The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal as the jurisdiction challenge of the assessing authority was not filed within one month as per Section 124(3) of the Income Tax Act, 1961.
Mr. Sandeep Chalapathy representing the assessee submitted that in the absence of order under Section 124(b), the assessment order passed by the AO is without jurisdiction. Further submitted that, there was no order under section 120(4)(b) of the Income Tax Act, so as to confer jurisdiction on the JCIT, Davengare to frame the impugned assessment.
It was also submitted that in absence of order under section 120(4)(b) read with section 2(7A) of the Income Tax Act, the JCIT, Davengare cannot exercise the power and perform the functions of the Assessing Officer. The assessment thus framed by the JCIT Davengare is without jurisdiction and unsustainable.
On the contrary, Mr Subramanian vehemently relied on Notification No. 267/2001 dated 17.09.2001 in support of the contention that the Joint Directors of Income Tax shall exercise the powers and functions of the AO in respect of territorial area or persons or class of persons in respect of which such Joint Commissioner of Income Tax are by the Commissioner of Income Tax.
The bench noted that the income tax authorities shall exercise all or any of the powers and perform all or any 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 issue for the exercise of the powers and performance of the functions by all or any of those authorities. Thus, section 120(1) stipulates that powers and functions of an income tax authority shall be confined and restricted to the powers and functions conferred or assigned by the Board under the Income Tax Act.
Further, the Section 120(4) is in respect of the directions or orders issued under Section 120(1) or (2) and casts a limitation of the assessee to challenge the jurisdiction of the authority who has passed the assessment order within a period of one month, sub clause (3) of 124 of the Income Tax Act, was very clear on this limitation expressed by the legislature.
Recently, the Karnataka High Court in case of Adarsh Developers vs DCIT also concurred with the same view in respect of the challenge of jurisdiction of the assessing authority who have passed the assessment order to be limited to one month.
The two member bench of the tribunal comprising Chandra Poojari ( Accountant member ) and Beena Pillai ( Judicial member ) observed that this issue had already become time barred by virtue of the provisions of Section 124(3) of the Income Tax Act. The tribunal, therefore do not find any merit in the contentions raised by the assessee at this juncture belatedly.
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