

ambiguous or capable of more meanings than one, then the court has to

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adopt that interpretation which favours the assessee, more particularly so

where the provision relates to the imposition of a penalty.”

validity of the assessment made as the Additional CIT, who passed the

assessment order was not having the inherent jurisdiction, we therefore,

proceeded to take this ground first. Both the parties have elaborately and

exhaustively argued on this issue and have also made written submissions

before us. We have carefully considered the submissions cited before us

during the course of hearing. The specific issue before us, which merits our

consideration is whether the Additional Commissioner of Income-tax Circle

2(3), Mumbai, who passed the assessment order in the case of the assessee,

has competence and jurisdiction to pass the assessment order. We noted

that similar issue has arisen in the assessee’s own case for A.Y. 2001-02 in

ITA 4497 & 4542/Mum/2005 and the ‘D’ Bench of this Tribunal vide its order

dated 31.10.2016, while dealing with the issue has held as under:

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.,

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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

Sd/-

(Jagadish Prasad Jangid) ACIT Cir. 2(3), Mumbai.

3.21 Thus, from the above, it is clear that initially the jurisdiction was with ACIT Cir. 2(3), Mumbai, for passing the assessment order. Subsequently, a notice u/s 143(2) was issued by DCIT Cir. 2(3) dated 1.12.2003 who was indeed successor to the first officer. Subsequently, assessee received a dated 10th December, 2004 from the Additional CIT range 2(3) Mumbai. Apparently, Commissioner of Income Tax was not successor of ACIT/DCIT who had issued earlier notice. But, the assessee has contended that there is nothing on record to show as to how the Additional Commissioner of Income Tax became AO of the assessee and passed the impugned assessment order. 3.22. Thus, the first issue raised by the assessee before us is that in this case assessment proceedings were initiated by the Assistant

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Commissioner of Income Tax but were taken over in the middle of the proceedings by the Additional Commissioner of Income Tax and completed by him without there being any valid transfer of jurisdiction from the Assistant Commissioner of Income Tax to the Additional Commissioner of Income tax, as required under section 127 of the Income Tax Act. In this regard, Ld. CIT-DR was of the view that the Additional Commissioner of Income tax and Assistant Commissioner of Income tax have concurrent jurisdiction over the assessee. In our view, contention of Ld. CIT-DR is not valid as it is not based upon correct appreciation of the law. It appears that Revenue has misunderstood and miss-applied the very concept of 'concurrent jurisdiction1 and has ignored the distinction between the 'concurrent jurisdiction' and 'joint jurisdiction'. When we talk about assignment of 'concurrent jurisdiction1 to two officers of different hierarchy, it does not mean that both the officers can simultaneously or jointly work upon the assessment proceedings of same assessee. But it means that both the officers are legally eligible for assignment of jurisdiction of the assessment proceedings of a_ assessee and, therefore, any one of these officers can be assigned the jurisdiction by the higher authority. But, exercise of the jurisdiction between both the officers shall always be mutually exclusive to each other. If the jurisdiction has been assigned to one of the officers, it shall not be exercised by the other, and if the jurisdiction is taken away from the former officer and assigned to the latter, then it shall be exercised by the latter only and not by the former. Thus, the jurisdiction can be exercised by only one Assessing Officer at any given point of tune who has been duly assigned the jurisdiction by the competent authority. The assignment of jurisdiction to an officer and its transfer from one officer to the other can be made only through the prescribed process of law. Section 127 of the Act contains provisions regarding process to be followed by the Revenue Officers and their powers for transfer of cases from one Assessing Officer to the other. Section 127(1) inter-alia provides and mandates that the Commissioner may after recording his reasons for doing so, transfer any case from one Assessing Officer subordinate to him to any other Assessing Officer (whether with or without concurrent jurisdiction) also

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subordinate to him. Thus, mandatory requirement of the law in this regard is that an order In writing must be passed by the jurisdictional Commissioner of Income tax for effecting transfer of assessment proceedings from one Assessing Officer to the other. Law in this regard was explained in detail by Hon'ble Delhi High Court in the case of Vaholines Cummins Ltd. (supra). Similar view was taken by the Delhi bench of the Tribunal in the case of Mega Corpn. Ltd. (supra) following the aforesaid judgment of the Delhi High Court. Relevant part of order is reproduced below for the sake of ready reference:— "......9. Another contention specifically raised is that there is no transfer order u/s 127 of the Act from transferring the case from the DCIT to the Addl. CIT, Range 6, and New Delhi. The learned CIT(A) has held that hi the cases of transfer of cases to another AO after issue of notice u/s 143(2) of the Act by another AO, the issue involves the interpretation of concurrent jurisdiction which is beyond the scope of this appeal within the restricted directions of the Hon'ble IT AT. He has held that, "in my considered opinion, since both Addl. CIT Range-6 and DCIT Circle-6(l) works as subordinate officer to the same CIT and the CIT having entire territorial jurisdiction, the passing of assessment order by the Addl. CIT after issue of notice u/s 143(2) by the DCIT Circle 6(1) does not affect the taxability of the appellant or appellant is not adversely affected by the order." The Hon'ble Delhi High Court in the above context in the case of Valvoline Cummins Ltd. (supra) has held as under: "28. On the issue of 'concurrent' jurisdiction between the Additional Commissioner and the Deputy Commissioner, learned counsel for the assessee relied upon a decision of the Calcutta High Court in Berger Paints India Ltd v. Asstt. CIT [20001 246 ITR 133. The Calcutta High Court had explained the meaning of the expression 'concurrent1 to mean two authorities having equal powers to deal with a

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situation -but the same work cannot be divided between them. This is what the Calcutta High Court had to say:- ". . . Concurrent jurisdiction means a subordinate authority can deal with the matter equally with any superior authority in its entirety so that either one of such jurisdictions can be invoked. It cannot be construed as concurrent jurisdiction when one part of the assessment will be dealt with by one superior officer and the other part will be dealt with by one subordinate officer...." ............ It appears to us quite clearly that there is a distinction between concurrent exercise of power and joint exercise of power. When power has been conferred upon two authorities concurrently, either one of them can exercise that power and once a decision is taken to exercise the power by any one of those authorities, that exercise must be terminated by that authority only. It is not that one authority can start exercising a power and the other authority having concurrent jurisdiction can conclude the exercise of that power. This perhaps may be permissible in a situation where both the authorities jointly exercise power but it certainly is not permissible where both the authorities concurrently exercise power. One example that immediately comes to the mind is that of grant of anticipatory bail. Both the Sessions Judge and the High Court have concurrent power. It is not as if a part of that power can be exercised by the High Court and the balance power can be exercised by the Sessions Judge. If the High Court is seized of an application for anticipatory bail it must deal with it and similarly if the Sessions Judge is seized of an anticipatory bail, he must deal with it. There can be no joint exercise of power both by the High Court as well as by the Sessions Judge in respect of the same application for anticipatory bail. 30. In the facts of the present case, since the Additional Commissioner had exercised the power of an Assessing Officer, he was required to continue to exercise that power

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till his jurisdiction in the matter was over. His jurisdiction in the matter was not over merely on the passing of the assessment order but it continued in terms of section 220(6) of the Act in dealing with the petition for stay. What has happened in the present case is that after having passed the assessment order, the Additional Commissioner seems to have washed his hands of the matter and left it to the Deputy Commissioner to decide the stay petition filed under section 220(6) of the Act. We are of the opinion that this was not permissible in law." 9.1 We therefore hold that applying the above judicial position that assessment has to be completed by the authority who has initiated the proceedings for making assessment-and any other authority can take over the proceedings only after a proper order of transfer u/s 127(1) or 127(2) of the proceedings. The revenue has not brought any order for transfer of the proceedings from DCIT, Circle- 6(l), New Delhi to the Additional CIT, Range- 6, New Delhi and therefore it is quite evident that the Additional CIT, Range-6 took over the assessment proceedings without there being an order u/s 127(1). In the case ofPrachi Leathers Pvt. Ltd. (supra), it has been held as under: 19. We are further of the opinion that the notice under section 143(2) of the Act having been issued by the Income-tax Officer, Range 6(2), Kanpur on 16.8.2002, it was Income-tax Officer alone who could frame the assessment subject however to the fact that that the assessment could be framed by any other officer also provided there was an order of transfer of jurisdiction over assessee's case from Income-tax Officer, Range-6(2), Kanpur to that officer under section 127(4) of the Act, but so far as present case is concerned, the Revenue has not brought to our notice any order under section 127 passed after 6.8.2002 transferring jurisdiction over the assessee's case from the Income-tax Officer, Range 6(2), Kanpur to the Addl. CIT, Range-6,Kanpur and therefore, the

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assessment framed by the Addl.CIT, Range-6,Kanpur irrespective of the fact as to whether he was authorized to perform the functions of an AO or hot, is illegal and void ab initio for want of jurisdiction. Consequently, we are of the opinion that the assessment order hi the present case dated 31.3.2003 passed by the Addl.CIT, Range (6), Kanpur was illegal and void ab initio for want of jurisdiction. Consequently, the assessment order is quashed." 9.2 Consequently on this count also, the assessment made on 29.12.2008 by the Additional Commissioner is illegal and bad in law for want of jurisdiction. 10. for the reasons aforesaid we hold that the order of assessment dated 29.12.2008 was without jurisdiction and therefore is quashed as such, hi result, ground Nos. 1 and 2 are allowed." 3.23. In the case before us, the facts are identical. It is noted that Ld. CIT-DR as well as the Assessing Officer (present incumbent) who was personally present during the course of hearing before us, jointly stated that no such order (as prescribed under section 127(1) required to be passed by the jurisdictional Commissioner of Income tax) is available in the records. Thus, it is clear that there was no valid transfer of jurisdiction to the Additional Commissioner of Income Tax who had passed the impugned assessment order. Thus, impugned assessment order had been passed without assuming jurisdiction as per law.

3.24. Next issue raised by the Ld. Senior Counsel was that the Additional Commissioner who had passed the impugned assessment order was not authorized to act as assessing officer of the assessee and pass the impugned assessment order. We analyzed the provisions of law in this regard and find that section 2(7A) defines the term of Assessing Officer as under:

"Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or subsection (2) of section 120 or any other provision of this Act, and the Joint Commissioner

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or Joint Director who is directed under clause (6) 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."

3.25. Subsequently, the word 'Additional Commissioner' was also added in the said definition by Finance Act, 2007, with retrospective effect from day 01.06.1994. Thus, from the above, it is clear that when the impugned assessment order was passed, definition of the word 'Assessing Officer1 did not include 'Additional Commissioner of Income Tax'. It is further noted that section 2(28C) defines Joint Commissioner. Section 2(28C) was available on statute since 01.10.1998 and provide as under:

"2(28C) Joint Commissioner means a person appointed to be a Joint Commissioner of Income Tax or an Additional Commissioner of Income Tax under sub-section (1) of section 117."

On the other hand, section 2(1C) defines 'Additional Commissioner' as under:

"Additional Commissioner means a person as appointed to be an Additional Commissioner of Income Tax under sub- section (1) of section 117."

Thus, combined reading of all the above sections makes it clear that prior to amendment made by Finance Act, 2007, the legislature treated 'Additional Commissioner' and 'Joint Commissioner' differently for the purposes of performing the role as an Assessing Officer, despite the fact that for all the other purposes 'Joint Commissioner' meant 'Additional Commissioner' as well, as per section 2(28C). It is clear from the facts that by way of subsequent amendment by Finance Act, 2007, words 'Additional Commissioner' have also been inserted along with words 'Joint Commissioner' in section 2(7A) which defines the term for 'Assessment Officer' . In case, the legislature would have intended and meant that for the purpose of acting as Assessing Officer, 'Joint Commissioner' and 'Additional Commissioner' means one and the same, then there was no need to come out with an amendment made by Finance Act, 2007, wherein the word 'Additional Commissioner' was also inserted

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in the definition of 'Assessing Officer' as contained in section 2(7A). Thus, it is clear as per the plain reading of the statute that when the assessment order was passed, the 'Additional Commissioner1 was not authorized to act as Assessing Officer. 3.26. In addition to the above, it further noted by us that only that 'Joint Commissioner1 was authorized to act as an Assessing Officer who was directed under clause (6) 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 CBDT 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 impugned Additional Commissioner to pass impugned assessment order. We find force in the argument of Ld. Counsel that at the relevant time when the assessment proceedings were in progress, the word 'Additional Commissioner' was not available in 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 ".lasses 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 17-9-2001, Notification No.228/2001 dated 31.7.2001 and Notification No.335/2001 dated 29-10-2001 with a view to argue that the jurisdiction was assigned to all the officers including 'Additional

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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. CIT-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.O.732(E) dated 31.07.2001, • S.O.880(E) dated 14.09.2001, S.O.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, sub- section (if), Extraordinary. (Emphasis supplied) 3.29. Perusal of the aforesaid notification reveals that only those Joint Commissioners shall exercise the powers and functions of the Assessing Officers who have been authorized by the concerned Commissioners of Income tax in pursuance to the relevant notification conferring requisite powers to the concerned Commissioners. 3.30. Similarly notification No.228/2001, supra authorize the Commissioners of Income tax to issue orders for authorizing in turn,

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the Joint Commissioner of Income tax who are subordinate to them for exercising of the powers and performance of the functions of the Assessing Officers. It also, inter alia, authorizes the Joint Commissioners who were so authorized by the Commissioners, to issue orders in writing to the Officers who are subordinate to them for the exercise of the powers and performance of the functions of the Assessing Officers for specified assessee or class of assessee. Relevant part of the said notification is reproduced as under for the sake of ready reference:— "......(c) authorise the Commissioner of Income Tax referred to in this notification to issue the orders in writing for the exercise of the powers and performance of the functions of the Joint Commissioners of Income tax, who are subordinate to them, in respect of such cases or classes of cases specified in the corresponding entries in column (6) of the Schedule-I and Schedule -II of such persons or classes of persons specified in the corresponding entries in column (5) of the said Schedules, in such territorial areas specified hi the corresponding entries in column (4) of the said Schedules, and hi respect all of incomes or classes of income; (d) authorises the Joint Commissioner of Income Tax referred to in clause (c) of this notification, t 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 specified 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 under clause (c) of this notification............" 3.31. Thus, in view of the aforesaid notification it becomes imperative on the part of the Revenue to show us that in the case before us, the Additional Commissioner of Income tax, who had passed the impugned assessment order, was duly authorized by the jurisdictional Commissioner to do so. It is noted that any such order

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would not be available with the Revenue, because even in the notifications discussed above only 'Joint Commissioners' were authorized to perform the role of the Assessing Officers. However, the Revenue is not able to bring before us any order of the Commissioner authorizing even the 'Joint Commissioner' to perform powers and functions of Assessing Officer of the assessee. As per the discussion made by us in detail in the earlier part of our order, it is clear that no such order is available in the assessment record or in any other record. Legal consequences of the same have been elaborately analysed in many judgments by various courts. 3.32. Identical issue came up for consideration before Delhi Bench of Income Tax Appellate Tribunal :' the case of Mega Corpn. Ltd. (supra). The bench discussed entire law available on this issue and helcr that an 'Additional Commissioner of Income Tax' cannot ipso facto exercise the powers or perform the function of an Assessing Officer under the Act. He can perform the functions and exercise the powers of an Assessing Officer only if he is specifically directed under section 120(4)(6) of the Act to do so. Relevant part of the observations of the bench is reproduced hereunder for the sake of ready reference:— '........... We have considered the arguments advanced by the parties and perused the order of the learned CIT(A), comments of the Assessing Officer and material placed on record. The controversy raised in this appeal relates to the validity of order of assessment dated 29.12.2008 passed by Additional CIT, Range 6, New Delhi. According to the appellant/assessee, it is incumbent under the scheme of statute to vest the Additional CIT u/s 120(4)(6) of the Act to exercise or perform all or any of the powers and functions of Assessing Officer under the Act. 5.1 To examine the above contention, we consider it appropriate to firstly extract section 2(7A) of the Act which reads as under: "2(7A) Assessing Officers

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(7A) "Assessing Officer" means the Assistant Commissioner or 2Deputy Commissioner 3 or Assistant Director4 or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (l)or sub-section (2) of Section 120 or any other provision of this Act, and the 6[Additional or]6'[Additional or]7 5 Commissioner Director 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;" 5.2 A plain reading of the aforesaid provision would show that it is in two parts. The first part provides that Assessing Officer means the "Assistant Commissioner" or "Deputy Commissioner" or "Assistant Director" or "Deputy Director" or "Income Tax Officer" who is vested with the relevant jurisdiction by virtue of directions or orders issued under section 120(1) or 120(2) or any other provision of this Act. The second part provides that Assessing Officer means the "Additional Commissioner" or "Additional Director" or "Joint Commissioner" or "Joint Director" who is directed under section 120(4)(b) of the Act to exercise or perform all or any of the powers and functions conferred on or assigned to an Assessing Officer under this Act. In other words, it is manifest that Assessing Officer inter-alia means Additional Commissioner who is directed under section 120(4)(b) of the Act to exercise or perform all or any of the powers and functions conferred on or assigned to an Assessing Officer under the Act. In other words, an Additional Commissioner can only be directed u/s 120(4)(b) of the Act to "Assistant Commissioner" or "Deputy Commissioner" or "Assistant Director" or "deputy Director" or Income Tax Officer" under the Act. This interpretation also derives strength from the provisions contained in section 120(4)(&) of the Act which reads as under:

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"120. Jurisdiction of income-tax authorities (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,- (b) empower the Director General or Chief 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 there under to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or a Joint Director, by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply." 5.3 It will be seen that the said provision provides that Board may by general or special order and subject to such conditions, restrictions or limitations as may be specified therein empower the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on or as the case may be, assigned to, 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, reference in any other provision of this Act or hi any rule made there under to the Assessing

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Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or a Joint Director by whom, the powers and functions are to be exercised or performed under such order and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply. 5.4 The position which emerges thus is that an Additional Commissioner of Income Tax ipso facto cannot exercise the powers or perform the functions of an Assessing Officer under the Act. He can perform the functions and, exercise the powers of an Assessing Officer only if he is specifically directed under section 120(4)(6) of the Act. 3.33. Similar issue has been decided by the Lucknow bench of ITAT in the case of Prachi Leather (P.) Ltd v. AM. CIT [IT Appeal No. 26(L) of 2010, dated 8.12.2010] relying upon its earlier order in ITA No.744/2004/Lucknow for assessment year 2001-02 decided this issue on the similar lines after considering and following the decision of Hon'ble Delhi High Court in the case of Dr. Nalini Mahajan (supra). It is also noted that this decision has also been considered by Delhi Bench in the case of Mega Corporations Ltd, supra and relevant portion of the order as discussed therein is reproduced below:— "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 Add) Commissioner will be Assessing Officer as envisaged in section 2(7A) so amended only if he directed under clause (6)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

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he is empowered by the CBDT as required under clause (6) 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)(6) 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 duty 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 hin 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 [20011 252 ITR 123/r20021122 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 hi 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,

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unless and until an amendment is carried out, by reason of the redesignation itself, read with the provisions of the General Clauses Act, the Addl. Director does not get any statutory power to issue authorization to issue 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......." 3.34. It is further noted that similar view has been expressed by Jodhpur Bench of ITA in the case City Garden v, ITO [20121 21 taxmann.com 373/51 SOT 195 (URG) wherein it has been held that in the absence of a specific order issued in pursuance to Section 120(4)(6) specifically authorizing Joint Commissioner of Income Tax to exercise the powers and perform the function as conferred on or assigned to an Assessing Officer by or under the Act or a notification under section 120 of the Act, he is not competent to act as an Assessing Officer and pass an assessment order. 3.35. Similar view has been taken by Lucknow Bench of IT AT in the case of Microfin Security (P.) Ltd. v. Addl. CIT [2005] 3 SOT 302 wherein it was held that in absence of any allocation being made in favour of Additional Commissioner to make an assessment,

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he cannot assume for himself such an authority so as to pass an assessment order. 3.36. Similar view has been taken recently in another judgment by the Delhi bench of the IT AT in the case of Harvinder Singh Jaggi v. Asstt. CIT [2016] 157 ITD 869/67 taxmann.com 109. Relevant part of observations of the Bench is reproduced below:— ".......As regard the contention of the assessee that no order under section 127 was passed by the Commissioner of Income-tax, the revenue has submitted that the Addl. Commissioner of Income Tax was provided concurrent jurisdiction over the cases through the order of the Commissioner of Income tax and, therefore, no separate order under section 127 was required to be passed by the Commissioner of Income tax. However, no such order of the Commissioner of income tax conferring the concurrent jurisdiction to the Addl. Commissioner of Income Tax over the cases of the Income tax officer is either available on assessment record, or was produced by the revenue. Thus, in absence of any such order, it can't be established that said assessment order passed was within the jurisdiction of the Addl. Commissioner of Income Tax. Thus, the assessment completed, by Additional Commissioner of Income Tax in the case being without jurisdiction, is void ab initio. Accordingly, the ground of appeal of the assessee is allowed." 3.37. In the case ofBindal Apparels Ltd. (supra), Delhi Bench of IT AT took a similar view and held that in view of definition of Assessing Officer contained u/s 2(7A), an Additional Commissioner cannot be an authority to exercise and perform all or any of the powers of the functions of the Assessing Officer to make assessment of Income. The Bench analysed the provisions of Section 2(7A) as it existed prior to amendment made by Finance Act, 2007. 3.38. During the course of hearing, it was also submitted by Ld. CIT-DR to defend the impugned assessment order that in any case

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the assessment order has been passed by an officer of the rank of Additional Commissioner which is much superior to the rank of Assistant Commissioner and thus no prejudice can be presumed to have been done to the assessee. We find that reasoning given by the Ld. CIT-DR to defend the impugned assessment order does not have any legal force. It is well settled law that jurisdictional conditions required to be fulfilled by the assessing officer must be performed strictly in the manner as have been prescribed and if it has not been done in the manner as prescribed under the law, then it becomes nullity in the eyes of law. Hon'ble Supreme Court in the case of CIT v. Anjum M. H. Ghaswala [20011 252 ITR 1/119 Taxman 352 observed that it is a normal rule of construction that when a statue vests certain powers in an authority to be exercised in a particular manner, then that authority is bound to exercise it only in the manner provided in the statue only. 3.39. Hon'ble Bombay High Court dealt with a similar situation hi the case of Ghanshyam K. Khabrani (supra} wherein the said assessee raised an issue that requisite sanction prescribed u/s 151 for reopening of an assessment was required to be obtained by the AO from Joint Commissioner of Income tax whereas the same was granted by Commissioner of Income tax and therefore the same was nullity in the eyes of law. Revenue took a stand that sanction was granted by an officer superior in rank and therefore, no prejudice was caused to the assessee. But Hon'ble High Court did not agree with the contention of the Revenue and observed that:— "........The expression "Joint Commissioner" is defined in section 2(28C) to mean a person appointed to be a Joint Commissioner of Income Tax or an Additional Commissioner of Income-tax under section 117(1). Section 151(2) mandates that the satisfaction has to be of the Joint Commissioner. The expression has a distinct meaning by virtue of the definition in section 2(28C). The Commissioner of Income tax is not a Joint Commissioner within the meaning of section 2(28C). There is no statutory provision under which power to be exercised by an officer can be~ exercised by a superior officer. When the statute mandates

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the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Where a statute requires something to be done in a particular manner, it has to be done in that manner only............" 3.40. Thus, in view of the legal discussion made above and facts of the case, it is clear that impugned assessment order has been passed without authority of law hi as much as Revenue has not been able to demonstrate that the Additional Commissioner of Income tax who had passed the assessment order had valid authority to perform and exercise the powers and functions of an Assessing Officer of the assessee and to pass the impugned assessment order. Under these circumstances, we have no other option but to hold the same as nullity and, therefore, the impugned assessment order is quashed having been passed without authority of law. We also find that identical issue came up for consideration before the

Tribunal in the case of Tata Communications Ltd. for A.Y. 2002-03, and the

Tribunal, vide its order dated 30.06.2017, in ITA No. 6981/Mum/2005 decide

the issue in favour of the assessee and quashed the assessment made by the

Assessing Officer. The learned Standing Counsel even though tried his best

and submitted exhaustive arguments to compel us to take a different view

from the view which has been take by the co-ordinate bench under similar

facts and circumstances of the case of the assessee in A.Y. 2001-02, he could

not adduce any cogent material or evidence, which may prove that the facts

and issue involved in the impugned assessment year in the additional ground

taken by the assessee is different from that of A.Y. 2001-02. He went on

again and again submitting before this Tribunal that if the entire order is

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quashed after such a long time without deciding the merits of the case, would

cause unusual financial burden on the Revenue to refund the taxes paid. The

Standing Counsel should understand that this Tribunal is not to decide the

mercy petition but has to decide the issue before it in accordance with the

settled judicial principles of law. The Tribunal is not to decide the issue on

the basis of human and irrelevant consideration. We noted that Hon’ble

Supreme Court in the case of CIT vs. Shelly Products & Another (261 ITR

367) clearly held that taxes paid by the assessee on the returned income

cannot be refunded. We, therefore, following the principle of judicial

discipline hold that in the facts of the present case, the Additional CIT in the

absence of a valid order u/s. 120(4)(b) has well as section 127(1) of the Act

would not have exercised power of a Assessing Officer to pass impugned

assessment order. Accordingly, the impugned assessment order passed is

without jurisdiction would have no show and, therefore, quash the same.

that the matter may be restored to the file of the CIT(A) for adjudicating the

jurisdictional issue. Similar request, we noted has been made by the learned

DR before ‘F’ Bench of this Tribunal while arguing the case of Tata

Communications Ltd. (supra), wherein, we noted that while dealing with this

contention it has been held as under:

“18. We do not find any valid reason to accept the contention of the learned Departmental Representative. As stated earlier by us,

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exercise of jurisdiction by the Addl. CIT has to be examined on the basis of notification / orders passed under section 120(4)(b) inasmuch as section 127(1) of the Act. In this context, learned Departmental Representative has relied upon certain notifications to justify the validity of the assessment order passed by the Addl. CIT. As far as any order under section 127(1) is concerned, the learned Departmental Representative has fairly submitted that no such order exist on record. At least, nothing was brought to our notice in spite of specific query being raised by the Bench. Therefore, when the issues are to be decided on the basis of facts already available on record and keeping in view the relevant notifications placed on record as well as the decisions cited there is no necessity of restoring the matter back to the file of the learned Commissioner (Appeals). As far as the contention of the learned Departmental Representative regarding maintainability of the addition ground on the plea that the assessee can only challenge the jurisdictional issue under section 124(3) of the Act, we do not find any merit in such submissions. A plain reading of section 124 would show that it refers to an order issued under sub–section (1) or (2) of section 120 whereas we are concerned with an order purported to be passed under section 120(4)(b) empowering the Addl. CIT to act as an Assessing Officer. Therefore, in our view, the provisions of section 124 are not applicable to the present case. For that reason we do not feel it expedient to deal with the decisions relied upon by the learned Departmental Representative in that regard. Thus, in view of the aforesaid the additional ground and supplementary additional grounds are allowed.”

The decision of co-ordinate Bench is binding on us. We, therefore, quash the

assessment on legal issue. Thus, the ground raised on merits in ITA

3745/Mum/20016 becomes infructuous and, hence, not adjudicated.

appeal filed by the Revenue in ITA No. 3658/Mum/2006, in consequence,

becomes infructuous and the same is also dismissed as such.

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arisen out of the order passed by the CIT u/s. 263 of the Income-tax Act,

1961. The CIT has invoked his jurisdiction under 263 in respect of the order

passed u/s. 154 with respect to the assessment completed u/s. 143(3) on

15.03.2005. We have already quashed the order passed by the Assessing

Officer u/s. 143(3) therefore, the order passed by the Assessing Officer u/s.

154 with reference to the assessment order passed u/s. 143(3) has also

become infructuous and in consequence thereof the order passed by the CIT

by invoking jurisdiction u/s. 263 has become invalid. We, accordingly, quash

the order passed u/s. 263.

Order pronounced in the open court on 27th day of November, 2017.

Sd/- Sd/- (Ram Lal Negi) (P K Bansal) JUDICIAL MEMBER VICE-PRESIDENT Mumbai; Dated: 27thNovember, 2017 SA Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The CIT(A),Mumbai 4. The CIT 5. DR, ‘D’ Bench, ITAT, Mumbai By Order #True Copy # Assistant Registrar Income Tax Appellate Tribunal, Mumbai