ITAT Set-aside Order Passed by Addl. CIT as No Separate Order Was Passed Authorizing Him to Perform Functions of AO

Case Details: Tata Steel Ltd. v. ACIT - [2024] 163 taxmann.com 345 (Mumbai-Trib.)

Judiciary and Counsel Details

• B.R. Baskaran, Accountant Member & Sandeep Singh Karhail, Judicial Member
• J.D. Mistry, Nishant Thakkar & Ms Jasmin Amalsadvala for the Appellant. 
• P.C. Chhotaray for the Respondent.

Facts of the Case

In the instant case, the assessee raised additional grounds challenging the jurisdiction of the Additional Commissioner of Income Tax (Addl. CIT) in passing the assessment order under section 143(3). The assessee contended that the Addl. CIT was not authorized to issue the assessment order. It was submitted that the Addl. CIT passed the assessment order without the jurisdiction conferred on him vide order under section 120(4)(b) and also in the absence of an order transferring the jurisdiction under section 127.

The matter then reached before the Mumbai Tribunal.

ITAT Held

The Tribunal held that the term “Assessing Officer” has been defined under section 2(7A) of the Act. According to Section 2(7A), the Addl. CIT can exercise the powers of the Assessing Officer under the Act if the direction in this respect has been issued under section 120 (4)(b) of the Act. As per section 120(4)(b) of the Act, CBDT may, by general or special order, empower the authorities mentioned under the provision to issue orders in writing that the powers and functions assigned to the Assessing Officer shall be exercised or performed by the Addl. CIT.

In the instant case, the assignment orders have neither been furnished to the assessee nor been placed on record. Thus, nothing has been brought on record to suggest that the ACIT was authorized to perform the functions and exercise the powers of an Assessing Officer in the assessee’s case.

Further, the assessee can question the jurisdiction of the Assessing Officer only within one month after the receipt of notice under section 142(1) or section 143(2) or after the completion of the assessment, whichever is earlier.

However, said time limit for objecting to the jurisdiction of AO prescribed under section 124(3) relates to AO’s territorial jurisdiction. The time limit would not apply to a case where the assessee contends that the action of AO is without authority of law.

Therefore, in the absence of separate orders passed under section 120(4)(b) authorizing the ACIT to perform the functions and exercise the powers of an Assessing Officer, and also in the absence of an order transferring the jurisdiction under section 127, the assessment order was passed without any jurisdiction.

List of Cases Referred to

• National Thermal Power Co. Ltd. v. CIT [1999] 157 CTR 249/[1998] 229 ITR 383/97 Taxman 358 (SC) (para 5),
• Mega Corporation Ltd. v. Addl. CIT [2015] 62 taxmann.com 351/155 ITD 1019 (Delhi – Trib.) (para 6),
• Tata Sons Ltd. v. Asstt. CIT [2016] 76 taxmann.com 126/[2017] 162 ITD 450 (Mumbai) (para 9),
• Ultratech Cement Ltd. v. Addl. CIT [2017] 81 taxmann.com 74/298 CTR 437/[2018] 408 ITR 500 (Bombay) (para 11),
• Siemens India Ltd. v. K. Subramanian, ITO [1983] 34 CTR 23/143 ITR 120/13 Taxman 146 (Bombay) (para 14),
• Inventors Industrial Corpn. Ltd. v. CIT [1991] 96 CTR 206/[1992] 194 ITR 548 (Bombay) (para 15),
• Bansilal B. Raisoni & Sons v. Asstt. CIT [2019] 101 taxmann.com 20/260 Taxman 281 (Bombay) (para 22)
• CIT v. Smt. Godavaridevi Saraf [1978] 113 ITR 589 (Bombay) (para 23).