Order Passed by an Authority Without Jurisdiction Is Void Ab Initio; Can’t Be Enforced | HC

Case Details: PCIT v. Divine Light Finance LTD. - [2024] 165 taxmann.com 254 (Calcutta)

Judiciary and Counsel Details

• Surya Prakash Kesarwani & Ajay Kumar Gupta, JJ.
• Soumen Bhattacharjee, Adv. for the Appellant.

Facts of the Case

The assessee’s assessment was completed by the Kolkata Assessing Officer (AO). Subsequently, the Commissioner of Income Tax, Kolkata, passed an order under section 263 for the same assessment year. Later, the jurisdiction over the assessee was transferred to the Commissioner of Income Tax – 11 (CIT-11), Kolkata.

The AO, Ward No.9(1), Kolkata, passed a consequential order under section 143 for the assessment year 2014-15. Aggrieved by the order, the assessee preferred an appeal to the CIT(A), which the CIT(A) confirmed. The assessee then preferred an appeal to the Tribunal, contending that the CIT had no jurisdiction to pass the order under section 263.

ITAT Held

The Tribunal held that CIT-IV, Kolkata, who passed the order under Section 263 dated 19.01.2016, did not have jurisdiction over the assessee. Therefore, the ITAT concluded that the order passed by CIT-IV, Kolkata, under Section 263 of the Act, was without jurisdiction.

Aggrieved by the order, the department filed an instant appeal to the High Court.

The High Court held that the power of CBDT to confer jurisdiction under the Act is undisputed. Neither the AO disputed the issuance of Notification dated 22.10.2014 by the CBDT, nor has learned counsel for the AO disputed it that the Jurisdictional CIT with respect to the assessee was the CIT-11, Kolkata when the order dated 19.01.2016 under Section 263 of the Act was passed.

Thus, on the date the order under Section 263 was passed by the CIT-IV, Kolkata, he was not the jurisdictional CIT, and, thus, he inherently lacked jurisdiction to pass the order under Section 263.

Where an authority or court lacks inherent jurisdiction in passing a decree or order, the decree or order passed by such authority or court would be without jurisdiction, non-est and void ab initio. The lack of territorial jurisdiction of the CIT-IV to exercise supervisory jurisdiction goes to the root of the matter and strikes at his very authority to pass the said order. Such defect is basic and fundamental, and therefore, the order passed by the said CIT having no territorial jurisdiction over the assessee is a nullity.

List of Cases Reviewed

• Kiran Singh v. Chaman Paswan AIR 1954 SC 340
• Hira Patari v. Kali Nath AIR 1962 SC 199
• Balwant N Vishwamitra and Others v. Yadav Sada Shiv Mull (2004) 8 SCC 706. [Para 9] followed.

List of Cases Referred to

• Balwant N Vishwamitra and Others v. Yadav Sada Shiv Mull (2004) 8 SCC 706 (para 9).