M/s. Mega Corporation Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 102/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97377 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 30-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: SALESH GUPTA
• Keywords: Business income; Retrospective amendment
• Section: 143(3); 142(1); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI L. P. SAHU ITA NO. 102/DEL/2014 ASSESSMENT YEAR: 2006-07 MEGA CORPORATION LTD., VS. ADDITIONAL CIT, NSIC COMPLEX, MAA ANANDMAYEE MARG, RANGE-6, OKHLA IND. AREA, PHASE-III, NEW DELHI. NEW DELHI. (PAN: AACCM9506E) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI SALIL AGGARWAL & SALESH GUPTA, ADV. RESPONDENT BY: SHRI P. DAM KANU NJNA, SR. DR DATE OF HEARING : 17 .08.2015 DATE OF PRONOUNCEMENT: 22:09.2015 ORDER PER I.C. SUDHIR: JUDICIAL MEMBER 1. THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER OF LEARNED CIT(A)-IX, NEW DELHI DATED 29.11.2013 AND R ELATES TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS IMPUGNED THE FIRST APPELLATE OR DER ON THE FOLLOWING GROUNDS OF APPEAL: 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE ORD ER OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT DATED 29.12.2008 W HICH WAS WITHOUT JURISDICTION SINCE THE LEARNED ADDITIONAL COMMISSIO NER OF INCOME-TAX, WHO FRAMED THE IMPUGNED ASSESSMENT WAS NOT EMPOWERE D OR 2 AUTHORIZED OR DIRECTED UNDER THE PROVISIONS OF SEC. 120(4)(B) READ WITH SECTION 2(7A) OF THE ACT TO EXERCISE THE POWER S OR PERFORM THE FUNCTIONS OF ASSESSING OFFICER AND AS SUCH, THE SAM E WAS WITHOUT JURISDICTION, INVALID AND DESERVE TO BE QUASHED AS SUCH. 1.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAVING ADMITTED THAT THERE IS NO ORDER UNDER SECTIO N 120(4)(B) OF THE ACT AS REQUIRED UNDER SECTION 2(7A) OF THE ACT WAS WHOLLY INCORRECT IN LAW AND ON FACT TO UPHOLD THE ASSESSMENT ON THE BAS IS OF AN ORDER UNDER SECTION 120(2) PASSED BY THE CIT-II, DELHI BA SED ON NOTIFICATION NO. 267 OF THE BOARD AND PRINCIPLE OF SUBSTANCE OVER PROCEDURE. 1.2 THAT THE FINDING OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THAT SINCE THE APPELLANT HAD PARTICIPATED IN THE PROCEEDING BEFORE THE ASSESSING OFFICER, THEREFORE, THE APPELL ANT HAS ACCEPTED THE JURISDICTION OF THE ASSESSING OFFICER, IS CONTRARY TO THE WELL SETTLED POSITION OF LAW THAT THE PARTICIPATION CANNOT BE FO UNDATION FOR AN ASSESSMENT WITHOUT JURISDICTION AND IN ANY CASE, TH E SAID FINDING IS IN BREACH OF THE DIRECTIONS OF THE HONBLE TRIBUNAL IN ORDER DATED 16.01.2013, WHICH HAS ACQUIRED FINALITY AND HAS NOT BEEN CHALLENGED BY THE REVENUE. 2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) HAS OTHERWISE TOO FAILED TO APPRECIATE THAT THE ORDER O F ASSESSMENT WAS WITHOUT JURISDICTION IN ABSENCE OF AN ORDER TRANSFE RRING JURISDICTION U/S 127 OF THE ACT FROM THE LEARNED DCIT, CIRCLE 6( 1), NEW DELHI TO LEARNED ADDITIONAL COMMISSIONER OF INCOME-TAX, RANG E-6, NEW DELHI. 3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) - IX NEW DELHI HAS ALSO GROSSLY ERRED BOTH IN LAW AND ON FACTS IN 3 UPHOLDING THE ACTION OF THE LEARNED ASSESSING OFFIC ER TO TREAT THE LONG TERM CAPITAL GAIN ON SHARES OF RS. 6,10,92,870/- AS BUSINESS INCOME OF THE APPELLANT COMPANY AND, DISALLOWANCE OF CLAIM OF EXEMPTION OF RS. 6,10,92,870/- U/S 10(38) OF THE ACT. 3.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO APPRECIATE THAT THE SUM OF RS. 6,10,92,87 0/- REPRESENTED LONG TERM CAPITAL GAIN ACCRUED ON DISINVESTMENT OF SHARE S AND AS SUCH, THE FINDING THAT, SUCH GAIN REPRESENTS BUSINESS INCOME OF THE APPELLANT COMPANY IS MISCONCEIVED, MISPLACED AND, WHOLLY UNTE NABLE. 3.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS OVERLOOKED THE FACT THAT, ONCE IT IS AN UNDISPUTED AND ADMITTED FACT THAT, SHARES SOLD BY THE APPELLANT IN THE INSTANT A SSESSMENT YEAR WERE HELD AND, ACCEPTED AS INVESTMENTS IN THE PRECEDIN G ASSESSMENT YEAR, THERE REMAINED NO BASIS MUCH LESS ANY VALID B ASIS TO REGARD THE GAIN ACCRUING ON SALE OF SUCH INVESTMENT AS BUSINES S INCOME AND, NOT LONG-TERM CAPITAL GAIN ON SALE OF SHARES AND THEREF ORE, THE CONCLUSION IS ERRONEOUS AND, CONTRARY TO FACTS ON RECORD. 3.3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS OTHER-WISE FAILED TO APPRECIATE THAT, ONCE ASSESSEE WAS ADMITTEDLY THE OWNER OF EQUITY SHARES WHICH HAD BEEN HELD BY IT FO R A PERIOD EXCEEDING 12 MONTHS AND THE SAME WERE SOLD RESULTIN G INTO A LONG TERM CAPITAL GAIN OF RS. 6,10,92,870/- AND AS SUCH SINCE THE GAIN HAD ACCRUED TO THE ASSESSEE ON TRANSFER OF LONG TERM C APITAL ASSET, THE SAME WAS NOT INCLUDIBLE IN THE TOTAL INCOME OF THE ASSESSEE AND IN ANY CASE THE TAX LEVIED @ 30% INSTEAD OF PRESCRIBED RAT E OF TAX @ 20% WAS BEYOND JURISDICTION AND, HAD ERRONEOUSLY BEEN L EVIED. 4 3.4 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS), HAS FURTHER FAILED TO APPRECIATE THAT SUCH LONG TERM CA PITAL GAIN COULD NOT HELD TO BE BUSINESS INCOME ON THE MERE ASSUMPTION T HAT THE SHARES WERE NOT HELD BY THE APPELLANT IN ITS OWN DE-MAT AC COUNT WHICH DE- MAT ACCOUNT/BANK WERE ADMITTEDLY ON BEHALF OF THE A SSESSEE BY THE BROKER OF THE APPELLANT. 3.5 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS ERRED BOTH IN LAW AND ON FACTS IS CONCLUDING THAT T HE ASSESSEE HAS FAILED TO ESTABLISH THAT, SECURITIES TRANSACTION TA X WHICH WAS LEVIABLE ON THE TRANSFER OF SUCH SHARES WAS NOT PAID. THE F INDING IS FACTUALLY INCORRECT AND, CONTRARY TO MATERIAL ON RECORD. 3.6 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO APPRECIATE THAT, MERE ALLEGED VIOLATION O F THE PROVISIONS OF SEBI COULD NOT BE SUFFICIENT TO DISENTITLE THE ASSE SSEE, IN TREATING THE ASSET HELD AS EQUITY SHARES AS LONG TERM CAPITAL AS SET, PARTICULARLY WHEN TRANSACTIONS OF IDENTICAL NATURE WERE ACCEPTED IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR AND AS SUCH, FINDING RECORDED ARE BASED ON SUBJECTIVE, WHIMSICAL AND, ARBITRARY C ONSIDERATIONS AND, THEREFORE NOT SUSTAINABLE. 3.7 THAT THE FINDING OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN ORDER DATED 6.12.2010 THAT, NO PAYMENT FOR PURCHASE OF SHARES WAS MADE IN THE IMMEDIATELY PRECEDING ASSESS MENT YEAR IS FACTUALLY INCORRECT AND, CONTRARY TO MATERIAL ON RE CORD. INFACT, HE HAS OVERLOOKED THE FACT THAT, INVESTMENT WAS MADE IN TH E SHARES OUT OF THE SALE AND WAS SHOWN AND ACCEPTED AS SHORT TERM CAPIT AL GAIN ON PURCHASE AND, SALE OF SHARES IN THE IMMEDIATELY PRE CEDING ASSESSMENT YEAR, WHICH HAS BEEN OFFERED AND, ASSESSED TO TAX. 5 3.8 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FURTHER ERRED IN RECORDING CONTRADICTORY AND VAGUE FINDINGS IN ORDER DATED 6.12.2010. THE FINDINGS RECORDED IN THE IMPU GNED ORDER ARE TOTALLY CONTRARY TO THE MATERIAL PLACED ON RECORD A ND IS NOTHING BUT IS BASED ON FIGMENT OF AN IMAGINATION INCLUDING THE FI NDING THAT NO STT WAS PAID ON SUCH TRANSACTIONS AND IS NOT ESTABLISHE D FROM THE CONTRACT NOTES ISSUED BY THE BROKER, PARTICULARLY WHEN THERE IS NO MATERIAL ON DISPUTE THE GENUINENESS OF THE CONTRACT NOTES/BILLS ISSUED BY THE BROKER. 4 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN HOLDING T HAT, SHORT TERM CAPITAL GAIN OF RS. 2,98,49,797/- AND, RS. 1,20,513 /- DID NOT REPRESENT SHORT TERM CAPITAL GAIN BUT REPRESENTS BUSINESS INC OME OF THE APPELLANT COMPANY. 4.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO APPRECIATE THAT MERE FACT THAT SECURITIES WERE HELD BY THE BROKER OF THE APPELLANT COULD NOT BE A BASIS MUCH L ESS A VALID BASIS TO ALLEGE AND, HOLD THAT, SHORT-TERM CAPITAL GAIN ARIS ING ON PURCHASE AND, SALE OF SHARES WAS NOT TAXABLE @ 10% U/S 111A OF THE ACT BUT @30% AS BUSINESS INCOME OF THE APPELLANT COMPANY. 4.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO APPRECIATE THAT THE FINDING OF THE LEARNE D AO THAT, THE ASSESSEE HAS FAILED TO PRODUCE EVIDENCE THAT THESE BELONG TO TRANSACTIONS OF SHARES HELD BY IT WAS BASED ON MIS CONCEIVED FACTS AND FACTUALLY INCORRECT, LEGALLY MISCONCEIVED AND, WAS CONTRARY TO DOCUMENTARY EVIDENCE PLACED ON RECORD. 6 5 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE LE VY OF INTEREST U/S 234B OF RS. 98,80,958/- WHICH IS NOT LEVIABLE AT AL L ON THE FACTS OF THE INSTANT CASE. 3. THE RELEVANT FACTS LEADING TO FILING OF THE PRES ENT APPEAL ARE THAT FOR THE ASSESSMENT YEAR, THE ASSESSEE FURNISHED RETURN OF INCOME ON 30.11.2006 DECLARING AN INCOME OF RS. 4,27,86,793/- WHICH CAME TO BE ASSESSED AT AN INCOME OF RS. 9,10,63,184/- IN AN ORDER DATED 29.1 2.2008 UNDER SECTION 143(3) OF THE ACT. THE APPEAL FILED BY APPELLANT-AS SESSEE WAS DISMISSED VIDE ORDER DATED 6.12.2010 BY LEARNED CIT(A). ON FURTHER APPEAL BEFORE TRIBUNAL, THE ASSESSEE RAISED FOLLOWING ADDITIONAL GROUNDS OF APPEAL: 1. THAT ORDER OF ASSESSMENT U/S. 143(3) OF THE ACT 29.12.2008 IS WITHOUT JURISDICTION SINCE THE LEARNED ADDITIONAL C OMMISSIONER OF INCOME-TAX, WHO FRAMED THE IMPUGNED ASSESSMENT WAS NOT EMPOWERED OR AUTHORIZED OR DIRECTED UNDER THE PROVI SIONS OF SEC. 120(4)(B) READ WITH SECTION 2(7A) OF THE ACT TO EXE RCISE THE POWERS OR PERFORM THE FUNCTIONS OF ASSESSING OFFICER AND AS S UCH, ORDER OF ASSESSMENT IS ILLEGAL, INVALID AND, BE QUASHED AS S UCH. 2. WITHOUT PREJUDICE TO THE ABOVE, EVEN IF IT IS AS SUMED (NOT ADMITTED) FOR THE SAME OF AN ARGUMENT THAT THE LEAR NED ADDITIONAL COMMISSIONER OF INCOME-TAX WAS EMPOWERED UNDER SECT ION 124)4)(B) READ WITH SECTION 2(7A) OF THE ACT, THEN TOO, ORDER OF ASSESSMENT IS WITHOUT JURISDICTION IN ABSENCE OF AN ORDER TRANSFE RRING JURISDICTION U/S. 127 OF THE ACT FROM THE LEARNED DCIT, CIRCLE 6 (1), NEW DELHI TO 7 LEARNED ADDITIONAL COMMISSIONER OF INCOME-TAX, RANG E-6, NEW DELHI. 3.1 THE ITAT IN AN ORDER DATED 16.1.2013 ADMITTED T HE ADDITIONAL GROUNDS AND THEREAFTER, SET ASIDE TWO ISSUES RAISED IN THE ADDITIONAL GROUND TO THE FILE OF LEARNED CIT(A) FOR ADJUDICATION ON MERITS. IT WA S HELD AS UNDER: 7. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. AS FAR AS THE ADMISSI ON OF ADDITIONAL GROUNDS OF APPEAL ARE CONCERNED, WE ARE OF THE VIEW THAT BOTH THESE GROUNDS ARE DIRECTLY CHALLENGING THE VALIDITY OF TH E ASSESSMENT WHICH WOULD ULTIMATELY EFFECT THE TAXABILITY OF THE ASSES SEE. IF THE ASSESSMENT ORDER HAS BEEN PASSED BY AN AUTHORITY WHO HAS NO JU RISDICTION OVER THE ASSESSEE IN THAT CASE, THE ASSESSMENT ORDER WOU LD NOT BE SUSTAINABLE. HONBLE SUPREME COURT IN THE CASE OF N TPC HAS OBSERVED THAT IF A PARTICULAR LEGAL ISSUE WHICH EFF ECTS THE TAXABILITY OF THE ASSESSEE THEN EVEN AT BELATED STAGE THE ASSESSE E CAN BE PERMITTED TO RAISE LEGAL ISSUE. THEREFORE, WE ADMIT THE ADDIT IONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE. AS FAR AS THE MERITS OF THE GROUNDS ARE CONCERNED, ADMITTEDLY FIRST NOTICE UNDER SEC. 143(2 ) WAS ISSUED BY THE DCIT, CIRCLE-6, NEW DELHI. LEARNED ADDITIONAL COMMI SSIONER TOOK CHARGE OF THE ASSESSMENT PROCEEDINGS FROM 25.8.2008 . THE MATERIAL PLACED ON RECORD IN THE SHAPE OF CORRESPONDENCE BY THE LEARNED DR IS NOT SUFFICIENT TO CLINCH THE ISSUE. THESE ARE GE NERAL INFORMATION AND IT IS NOT DISCERNIBLE WHETHER LEARNED DCIT AND ADDI TIONAL CIT WERE HAVING CONCURRENT JURISDICTION ON THE COMPANIES WHO SE NAMES START WITH ALPHABET M. SIMILARLY, IT IS NOT DISCERNIBLE WHETHER THE 8 JURISDICTION OVER THE ASSESSEE WAS TRANSFERRED UNDE R SEC. 127 OF THE ACT OR NOT. FACED WITH THIS SITUATION, WE HAVE CONF RONTED THE LEARNED REPRESENTATIVES AND PUT AS TO WHY A FINDING MAY NOT BE CALLED FOR FROM THE LEARNED FIRST APPELLATE AUTHORITY ON THIS ISSUE WHO WILL BE LOOKED INTO RELEVANT RECORD AVAILABLE WITH THE DEPARTMENT. BOTH THE REPRESENTATIVES HAD EXPRESSED NO OBJECTION OVER THE SUGGESTION. CONSIDERING ALL THESE ASPECTS, WE DEEM IT APPROPRIA TE TO SET ASIDE THESE TWO ISSUES TO THE FILE OF THE LEARNED CIT(APP EALS) FOR ADJUDICATING THEM ON MERIT. LEARNED CIT(APPEALS) SH ALL PASS A SPEAKING ORDER REFERRING TO ALL RELEVANT MATERIAL. 8. IN CASE, THE GROUNDS ARE ACCEPTED AND ASSESSMEN T ORDER IS QUASHED THEN NO PROCEEDING WOULD REMAIN, HOWEVER, I N CASE LEARNED CIT(APPEALS) DOES NOT FIND ANY ERROR IN PASSING THE ASSESSMENT ORDER BY THE LEARNED ADDITIONAL CIT, THEN THE ASSESSEE WI LL BE AT LIBERTY TO CHALLENGE THE ISSUES, WHETHER LONG TERM CAPITAL GAI N AND SHORT TERM CAPITAL GAIN EARNED BY IT, IS TO BE ASSESSED AS A B USINESS INCOME OR NOT? IN OTHER WORDS, WE ARE NOT ADJUDICATING THIS C ONTROVERSY. THE ASSESSEE WILL TAKE ALL THE GROUNDS OF APPEAL TAKEN BEFORE US IN THE SECOND ROUND OF LITIGATION. LEARNED CIT(APPEALS) NE ED NOT TO COMMENT ON ANY OTHER ISSUE. IT IS NEEDLESS TO SAY T HAT THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJURE THE CASE OF TH E ASSESSING OFFICER AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXP LANATION OF THE ASSESSEE. LEARNED FIRST APPELLATE AUTHORITY SHALL A DJUDICATE THE ALLEGED GROUNDS OF APPEAL. 9 3.2 THE LEARNED CIT(A) THEREAFTER, CALLED FOR THE C OMMENTS FROM THE ASSESSING OFFICER AND DISMISSED THE APPEAL OF THE A SSESSEE AND AS SUCH, THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE. 4. GROUND NOS. 1 AND 2 RAISED BY THE ASSESSEE CHALL ENGE THE ASSUMPTION OF JURISDICTION BY THE ADDITIONAL CIT TO FRAME THE IMPUGNED ORDER OF ASSESSMENT DATED 29.12.2008 UNDER SECTION 143(3) OF THE ACT. THE RELEVANT FACTS ARE THAT APPELLANT COMPANY FURNISHED A RETURN OF INCOME ON 30.11.2006 WHICH WAS ACCEPTED IN AN INTIMATION DATED 23.3.2008 UNDER SECTION 143(1) OF THE ACT. IT IS FURTHER NOT DISPUTED THAT NOTICE U/S 143(2) OF THE ACT DATED 15.10.2007 WAS ISSUED BY DCIT, CIRCLE 6, NEW DELHI FOR FRAMING ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THEREAF TER, ON 25.8.2008, NOTICE WAS ISSUED BY ADDITIONAL CIT, RANGE 6, NEW DELHI UN DER SECTION 142(1) OF THE ACT AND PURSUANT THERETO, ASSESSMENT HAS BEEN F RAMED UNDER SECTION 143(3) OF THE ACT ON 29.12.2008 BY THE ADDITIONAL C IT, RANGE 6, NEW DELHI. THE CONTENTION OF THE ASSESSEE IS THAT THE A FORESAID ASSESSMENT FRAMED BY THE ADDITIONAL CIT RANGE-6, NEW DELHI IS WITHOUT JURISDICTION AS FIRSTLY, HE WAS NOT AN ASSESSING OFFICER UNDER SECTION 120(4 )(B) OF THE ACT AND FURTHERMORE, THERE WAS NO ORDER UNDER SECTION 127(1 ) OF THE ACT FOR TRANSFER OF JURISDICTION FROM DCIT, CIRCLE 6(1), NEW DELHI T O ADDITIONAL CIT, RANGE 10 6, NEW DELHI. AS REGARDS FORMER CONTENTION, THE LEA RNED CIT(A) NEGATED THE SAID SUBMISSION BY CONCLUDING AS UNDER: 15.5 THE APPELLANTS MAIN CONTENTION IS THAT IN THE ABSENCE OF ORDER U/S 120(4)(B),, AS REQUIRED BY SECTION 2(7A), THE I MPUGNED ASSESSMENT ORDER OF ADDL. CIT IS WITHOUT JURISDICTION. IT IS A FACT THAT THERE IS NO ORDER U/S 120(4)(B). BUT THERE IS AN ORDER U/S 120( 2) PASSED BY THE CIT-II, DELHI, AS POINTED OUT BY THE LD. AR OF ASSE SSEE, THE ISSUE REMAINS WHETHER ORDER U/S 120(2) CAN FULFILL THE RE QUIREMENT OF ORDER U/S 120(4)(B). ON THE BASIS OF PRINCIPLE LAID DOWN IN THE DECISION OF CITY GARDEN VS. ITO (SUPRA) THAT SUCH DECISION HAS TO KEEP IN MIND THAT DEFECT OF PROCEDURE SHOULD NOT INVALIDATE THE END ACTION AND ALLOCATION OF FUNCTIONS IS MATTER OF PROCEDURE AND NOT SUBSTANCE, THE AMBIGUITIES IN THE ORDER OF CIT-II, DELHI U/S 120(2 ) CAN BE IGNORED. IN THE JUDICIAL CITATION GIVEN BY THE LD. AR, THERE WA S NO ORDER U/S 120(2) AND HENCE ARE DISTINGUISHABLE IN THIS CASE. APPLYING THE PRINCIPLE OF SUBSTANCE OVER PROCEDURE, THE ISSUE NE EDS RE- EXAMINATION. THERE IS AN ALTERNATIVE REMEDY AVAILAB LE U/S 124 OF THE ACT. AGAINST THIS, THE LD. AR ARGUED THAT SINCE BAS ED ON THE DECISION IN THE CASE OF NTPC LTD. VS. CIT (SUPRA), THE HONB LE ITAT ACCEPTED THE ADDITIONAL GROUND OF JURISDICTION, THE ISSUE OF SECTION 124(2) & (3) IS NOT APPLICABLE. HOWEVER, IN VIEW OF THE DECISION OF THE HONBLE HIGH COURTS IN CIT VS. BRITISH INDIA CORPORATION LT D. (SUPRA) AND MUKTI PROPERTIES (P) LTD. VS. CIT (SUPRA), WHICH AR E DIRECTLY ON THE ISSUE OF JURISDICTION RAISED BY THE APPELLANT AT A LATER STAGE AND NOT AT THE STAGE OF ASSESSMENT, THE ADMISSION OF SUCH GROU NDS OF APPEAL BY 11 THE HONBLE ITAT MAY BE RE-EXAMINED. IN VIEW OF THI S, THE CONTENTION OF THE APPELLANT THAT THE IMPUGNED ORDER PASSED BY THE ADDL. CIT IS WITHOUT ANY JURISDICTION IS NOT ACCEPTED. AS FAR AS , SPECIFIC DIRECTIONS OF THE HONBLE ITAT IS CONCERNED THERE IS NO PROCED URAL LAPSE ADVERSELY AFFECTING THE APPELLANT IN THE IMPUGNED O RDER. HENCE, I FIND NO ERROR IN PASSING THE ASSESSMENT ORDER BY THE LD. ADDL. CIT. HENCE, THIS GROUND OF APPEAL IS DISMISSED. 4.1 SO FAR AS THE LATTER CONTENTION IS CONCERNED, T HE SAME TOO, WAS NEGATED BY THE LEARNED CIT(APPEALS) BY CONCLUDING AS UNDER: 15.3 THE APPELLANT OBJECTED THAT EVEN IF CONCURRENT JURISDICTION IS GIVEN TO THE ADDL. CIT, AN ORDER U/S 127 OF THE ACT IS REQUIRED TO BE PASSED TO GIVE ADDL. CIT THE POWER TO COMPLETE A PA RTICULAR ASSESSMENT AS IT IS DONE IN THE CASES OF TRANSFER O F CASES TO ANOTHER AO AFTER ISSUE OF NOTICE U/S 143(2) OF THE ACT BY ANOT HER AO. ON THIS ACCOUNT, THE ISSUE RAISED IS WHETHER AFTER NOTICE U /S 143(2) IS ISSUED BY THE DCIT, CIRCLE-6(1), ASSESSMENT ORDER CAN BE P ASSED BY THE ADDL. CIT OF RANGE-6 HAVING CONCURRENT JURISDICTION. THIS ISSUE INVOLVES THE INTERPRETATION OF CONCURRENT JURISDICTION WHICH IS BEYOND THE SCOPE OF THIS APPEAL WITHIN THE RESTRICTED DIRECTION OF THE HONBLE ITAT. IN MY CONSIDERED OPINION, SINCE BOTH ADDL. CIT RANGE-6 AN D DCIT CIRCLE- 6(1) WORKS AS SUBORDINATE OFFICER TO THE SAME CIT, AND THE CIT HAVING ENTIRE TERRITORIAL JURISDICTION, THE PASSING OF ASS ESSMENT ORDER BY THE ADDL. CIT AFTER ISSUE OF NOTICE U/S 143(2) BY THE D CIT CIRCLE-6(1) DOES NOT AFFECT THE TAXABILITY OF THE APPELLANT OR APPELLANT IS NOT ADVERSELY AFFECTED BY THE ORDER. 12 4.2 APART FROM THE ABOVE, ANOTHER ADDITIONAL BASIS ADOPTED BY THE LEARNED CIT(A) TO REJECT THE CLAIM OF THE APPELLANT IS THAT THE ASSESSEE HAS NOT CHALLENGED THE JURISDICTION OR AUTHORITY OF THE ASS ESSING OFFICER TO MAKE THE ASSESSMENT ITSELF AT THE STAGE OF ASSESSMENT AND ON CE THE ASSESSEE HAD SUBSCRIBED TO THE JURISDICTION AND PARTICIPATED IN THE ASSESSMENT PROCEEDINGS, THE SAID CONTENTION IS NOT TENABLE. HE HAS HELD IN THIS REGARD AS UNDER: 14. IN MY CONSIDERED OPINION, THE CONTENTIONS RAISE D BY THE APPELLANT ARE LIABLE TO BE REJECTED AS THE APPELLAN T HAS NEVER CHALLENGED THE JURISDICTION OR AUTHORITY OF THE AO TO MAKE ASSESSMENT BEFORE THE AO, ITSELF. EVEN IF IT IS ASSUMED THAT A O HAD NO AUTHORITY OR WAS NOT THE PROPER ASSESSING OFFICER, AS PER SECTIO N 120 OF THE ACT OR WAS NOT COMPETENT TO PASS AN ORDER AS PER BOARD CIR CULAR, YET THE ASSESSEE SUBSCRIBED TO HIS JURISDICTION AND PARTICI PATED IN THE ASSESSMENT PROCEEDINGS UNCHALLENGED. THIS BEHAVIOR OF THE ASSESSEE GOES AGAINST RAISING ANY CONTENTION AT LATER STAGE. AFTER SILENTLY PARTICIPATING IN THE PROCEEDINGS BEFORE THE AO, THE APPELLANT HAS ACCEPTED THE JURISDICTION OF THE AO. HAD THE APPELL ANT RAISED THE ISSUE AT THE LEVEL OF AO, THE AO COULD HAVE WRITTEN TO TH E HIGHER AUTHORITIES FOR DEFINING THE JURISDICTION. BY NOT DOING SO THE APPELLANT SURRENDERED THE RIGHT TO OBJECT THE JURISDICTION OF THE AO WHICH CANNOT BE REVIVED AT THE LATER STAGE JUST TO PROLON G THE ISSUE FOR ADJUDICATION. SIMILAR IS THE CASE WITH REGARD TO TH E VALIDITY OF NOTICE U/S 143(2) OF THE ACT AND ASSESSEE HAS NOWHERE CHAL LENGED DURING THE 13 ASSESSMENT PROCEEDINGS THAT NOTICE IS BAD OR BEYOND STATUTORY PERIOD AS PRESCRIBED U/S 143(2) OF THE ACT. 4.3 BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SHRI SALIL AGGARWAL, SUBMITTED THAT IT IS AN ADMITTED POSITION THAT THER E IS NO ORDER UNDER SECTION 120(4)(B) OF THE ACT SO AS TO CONFER JURISDICTION O N THE ADDITIONAL CIT, RANGE 6, NEW DELHI TO FRAME THE IMPUGNED ASSESSMENT . IT WAS SUBMITTED THAT IN ABSENCE OF SUCH AN ORDER UNDER SECTION 120( 4)(B) READ WITH SECTION 2(7A) OF THE ACT SO AS TO VEST THE ADDITIONAL CIT T HE POWER TO EXERCISE AND PERFORM THE FUNCTIONS OF THE ASSESSING OFFICER, THE ASSESSMENT FRAMED IS LEGALLY UNSUSTAINABLE. HE REFERRED TO THE PROVISIO NS CONTAINED IN SECTIONS 120, 121 AND ALSO SECTION 124 ALONG WITH 2(7A) OF T HE ACT TO SUPPORT HIS CONTENTION. IT WAS CONTENDED THAT ORDER DATED 1.8. 2007 IN AN ORDER U/S 120(2) AND NOT U/S 120(4)(B) OF THE ACT. IT WAS SU BMITTED THAT IN ANY CASE, EVEN ASSUMING THAT THE SAID ORDER IS A VALID ORDER CONFERRING JURISDICTION ON ADDITIONAL COMMISSIONER OF INCOME TAX THEN TOO IMPU GNED ASSESSMENT IS INVALID SINCE NOTICE U/S 143(2) WAS ISSUED ON 15.10 .2007 BY DCIT, WHO THEN DID NOT HAVE JURISDICTION TO VALIDLY INITIATE PROCE EDINGS FOR ASSESSMENT U/S 143(3) OF THE ACT. THUS IN HIS SUBMISSION, ON EITH ER OF THE BASIS, THE ASSESSMENT FRAMED IS AN INVALID ASSESSMENT. IT WAS ALSO SUBMITTED THAT THERE IS NO ORDER UNDER SECTION 127 OF THE ACT FOR TRANSF ER OF JURISDICTION FROM 14 DCIT TO ADDITIONAL CIT. IT HAS BEEN CONTENDED THAT WHEN A POWER IS CONFERRED UPON TWO AUTHORITIES CONCURRENTLY ONE OF THEM CAN EXERCISE THAT POWER AND ONCE A DECISION IS TAKEN TO EXERCISE THE POWER EITHER BY THE TWO AUTHORITIES, THAT EXERCISE MUST BE TERMINATED BY TH E EITHER AUTHORITY. IN SUPPORT OF ABOVE, THE LEARNED COUNSEL ALSO RELIED U PON THE FOLLOWING DECISIONS: A) M/S. PRACHI LEATHERS PVT. LTD. VS. ADDITIONAL CI T IN 744 /LUCKNOW/04 DATED 29.3.2010; B) M/S. CITY GARDEN VS. ITO 21 TAXMANN.COM 373 (JO DHPUR) C) MICROFIN VS. CIT 94 TTJ 677 (LUCKNOW) 4.4 THE LEARNED COUNSEL FURTHER CONTENDED THAT MERE ACQUIESCENCE OR PARTICIPATION IN ASSESSMENT PROCEEDINGS CANNOT CONF ER JURISDICTION TO AN ASSESSING OFFICER WHO LACKED JURISDICTION. HE RELIE D ON THE CASES REPORTED IN SEWLAL DAGA VS. CIT 55 ITR 406 (CAL), M/S TANSUKHRA I BODULAL VS. ITO 46 ITR 325 (ASSAM), P.V.DOSHI VS. CIT 113 ITR 22 (GUJ) , VALVOLINE CUMMINS LTD 307 ITR 103 (DEL), SWARAN YASH VS. CIT 138 ITR 734 (DEL) AND INVESTORS INDUSTRIAL CORPORATION LTD. S. CIT 194 IT R 548 (BOM). 4.5 THE LEARNED DR RELIED ON THE FINDINGS OF THE LE ARNED CIT(A) AND CONTENDED THAT THE CONTENTION RAISED BY THE ASSESSE E ARE NOT MAINTAINABLE MORE PARTICULARLY WHEN THE ISSUE OF JURISDICTION WA S NEVER RAISED DURING THE 15 ASSESSMENT PROCEEDINGS AND THEREFORE, ORDER OF ASSE SSMENT WAS WITHIN THE JURISDICTION FRAMED BY THE ADDITIONAL CIT, RANGE 6, NEW DELHI. 5. 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 RAIS ED 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 A DDITIONAL CIT U/S 120(4)(B) 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 UND ER: 2(7A) ASSESSING OFFICERS (7A) 'ASSESSING OFFICER' MEANS THE ASSISTANT COMMISSIONE R OR 2 DEPUTY COMMISSIONER 3 OR ASSISTANT DIRECTOR 4 OR DEPUTY DIRECTOR OR THE INCOME-TAX OFFICER WHO IS VESTED WITH THE RE LEVANT JURISDICTION BY VIRTUE OF DIRECTIONS OR ORDERS ISSU ED UNDER SUB-SECTION (1)OR SUB-SECTION (2) OF SECTION 120 OR ANY OTHER P ROVISION OF THIS ACT, AND THE 6 [ ADDITIONAL COMMISSIONER OR ] 6 7 [ ADDITIONAL DIRECTOR OR ] 7 5 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 16 OF THE POWERS AND FUNCTIONS CONFERRED ON, OR ASSIGN ED TO, AN ASSESSING OFFICER UNDER THIS ACT; 5.2 A PLAIN READING OF THE AFORESAID PROVISION WOUL D SHOW THAT IT IS IN TWO PARTS. THE FIRST PART PROVIDES THAT ASSESSING OFFIC ER MEANS THE ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER OR ASSISTAN T DIRECTOR OR DEPUTY DIRECTOR OR INCOME TAX OFFICER WHO IS VESTED WITH THE RELEVANT JURISDICTION BY VIRTUE OF DIRECTIONS OR ORDERS ISSU ED UNDER SECTION 120(1) OR 120(2) OR ANY OTHER PROVISION OF THIS ACT. THE SECO ND PART PROVIDES THAT ASSESSING OFFICER MEANS THE ADDITIONAL COMMISSIONE R OR ADDITIONAL DIRECTOR OR JOINT COMMISSIONER OR JOINT DIRECTO R 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 ASSESS ING OFFICER UNDER THIS ACT. IN OTHER WORDS, IT IS MANIFEST THAT ASSESSING OFFICER INTER-ALIA MEANS ADDITIONAL COMMISSIONER WHO IS DIRECTED UNDER SECTI ON 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 12 0(4)(B) OF THE ACT TO ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER O R ASSISTANT DIRECTOR OR DEPUTY DIRECTOR OR INCOME TAX OFFICE R UNDER THE ACT. THIS 17 INTERPRETATION ALSO DERIVES STRENGTH FROM THE PROVI SIONS CONTAINED IN SECTION 120(4)(B) OF THE ACT WHICH READS AS UNDER: 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 SUB JECT TO SUCH CONDITIONS, RESTRICTIONS OR LIMITATIONS AS MAY BE S PECIFIED THEREIN,-...... (B) EMPOWER THE DIRECTOR GENERAL OR CHIEF COMMISSI ONER OR COMMISSIONER TO ISSUE ORDERS IN WRITING THAT THE PO WERS AND FUNCTIONS CONFERRED ON, OR AS THE CASE MAY BE, ASSIGNED TO, T HE ASSESSING OFFICER BY OR UNDER THIS ACT IN RESPECT OF ANY SPECIFIED AR EA OR PERSONS OR CLASSES OF PERSONS OR INCOMES OR CLASSES OF INCOME OR CASES OR CLASSES OF CASES, SHALL BE EXERCISED OR PERFORMED BY 2 [ AN ADDITIONAL COMMISSIONER OR ] 2 3 [ AN ADDITIONAL DIRECTOR OR ] 3 A JOINT COMMISSIONER [[ OR A JOINT DIRECTOR, ]] AND, WHERE ANY ORDER IS MADE UNDER THIS CLAUSE, REFERENCES IN ANY OTHER PROVISIO N OF THIS ACT, OR IN ANY RULE MADE THEREUNDER TO THE ASSESSING OFFICER S HALL BE DEEMED TO BE REFERENCES TO SUCH 2 [ ADDITIONAL COMMISSIONER OR ] 2 3 [ ADDITIONAL DIRECTOR OR ] 3 JOINT COMMISSIONER [[ OR A JOINT DIRECTOR, ]] BY WHOM THE POWERS AND FUNCTIONS ARE TO BE EXERCISED OR PER FORMED UNDER SUCH ORDER, AND ANY PROVISION OF THIS ACT REQUIRING APPR OVAL OR SANCTION OF THE JOINT COMMISSIONER SHALL NOT APPLY. 5.3 IT WILL BE SEEN THAT THE SAID PROVISION PROVIDE S THAT BOARD MAY BY GENERAL OR SPECIAL ORDER AND SUBJECT TO SUCH CONDIT IONS, 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 MA Y BE, ASSIGNED TO, ASSESSING OFFICER BY OR UNDER THIS ACT IN RESPECT O F ANY SPECIFIED AREA OR 18 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 C OMMISSIONER OR A JOINT DIRECTOR AND WHERE ANY ORDER IS MADE UNDER THIS CLA USE, REFERENCE IN ANY OTHER PROVISION OF THIS ACT OR IN ANY RULE MADE THE REUNDER TO THE ASSESSING OFFICER SHALL BE DEEMED TO BE REFERENCES TO SUCH AD DITIONAL COMMISSIONER OR ADDITIONAL DIRECTOR OR JOINT COMMISSIONER OR A J OINT DIRECTOR BY WHOM, THE POWERS AND FUNCTIONS ARE TO BE EXERCISED OR PER FORMED 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 ADDI TIONAL 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)(B) OF TH E ACT. IN FACT, THE ABOVE CONCLUSION IS ALSO SUPPORTED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF PRACHI LEATHERS PVT. LTD. (SUPRA) WHEREIN IT HAS BE EN HELD IN PARA 16.2 OF THE DECISION AS UNDER: 16.2 FROM THE CONTENTS OF THE AFORESAID PROVISIONS , IT IS QUITE CLEAR THAT SO FAR AS ADDL. COMMISSIONER IS CONCERNED, FIR STLY HE HAS BEEN 19 INCLUDED IN THE DEFINITION OF ASSESSING OFFICER G IVEN UNDER SECTION 2(7A) OF THE ACT WITH EFFECT FROM 1.6.1994 AS A RES ULT OF RETROSPECTIVE AMENDMENT MADE BY THE FINANCE ACT, 2007 BUT AT THE SAME TIME, IT IS ALSO CLEAR THAT THE ADDL. COMMISSIONER WILL BE ASSE SSING OFFICER AS ENVISAGED IN SECTION 2(7A) SO AMENDED ONLY IF HE IS DIRECTED UNDER CLAUSE (B)OF SUB-SECTION (4) OF SECTION 120 TO EXER CISE OR PERFORM ALL OR ANY OF THE POWERS AND FUNCTIONS CONCERNED ON OR ASSIGNED TO AN ASSESSING OFFICER; MEANING THEREBY THAT THE ADDL. C IT CAN FUNCTION OR CAN EXERCISE THE POWERS AND PERFORM THE FUNCTIONS O F AN ASSESSING OFFICER IF HE IS EMPOWERED BY THE CBDT AS REQUIRED UNDER CLAUSE (B) OF SUB-SECTION (4) OF SECTION 120. 18.1 SO FAR AS THE ISSUE BEFORE US IN THE PRESENT A PPEAL IS CONCERNED, IT IS NOW CLEAR FROM THE PROVISIONS AS DISCUSSED HE REINBEFORE THAT THE ADDITIONAL CIT COULD ACT AND EXERCISE THE POWERS O F AN AO ONLY IN CONSEQUENCE UPON DELEGATION OF SUCH AUTHORITY BY TH E BOARD, CHIEF COMMISSIONER OF INCOME-TAX OR COMMISSIONER OF INCOM E-TAX AS ENVISAGED IN THE PROVISIONS OF SECTION 120(4)(B) OF THE ACT. HOWEVER, THE POWER GIVEN TO THE CHIEF COMMISSIONER OF INCOME -TAX OR COMMISSIONER OF INCOME-TAX BEING IN CONSEQUENCE UP ON THE DELEGATION OF POWER DULY AUTHORIZED BY THE LEGISLAT URE, THE CHIEF COMMISSIONER OF INCOME-TAX OR COMMISSIONER OF INCOM E-TAX WERE DUTY BOUND, IF AT ALL THEY WERE TO EXERCISE SUCH D ELEGATED 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 A T ALL THEY WANTED TO AUTHORIZE THE ADDITIONAL CIT TO ACT AND PERFOR M THE FUNCTIONS OF 20 AN AO, TO PASS A PROPER ORDER DELEGATING SUCH F UNCTIONS/ POWERS UPON HIM. THIS VIEW OF OURS IS FULLY SUPPORTED BY THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CAS E OF DR. NALINI MAHAJAN VS. DIT, 257 ITR 123, WHEREIN THE HON'BLE H IGH COURT, WHILE DISCUSSING THE POWERS OF ADDITIONAL DIRECTOR INVESTIGATION, HELD AS UNDER: 'IT IS NOW WELL-SETTLED THAT WHEN A POWER IS GIVEN TO DO A CERTAIN THING IN A CERTAIN MANNER, THE SAME MUST BE DONE IN THAT MANNER OR NOT AT ALL. A DELEGATION OF POWER IS ESSENTIALLY A LEGISLA TIVE FUNCTION. SUCH A POWER OF DELEGATION MUST BE PROVIDED BY THE STATUTE . THE DIRECTOR HIMSELF FOR CERTAIN MATTERS IS THE DELEGATING AUTHO RITY. HE, UNLESS THE STATUTE EXPRESSLY STATES, CANNOT SUB-DELEGATE HIS P OWER TO ANY OTHER AUTHORITY. IN ANY EVENT, IF AN AUTHORITY, WHICH HAD NO JURISDICTION TO ISSUE SUCH AN AUTHORIZATION, DID SO, THE SAME WOULD BE LIABLE TO BE QUASHED AS ULTRA VIRES. THUS, UNLESS AND UNTIL AN A MENDMENT IS CARRIED OUT, BY REASON OF THE REDESIGNATION ITSELF, READ WITH THE PROVISIONS OF THE GENERAL CLAUSES ACT, THE ADDL. DI RECTOR DOES NOT GET ANY STATUTORY POWER TO ISSUE AUTHORIZATION TO ISSUE WARRANT. THEREFORE, THE ADDL. DIRECTOR (INVESTIGATION) CANNO T 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, THOUG H 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 (INVESTIG ATION), 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 DELH I 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 N OT BEEN EMPOWERED TO EXERCISE OR PERFORM THE POWERS OR FUN CTIONS OF AN ASSESSING OFFICER, THE ASSESSMENT FRAMED BY HIM WAS ILLEGAL AND VOID AB INITIO. 21 5.5 SIMILAR VIEW HAS ALSO BEEN EXPRESSED IN THE CAS E OF CITY GARDEN VS. ITO (SUPRA) WHEREBY IT WAS HELD AS UNDER: THE REVENUES WHICH HAS ALSO PLACED ITS WRITTEN SU BMISSIONS ON RECORD, STAND THAT THE JT. CIT, SRI GANGANAGAR, HAD JURISDICTION TO ASSESS THE ASSESSEE U/S 120 OF THE ACT, THUS, CANNO T BE ACCEPTED I.E., IN THE ABSENCE OF A SPECIFIC ORDER ISSUED IN PURSUANCE TO SECTION 120(4)(B) SPECIFICALLY AUTHORIZING HIM TO EXERCISE THE POWERS AND PERFORM THE FUNCTIONS AS CONFERRED ON OR ASSIGNED T O AN AO BY OR UNDER THE ACT, OR A NOTIFICATION U/S 120(6) OF THE ACT. 5.6 APPLYING THE ABOVE STATUTORY POSITION TO THE FA CTS OF THE CASE OF THE APPELLANT, IT IS AN UNDISPUTED POSITION AND NOT CHA LLENGED BY THE REVENUE IN THE PRESENT APPEAL EITHER BY PLACING ON RECORD ANY ORDER OR ANY NOTIFICATION SUPPORTING THE POSITION THAT AN ORDER WAS MADE UNDE R SECTION 120(4)(B) OF THE ACT SO AS TO CONFER JURISDICTION OF THE ADDITIO NAL CIT TO EXERCISE THE POWERS OR PERFORM THE FUNCTIONS OF AN ASSESSING OFF ICER UNDER SECTION 2(7A) OF THE ACT READ WITH SECTION 120(4)(B) OF THE ACT. 5.7 IN VIEW OF THE ABOVE FACTUAL AND JUDICIAL POSIT ION, WE ARE OF THE VIEW THAT THE ORDER OF ASSESSMENT SO FRAMED IS WITHOUT J URISDICTION IN AS MUCH AS THE ADDITIONAL CIT DID NOT HAVE THE REQUISITE MANDA TE POWER UNDER THE LAW TO FRAME THE IMPUGNED ASSESSMENT UNDER SECTION 143( 3) OF THE ACT. 22 6. THE LEARNED CIT(A) HAS HOWEVER SUPPORTED THE VAL IDITY OF AN ORDER OF ASSESSMENT ON THE BASIS OF AN ORDER DATED 1.8.2007 UNDER SECTION 120(2) OF THE ACT PASSED BY THE LEARNED CIT-2, NEW DELHI. THE SAID ORDER AS EXTRACTED BY THE LEARNED CIT(A) READS AS UNDER: IN APPRECIATION OF ORDER NO. CIT-II/2001-02/509 DA TED 01.08.2001 AND CIT-II/U/S 122(2)/2001-02/992 AND IN EXERCISE O F THE POWERS CONFERRED BY SUB-SECTION (2) OF SEC. 120 OF THE INC OME TAX ACT, 1961 AND IN SUPERSESSION OF ALL EARLIER NOTIFICATION (S) /ORDERS, EXCEPT AS RESPECTS THING DONE OR OMITTED TO BE DONE BEFORE SU CH SUPERSESSION. I, THE COMMISSIONER OF INCOME-TAX, DELHI-II, NEW DELHI , IN PURSUANCE OF THE NOTIFICATION ISSUED BY THE CENTRAL BOARD OF DIR ECT TAXES VIDE NOTIFICATION NO. 732(E) DATED 31.07.2001 AND NOTIFI CATION NO. 267 OF 2001 DATED 17.09.2001 ISSUED BY CENTRAL BOARD OF DI RECT TAXES, NEW DELHI HAVING BEEN SO AUTHORIZED, HEREBY DIRECT THAT THE ADDITIONAL JOINT COMMISSIONER OF INCOME-TAX SPECIFIED IN COLUM N (3) OF SCHEDULE-1, HERETO ANNEXED, SHALL EXERCISE THE POWE RS AND PERFORM THE FUNCTIONS IN RESPECT OF SUCH CASES OR CLASSES O F CASES SPECIFIED IN THE CORRESPONDING ENTRIES IN COLUMN (6) OF THE SUCH SCHEDULE-I, IN RESPECT OF SUCH PERSONS OR CLASSES OF PERSONS SPECI FIED IN THE CORRESPONDING ENTRIES IN COLUMN (5) OF THE SUCH SCH EDULE-I IN SUCH TERRITORIAL AREAS SPECIFIED IN THE CORRESPONDING EN TRIES IN COLUMN (4) OF THE SAID SCHEDULE-I. THIS ORDER SHALL TAKE EFFECT FROM 01.08.2007. 23 6.1 IT HAS BEEN NOTED BY LEARNED CIT(A) THAT IN SCH EDULE I OF THE ABOVE MENTIONED ORDER, THE JURISDICTION OF THE ADDITIONAL CIT, RANGE 6, NEW DELHI IS STATED CLEARLY AS IN THE CASE OF COMPANIES REGI STERED UNDER THE COMPANIES ACT, 1956 WITH THE NAME BEGINNING WITH THE ANY OF T HE EXPRESSIONS M DOT, MA TO MN ALPHABETS. THE PERUSAL OF THE ABOVE ORDER DATED 1.8.2007 WOULD SHOW THAT IT REFERS TO NOTIFICATION NO. 267/2001 DA TED 17.9.2001 WHICH READS AS UNDER: SECTION 120 OF THE INCOME-TAX ACT, 1961 JURISDICT ION OF INCOME-TAX AUTHORITIES NOTIFICATION NO. 267/2001 [F.NO. 187/5/2001-ITAT-I ] DATED 17-9- 2001 IN EXERCISE OF THE POWERS CONFERRED BY CLAUSE (B) O F 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 JOIN T COMMISSIONERS OF INCOME-TAX OR THE JOINT DIRECTORS OF INCOME-TAX, SH ALL EXERCISE THE POWERS AND FUNCTIONS OF THE ASSESSING OFFICER, IN R ESPECT 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 COMMISSIONER OF INCOME-TAX ARE AUTHORISED BY THE CO MMISSIONER 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 PUBLISHE D IN THE GAZETTE OF INDIA, PART II, SECTION 3, SUB-SECTION (II), EXT RAORDINARY. 6.2 FURTHERMORE WE NOTICE THE LEARNED CIT(A) HAS AL SO HELD THAT SECTION 120(2) EMPOWERS THE BOARD TO DIRECT ANY OTHER INCOM E TAX AUTHORITY TO ISSUE ORDERS TO EXERCISE THE POWERS OF ANY OTHER IN COME TAX AUTHORITY AND 24 ORDER U/S 120(2) IS REQUIRED TO BE ISSUED BY LEARNE D CCIT/CIT UNDER THE DIRECTIONS OF THE BOARD TO GIVE JURISDICTION OF ASS ESSING OFFICER TO ADDL. CIT AND JOINT COMMISSIONER OF INCOME TAX FOR A SPECIFIE D AREA OF PERSONS. IT HAS THUS BEEN CONCLUDED THAT SECTION 120(2) IS A LA RGER AND BROADER SECTION MAKING ANY INCOME TAX AUTHORITY AS AO AND THEREFORE , WHEN A PARTICULAR INCOME TAX AUTHORITY IS EMPOWERED AS AO U/S 120(2) THERE MAY NOT BE ANY NECESSITY TO PASS ANOTHER ORDER U/S 120(4)(B) OF TH E ACT. IN OTHER WORDS HE HAS HELD THAT SECTION 120(2) IS A COTERMINOUS TO SE CTION 120(4)(B) OF THE ACT. 6.3 TO APPRECIATE THE ABOVE, WE SEEK TO NOTE THE PR OVISIONS CONTAINED IN SECTION 120(1) TO 120(3) WHICH READS AS UNDER: 120. (1) INCOME-TAX AUTHORITIES SHALL EXERCISE ALL OR ANY OF THE POWERS AND PERFORM ALL OR ANY OF THE FUNCTIONS CONF ERRED ON, OR, AS THE CASE MAY BE, ASSIGNED TO SUCH AUTHORITIES BY OR UNDER THIS ACT IN ACCORDANCE WITH SUCH DIRECTIONS AS THE BOARD MAY IS SUE FOR THE EXERCISE OF THE POWERS AND PERFORMANCE OF THE FUNCT IONS BY ALL OR ANY OF THOSE AUTHORITIES. [EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT ANY INCOME-TAX AUTHORITY, BEING AN AUTHORITY HIGHER IN RANK, MAY, IF SO DIRECTED BY THE BOARD, EXERCISE THE POWERS AND PERF ORM THE FUNCTIONS OF THE INCOME-TAX AUTHORITY LOWER IN RANK AND ANY S UCH DIRECTION ISSUED BY THE BOARD SHALL BE DEEMED TO BE A DIRECTI ON ISSUED UNDER SUB-SECTION (1).] (2) THE DIRECTIONS OF THE BOARD UNDER SUB-SECTION ( 1) MAY AUTHORISE ANY OTHER INCOME-TAX AUTHORITY TO ISSUE ORDERS IN W RITING FOR THE EXERCISE OF THE POWERS AND PERFORMANCE OF THE FUNCT IONS BY ALL OR ANY OF THE OTHER INCOME-TAX AUTHORITIES WHO ARE SUBORDI NATE TO IT. 25 (3) IN ISSUING THE DIRECTIONS OR ORDERS REFERRED TO IN SUB-SECTIONS (1) AND (2), THE BOARD OR OTHER INCOME-TAX AUTHORITY AU THORISED BY IT MAY HAVE REGARD TO ANY ONE OR MORE OF THE FOLLOWING CRI TERIA, NAMELY : (A) TERRITORIAL AREA; (B) PERSONS OR CLASSES OF PERSONS; (C) INCOMES OR CLASSES OF INCOME; AND (D) CASES OR CLASSES OF CASES. 6.4 SECTION 120(1) PROVIDES THAT INCOME TAX AUTHORI TIES SHALL EXERCISE ALL OR ANY OF THE POWERS AND PERFORM ALL OR ANY OF THE FUNCTIONS CONFERRED ON, OR, AS THE CASE MAY BE, ASSIGNED TO SUCH AUTHORITIES BY OR UNDER THIS ACT IN ACCORDANCE WITH SUCH DIRECTIONS AS THE BOARD MAY IS SUE FOR THE EXERCISE OF THE POWERS AND PERFORMANCE OF THE FUNCTIONS BY ALL OR ANY OF THOSE AUTHORITIES. THUS SECTION 120(1) STIPULATES THAT P OWERS AND FUNCTIONS OF AN INCOME TAX AUTHORITY SHALL BE CONFINED AND RESTRICT ED TO THE POWERS AND FUNCTIONS CONFERRED OR ASSIGNED BY BOARD UNDER THE ACT. FURTHER SECTION 120(2) ENABLES THE BOARD U/S 120(1) TO EVEN AUTHORI ZE AN INCOME TAX AUTHORITY TO ISSUE AN ORDER IN WRITING FOR EXERCISE OF POWERS AND FUNCTION BY SUBORDINATE INCOME TAX AUTHORITIES. IN OTHER WORDS , SECTION 120(2) DOES NOT IN ANY MANNER PROVIDE THAT CIT CAN AUTHORIZE AN ADD ITIONAL COMMISSIONER OF INCOME TAX TO PERFORM THE FUNCTIONS AND, EXERCIS E THE POWERS OF AN ASSESSING OFFICER. ON THE CONTRARY, WE HAVE ALREAD Y HELD ABOVE THAT SECTION 2(7A) IS EXPLICIT IN AS MUCH AS THAT SECTIO N 120(1)/120(2) APPLY TO 26 DEPUTY COMMISSIONER OF INCOME, ASSISTANT COMMISSION ER OF INCOME TAX, ADDITIONAL COMMISSIONER OF INCOME TAX OR DEPUTY DIR ECTOR OF INCOME TAX. 7. HAVING REGARD TO STATUTORY POSITION THE FINDING OF THE LEARNED CIT(A) IS NOT IN ACCORDANCE WITH LAW. DURING THE COURSE O F ARGUMENTS THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE ORD ER DATED 1.8.2007 BY CIT, DELHI-II, NEW DELHI IS NOT AN ORDER U/S 120(4)(B) O F THE ACT AND IS AN ORDER U/S 120(2) OF THE ACT MOREOVER THERE ARE NO DIRECT ION IN THE SAID ORDER SO AS TO CONFER AND ASSIGN THE ADDITIONAL COMMISSIONER WI TH THE POWERS OF AN ASSESSING OFFICER AND EXERCISE THE FUNCTIONS OF AN ASSESSING OFFICER. 7.1 ON CAREFUL CONSIDERATION WE FIND MERIT IN THE S AID SUBMISSION. THIS ORDER APPARENTLY IS NEITHER AN ORDER UNDER SECTION 120(4)(B) OF THE ACT AND NOR IT OTHERWISE DIRECTS THE ADDITIONAL COMMISSIONE R TO EXERCISE OR PERFORM ALL OR ANY OF THE POWERS AND FUNCTIONS CONFERRED ON OR ASSIGNED TO AN ASSESSING OFFICER UNDER THE ACT. AS REGARDS THE NO TIFICATION NO. 267/2001 DATED 17.9.2001 WE NOTICE THAT SUCH NOTIFICATION BY CBDT U/S 120(4)(B) OF THE ACT DIRECTS THAT JOINT COMMISSIONER OF INCOME T AX OR JOINT DIRECTOR SHALL EXERCISE THE POWER AND FUNCTION OF AN ASSESSI NG OFFICER IN RESPECT OF SPECIFIED CASES IN RESPECT OF WHICH SUCH JOINT COMM ISSIONER OR AUTHORIZED BY COMMISSIONER OF INCOME TAX VIDE CBDT NOTIFICATIO N DATED 14.9.2001 27 AND 31.7.2001. IT IS THUS APPARENT THAT THE SAID N OTIFICATION IS APPLICABLE IN RESPECT OF JOINT COMMISSIONER AUTHORIZED BY COMMISS IONER OF INCOME TAX UNDER NOTIFICATION AS SPECIFIED THEREIN AND NO MORE . IN THE INSTANT CASE IT IS ADMITTED POSITION THAT NONE OF THE NOTIFICATIONS AS SPECIFIED THEREIN CONFER POWERS OF AN ASSESSING OFFICER TO THE ADDITIONAL CO MMISSIONER OF INCOME TAX, RANGE 6, NEW DELHI. 7.2 WE THUS FIND MERIT IN THE CLAIM OF THE APPELLAN T THAT IN ABSENCE OF AN ORDER U/S 120(4)(B) OF THE ACT THE ADDL. CIT RANGE- 6, NEW DELHI LACKS JURISDICTION TO EXERCISE THE FUNCTIONS OF THE AO AN D THEREFORE CONSEQUENTLY THE ORDER OF ASSESSMENT FRAMED IS WITHOUT JURISDICT ION. 8. THE LEARNED CIT(A) HAS RELIED ON THE JUDGMENT IN THE CASE OF CIT VS. BRITISH INDIA CORPORATION LTD. 337 ITR 64 (ALL) TO HOLD THAT QUESTION OF JURISDICTION OF THE ASSESSING AUTHORITY CANNOT BE D ISPUTED AFTER THE COMPLETION OF THE ASSESSMENT PROCEEDINGS. THE FACT S IN THE CASE WERE THAT ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSM ENT YEAR 1974-75 WHICH WAS PROCESSED BY THE ASSESSING OFFICER, NAMELY, INC OME TAX OFFICER, CENTRAL CIRCLE-I, KANPUR WHO COMPLETED THE ASSESSME NT UNDER SECTION 143(3)/144B OF THE ACT ON SEPTEMBER 7, 1977 AFTER M AKING CERTAIN ADDITIONS AND DISALLOWANCES TO THE RETURNED INCOME. ON APPEA L ASSESSEE CONTENDED 28 THAT THE ASSESSING AUTHORITY HAD NO JURISDICTION TO PASS THE ASSESSMENT ORDER IN AS MUCH AS THE ASSESSMENT FILE STOOD TRANSFERRED FROM INCOME TAX OFFICER, CENTRAL CIRCLE-I, KANPUR TO THE INSPECTING ASSISTAN T COMMISSIONER RANGE-D, KANPUR BY THE ORDER DATED JULY 1, 1977 AND THUS THE ASSESSMENT ORDER BY THE INCOME TAX OFFICER WAS VOID-AB-INITIO. THE TRIBUNAL ALLOWED THE APPEAL ON THE GROUND THAT THE INCOME TAX OFFICER, CENTRAL CIR CLE-I HAD NO JURISDICTION IN VIEW OF THE TRANSFER ORDER DATED JULY 1, 1977 TR ANSFERRING THE CASE TO THE INSPECTING ASSISTANT COMMISSIONER. THE HONBLE HIG H COURT IN LIGHT OF THE ABOVE FACTS HELD AS UNDER: 18. IT IS REASONABLE TO DEDUCE THAT THE QUESTION OF JURISDICTION OF THE ASSESSING AUTHORITY CANNOT BE DISPUTED AFTER THE CO MPLETION OF THE ASSESSMENT PROCEEDINGS. ALTERNATIVELY, IF SUCH A QU ESTION ARISES, THE SAID QUESTION CAN BE ADDRESSED BY THE COMMISSIONER OR THE BOARD, AS THE CASE MAY BE, IN VIEW OF SUB-SECTION (4) OF SECT ION 124 AND THIS BY NECESSARY COROLLARY EXCLUDES THE JURISDICTION OF TH E FIRST APPELLATE AUTHORITY OR THE COURT. 8.1 IT IS APPARENT THAT THE SAID JUDGMENT HAS NO AP PLICATION TO THE FACTS OF THE CASE AS HERE IS A CASE WHERE THE ISSUE IS ABOUT THE LACK OF JURISDICTION OF ADDITIONAL COMMISSIONER OF INCOME TAX TO EXERCISE T HE POWERS AND PERFORM THE FUNCTIONS OF AN ASSESSING OFFICER UNDER THE ACT . ONCE AUTHORITY LACKS JURISDICTION THEN IT IS WELL SETTLED IT CANNOT BE C ONFERRED PARTICIPATION OR EVEN ELAPSE OF TIME. MOREOVER EVEN FACTUALLY IN THE SAI D CASE IT WAS FOUND THAT 29 ASSESSEE HAD NOT PROVIDED THE DATE OF COMMUNICATION OF THE ORDER U/S 127 OF THE ACT AND AS SUCH THE HONBLE COURT HELD AS UNDER : 23. IT HAS NOT COME ON RECORD, NOT DISCLOSED BY T HE ASSESSEE AT LEAST, EVEN BEFORE THE FIRST APPELLATE AUTHORITY IN THE ADDITIONAL MEMO OF APPEAL AS TO WHEN HE GOT THE KNOWLEDGE OF THE TR ANSFER ORDER DATED JULY 1, 1977. THE OBSERVATION OF THE TRIBUNAL THAT IT IS ADMITTED THAT THE ORDER OF TRANSFER ORDER IS EFFECTIVE FROM JULY 1, 1977 IS THEREFORE, UNCALLED FOR. IT HAS MISDIRECTED ITSELF. THE TRIBUN AL HAS PROCEEDED ON A WRONG FOOTING THAT IN THE ABSENCE OF DATE OF COMM UNICATION OF THE ORDER TO THE ASSESSEE, THE ASSESSEE COULD RAISE THE PLEA OF JURISDICTION IN APPEAL AS IT IS THE FIRST OPPORTUNITY. THE BURDE N WAS UPON THE ASSESSEE TO STATE SPECIFICALLY WHEN THE ORDER OF TH E TRANSFER WAS RECEIVED BY IT, WHICH IT FAILED TO DISCHARGE. THE O RDER OF THE TRIBUNAL IS, THEREFORE, ALSO BAD AS IT PROCEEDS ON ASSUMPTIO NS AND PRESUMPTIONS. THE DATE OF ACTUAL COMMUNICATION OF T HE TRANSFER ORDER WAS WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE AN D IT WAS ITS DUTY TO DISCLOSE THE SAME. 8.2 IN FACT THE COURT FINALLY CONCLUDED IN THE SAID JUDGMENT IS AS UNDER: 27. THE CASE ON HAND STANDS STILL ON A WEAK FOOTIN G INASMUCH AS THE INCOME-TAX OFFICER, CC-I HAD THE JURISDICTION WHEN THE ASSESSMENT PROCEEDINGS COMMENCED AND A DRAFT ASSESSMENT ORDER WAS SUBMITTED TO THE INSPECTING ASSISTANT COMMISSIONER. SUBSEQUEN T CHANGE IN THE JURISDICTION IF ANY UNLESS BROUGHT TO THE NOTICE OF THE AUTHORITY CONCERNED, WILL NOT IN ANY MANNER VITIATE THE ASSES SMENT ORDER IN THE ABSENCE OF ANY OBJECTION WITH REGARD TO LACK OF JUR ISDICTION BY THE ASSESSEE. IT IS A CASE WHERE BOTH THE ASSESSING OFF ICER AND THE ASSESSEE PROCEEDED AS IF THERE IS NO TRANSFER ORDER TRANSFERRING JURISDICTION. 8.3 THE ABOVE PROPOSITION IF APPLIED SPECIFICALLY S UPPORT THE PLEA OF ASSESSEE I.E. IN ABSENCE OF JURISDICTION ORDER MADE BY ADDITIONAL COMMISSIONER OF INCOME TAX IS A NULLITY. 30 8.4 THE LEARNED CIT(A) HAS ALSO REFERRED TO THE JUD GMENT IN THE CASE OF MUKTI PROPERTIES (P) LTD. VS. CIT 344 ITR 177 (CAL) . IN THE SAID JUDGMENT THEIR LORDSHIPS HAVE HELD ONCE AN ISSUE HAS NOT BEE N RAISED BEFORE THE FIRST APPELLATE AUTHORITY THEN THE APPELLANT IS STOPPED F ROM RAISING THE SAID ISSUE AT THE LATER STAGE. THE SAID JUDGMENT IS ALSO NOT APPLICABLE AS THIS ISSUE FROM RAISED BY THE APPELLANT BEFORE THE TRIBUNAL AND THE TRIBUNAL HAD THEN DIRECTED THE CIT(A) TO ADJUDICATE THE SAID ISSUE ON MERITS. THE SAID ORDER OF TRIBUNAL HAS BECAME FINAL AND THEREFORE HAVING REGA RD TO THE ABOVE THE SAID JUDGMENT DOES NOT SUPPORT THE CASE OF THE REVENUE. 8.5 FURTHER MORE RELIANCE ON PROVISIONS CONTAINED I N SECTION 124 OF THE ACT IS OF NO HELP TO THE REVENUE IN AS MUCH AS HERE IS A CASE WHERE THE ADDITIONAL COMMISSIONER OF INCOME TAX LACKS JURISDI CTION AND IS NOT A CASE OF EITHER IRREGULAR EXERCISE OF JURISDICTION OR TER RITORIAL JURISDICTION. THE HONBLE DELHI HIGH COURT IN THE CASE OF VALVOLINE C UMMINS LTD. VS. DCIT 307 ITR 103 HAS HELD AS UNDER: THIS IS WELL SETTLED, THAT MERE ACQUIESCENCE IN TH E EXERCISE OF POWER BY A PERSON WHO DOES NOT HAVE JURISDICTION TO EXERC ISE OF POWER BY A PERSON WHO DOES NOT HAVE JURISDICTION TO EXERCISE T HAT POWER, CANNOT WORK AS AN ESTOPPELS AGAINST HIM. 31 9. ANOTHER CONTENTION SPECIFICALLY RAISED IS THAT T HERE IS NO TRANSFER ORDER U/S 127 OF THE ACT FROM TRANSFERRING THE CASE FROM THE DCIT TO THE ADDL. CIT, RANGE 6, NEW DELHI. THE LEARNED CIT(A) HAS HE LD THAT IN THE CASES OF TRANSFER OF CASES TO ANOTHER AO AFTER ISSUE OF NOTI CE U/S 143(2) OF THE ACT BY ANOTHER AO, THE ISSUE INVOLVES THE INTERPRETATION O F CONCURRENT JURISDICTION WHICH IS BEYOND THE SCOPE OF THIS APPEAL WITHIN THE RESTRICTED DIRECTIONS OF THE HONBLE ITAT. HE HAS HELD THAT, IN MY CONSIDE RED OPINION, SINCE BOTH ADDL. CIT RANGE-6 AND DCIT CIRCLE-6(1) WORKS AS SUB ORDINATE OFFICER TO THE SAME CIT AND THE CIT HAVING ENTIRE TERRITORIAL JURI SDICTION, THE PASSING OF ASSESSMENT ORDER BY THE ADDL. CIT AFTER ISSUE OF NO TICE 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 HONBL E 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 BET WEEN THE ADDITIONAL COMMISSIONER AND THE DEPUTY COMMISSIONER, LEARNED C OUNSEL FOR THE ASSESSEE RELIED UPON A DECISION OF THE CALCUTTA HIG H COURT IN BERGER PAINTS INDIA LTD. V. ASSTT. CIT [2000] 246 ITR 133 1 . THE CALCUTTA HIGH COURT HAD EXPLAINED THE MEANING OF THE EXPRESS ION CONCURRENT TO MEAN TWO AUTHORITIES HAVING EQUAL POWERS TO DEAL WITH A SITUATION - BUT THE SAME WORK CANNOT BE DIVIDED BETWEEN THEM. T HIS IS WHAT THE CALCUTTA HIGH COURT HAD TO SAY : 32 '. . . 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 INVOKE D. 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. . . .' (P. 1 41) 29. 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 CONCU RRENTLY, EITHER ONE OF THEM CAN EXERCISE THAT POWER AND ONCE A DECI SION IS TAKEN TO EXERCISE THE POWER BY ANY ONE OF THOSE AUTHORITIES, THAT EXERCISE MUST BE TERMINATED BY THAT AUTHORITY ONLY. IT IS NOT THA T ONE AUTHORITY CAN START EXERCISING A POWER AND THE OTHER AUTHORITY HA VING CONCURRENT JURISDICTION CAN CONCLUDE THE EXERCISE OF THAT POWE R. THIS PERHAPS MAY BE PERMISSIBLE IN A SITUATION WHERE BOTH THE AU THORITIES JOINTLY EXERCISE POWER BUT IT CERTAINLY IS NOT PERMISSIBLE WHERE BOTH THE AUTHORITIES CONCURRENTLY EXERCISE POWER. ONE EXAMPL E THAT IMMEDIATELY COMES TO THE MIND IS THAT OF GRANT OF A NTICIPATORY BAIL. BOTH THE SESSIONS JUDGE AND THE HIGH COURT HAVE CON CURRENT POWER. IT IS NOT AS IF A PART OF THAT POWER CAN BE EXERCIS ED BY THE HIGH COURT AND THE BALANCE POWER CAN BE EXERCISED BY THE SESSI ONS JUDGE. IF THE HIGH COURT IS SEIZED OF AN APPLICATION FOR ANTICIPA TORY 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 S ESSIONS JUDGE IN RESPECT OF THE SAME APPLICATION FOR ANTICIPATORY BA IL. 33 30. IN THE FACTS OF THE PRESENT CASE, SINCE THE ADD ITIONAL COMMISSIONER HAD EXERCISED THE POWER OF AN ASSESSING OFFICER, HE WAS REQUIRED TO CONTINUE TO EXERCISE THAT POWER TILL HIS JURISDICTI ON IN THE MATTER WAS OVER. HIS JURISDICTION IN THE MATTER WAS NOT OVER M ERELY ON THE PASSING OF THE ASSESSMENT ORDER BUT IT CONTINUED IN TERMS O F 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 ASSESS MENT ORDER, THE ADDITIONAL COMMIS- SIONER SEEMS TO HAVE WASHED HIS HANDS OF THE MATTER AND LEFT IT TO THE DEPUTY COMMISSIONER TO DE CIDE 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 JUDIC IAL POSITION THAT ASSESSMENT HAS TO BE COMPLETED BY THE AUTHORITY WHO HAS INITIATED THE PROCEEDINGS FOR MAKING ASSESSMENT AND ANY OTHER AUT HORITY 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(1), NEW DELHI TO TH E ADDITIONAL CIT, RANGE-6, NEW DELHI AND THEREFORE IT IS QUITE EVIDEN T THAT THE ADDITIONAL CIT, RANGE-6 TOOK OVER THE ASSESSMENT PROCEEDINGS WITHOU T THERE BEING AN ORDER U/S 127(1). IN THE CASE OF PRACHI LEATHERS PVT. LT D. (SUPRA), IT HAS BEEN HELD AS UNDER: 19. WE ARE FURTHER OF THE OPINION THAT THE NOTICE U NDER SECTION 143(2) OF THE ACT HAVING BEEN ISSUED BY THE INCOM E-TAX OFFICER, 34 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 ASSESSEES CASE FROM INCOME-TAX OFFICER, RANGE-6(2), KANPUR TO THAT OFFICER UNDER SECTION 127(4) OF THE ACT, BUT SO FAR AS PRESENT CA SE IS CONCERNED, THE REVENUE HAS NOT BROUGHT TO OUR NOTICE ANY ORDER UND ER SECTION 127 PASSED AFTER 6.8.2002 TRANSFERRING JURISDICTION OV ER THE ASSESSEES CASE FROM THE INCOME-TAX OFFICER, RANGE 6(2), KAN PUR TO THE ADDL. CIT, RANGE-6,KANPUR AND THEREFORE, THE ASSESSMENT FRAMED BY THE ADDL.CIT, RANGE-6,KANPUR IRRESPECTIVE OF THE FACT A S TO WHETHER HE WAS AUTHORIZED TO PERFORM THE FUNCTIONS OF AN AO OR NOT, IS ILLEGAL AND VOID AB INITIO FOR WANT OF JURISDICTION. CONSEQUEN TLY, WE ARE OF THE OPINION THAT THE ASSESSMENT ORDER IN THE PRESENT CA SE DATED 31.3.2003 PASSED BY THE ADDL.CIT, RANGE (6), KANPUR WAS ILLE GAL 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 I N LAW FOR WANT OF JURISDICTION. 10. FOR THE REASONS AFORESAID WE HOLD THAT THE ORDE R OF ASSESSMENT DATED 29.12.2008 WAS WITHOUT JURISDICTION AND THEREFORE I S QUASHED AS SUCH. IN RESULT, GROUND NOS. 1 AND 2 ARE ALLOWED. 35 11. GROUND NO(S) 3 AND 4 OF GROUNDS OF APPEAL ARE R EGARDING TREATMENT OF LONG-TERM CAPITAL GAIN AND, SHORT-TERM CAPITAL G AIN DECLARED BY THE APPELLANT COMPANY AS BUSINESS INCOME OF THE APPELLA NT COMPANY. HOWEVER SINCE WE HAVE QUASHED THE ASSESSMENT ORDER ITSELF, THE ISSUES RAISED BY THE ASSESSEE BY WAY OF OTHER GROUNDS OF APPEAL DO NOT S URVIVE, AND, THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. GROUND NO. 5 OF GROU ND OF APPEAL IS REGARDING LEVY OF INTEREST WHICH IS CONSEQUENTIAL I N NATURE. 12 IN THE RESULT APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.09.2015 SD/- SD/- ( L. P. SAHU ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 /09/2015 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 36 DATE DRAFT DICTATED ON COMPUTER 22.09.2015 DRAFT PLACED BEFORE AUTHOR 22.09.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 22.09.20 15 APPROVED DRAFT COMES TO THE SR.PS/PS 24.09.2015 KEPT FOR PRONOUNCEMENT ON 22.09.2015 FILE SENT TO THE BENCH CLERK 28.09.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.