By TIOL News Service

MUMBAI, MAR 15, 2019: THE issue before the bench is whether the Additional Commissioner of Income Tax is vested with the jurisdiction to assume the functions of an Assessing Officer, where no orders to such effect have been passed u/s 120(4)(b) or u/s 127(1) of the Act. NO is the verdict.

Facts of the case

THE assessee is a leading industrial conglomerate. It filed its returns for the relevant AY, declaring total income of about Rs 21.99 crores. The assessment for such AY was completed with the assessee's income being calculated at about Rs 758.60 crores, with the order being passed by the jurisdictional Additional Commissioner of Income Tax. On appeal, the CIT(A) gave partial relief to the assessee. Before the Tribunal, the assessee raised an additional ground, stating that the order passed by the Addl. CIT was bad in law as the Addl. CIT failed to show the requisite jurisdiction u/s 120(4)(b) to pass the assessment order. The assessee claimed that the Addl. CIT could assume the functions of an AO only if specific directions to such effect are issued u/s 120(4)(b). The assessee further claimed that the assessment was to be completed by that authority which had initiated the assessment proceedings and that any other authority could assume proceedings only after a proper order of transfer u/s 127(1) or 127(2). The partial relief granted by the CIT(A) triggered the present cross appeals.

On appeal, the Tribunal held that,

++ a similar issue arose in the assessee's own case for a previous AY & so the decision laid down in Tata Sons Ltd. v. ACIT. Adhering to the principle of judicial discipline and following the findings laid down therein, it is held in the present case that the Addl. CIT in the absence of a valid order u/s 120(4)(b) as well as section 127(1) of the Act could not have exercised powers of an Assessing Officer to pass the assessment order. Accordingly, the assessment order is annulled. Consequently, the appeal filed by the Revenue does not survive.

(See 2019-TIOL-643-ITAT-MUM)