Whether time limit to challenge jurisdiction u/s 124(3) is only in respect of territory jurisdiction?

Respected Members

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Short note of today's case law for quick reference:

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[2025] 121 ITR (Trib) 641 (Mumbai)

[Before the Income-Tax Appellate Tribunal Mumbai "H" Bench]

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Income-Tax Officer (International Taxation)

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Tata Steel Ltd.

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(and vice versa)

B. R. Baskaran (Accountant Member) and Sandeep Singh Karhail (Judicial Member)

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June 7, 2024??

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1) Per section 2(7A) of the Income-tax Act, 1961, the Additional Commissioner 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), in terms of which the 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 A.O. shall be exercised or performed by the Additional Commissioner.

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2) For A.Y. 2007-08, the assessee raised additional grounds challenging the jurisdiction of the Additional Commissioner to pass the assessment order under section 143(3) read with section 144C(13) in the absence of orders passed under section 120(4)(b) or 127.

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3) It was held that any challenge to the jurisdiction of the authority under the Act to pass any order or issue any notice or initiate any proceeding against the assessee was a pure question of law, particularly when such an authority had passed the assessment order computing the assessee's tax liability, which formed the entire basis of the appeal and went to the very root of the matter.

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4) Since the statutory notices and the notification conferring power on the concerned officer to act as the assessee's A.O. constituted part of the assessment record, there was no embargo on any party to raise the legal ground before the Tribunal provided the requisite material already existed on record and no further investigation into the facts was required.

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5) The tribunal has allowed raising of additional ground after a gap of as many as 10 to 15 years in a similar argument.

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6) The assessee had requested the Revenue to provide copies of the transfer orders passed u/s 127 transferring the case to or from the Deputy Commissioner from or to the Additional Commissioner.

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7) It was evident from the materials on record that the transfer orders had neither been furnished to the assessee nor placed on record.

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8) The revenue failed to produce any such order.

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9) The time for raising objection to the A.O.'s jurisdiction prescribed u/s 124(3) had a relation to the A.O.'s territorial jurisdiction and would not apply to a case where the assessee contended that the A.O.'s action was without authority of law and, therefore, wholly without jurisdiction.

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10) When the Additional Commissioner’s jurisdiction to conduct scrutiny assessment and pass the assessment order was under challenge, the Revenue is under an obligation to bring on record the copy of the order justifying the basis of the additional commissioner’s authority to exercise the power of an A.O.