Assessment order void without proper procedure, Commissioner lacks jurisdiction for revision.

The Tribunal held that the assessment order passed without following the mandatory procedure under Section 144C was null and void, thus not subject to revision under Section 263. Citing relevant case law, the Tribunal concluded the Commissioner lacked jurisdiction to revise a null order. As the issue was already under appeal, the Commissioner could not intervene. Consequently, the appeals by the assessee were allowed, and the orders under Section 263 and the assessment order were quashed.

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Issues Involved:
1. Validity of the order passed under Section 263 of the Income Tax Act, 1961.
2. Compliance with the provisions of Section 144C of the Income Tax Act, 1961.
3. Jurisdiction of the Commissioner under Section 263 of the Income Tax Act, 1961.
4. Prejudice to the interests of revenue.

Detailed Analysis:

1. Validity of the Order Passed Under Section 263:
The assessee contested the validity of the order passed by the Commissioner of Income Tax (CIT) under Section 263 of the Income Tax Act, 1961. The CIT had invoked Section 263, holding that the assessment order dated 14.12.2011 passed by the Assessing Officer (AO) was erroneous and prejudicial to the interests of revenue. The assessee argued that the AO's order was null and void as it was passed without following the mandatory procedure under Section 144C of the Act.

2. Compliance with the Provisions of Section 144C:
The AO had completed the assessment under Section 143(3) without issuing a draft assessment order as required under Section 144C, thereby denying the assessee the right to raise objections before the Dispute Resolution Panel (DRP). The Commissioner noted that the AO's failure to forward a draft of the proposed assessment order to the assessee was a violation of the statutory provisions, making the assessment order erroneous and prejudicial to the interests of revenue.

3. Jurisdiction of the Commissioner Under Section 263:
The Commissioner argued that under Section 263, he had the authority to revise any order passed by the AO if it was erroneous and prejudicial to the interests of revenue. The Commissioner relied on various judicial precedents to support his view that an order passed without following the provisions of law could be revised under Section 263. The assessee contended that since the assessment order was null and void, it could not be revised under Section 263.

4. Prejudice to the Interests of Revenue:
The assessee argued that the order passed by the AO was not prejudicial to the interests of revenue as the demand after giving effect to the order under Section 263 would be nil. The Commissioner, however, held that the non-compliance with the statutory provisions by the AO was prejudicial to the interests of revenue and warranted revision under Section 263.

Conclusion:

The Tribunal held that the assessment order passed by the AO without following the mandatory procedure under Section 144C was null and void. Consequently, such an order could not be revised under Section 263. The Tribunal relied on the judgments of the Hon'ble High Court of Andhra Pradesh in Zuari Cements Ltd. and the Hon'ble Madras High Court in Vijay Television Pvt. Ltd., which held that non-compliance with Section 144C renders the assessment order null and void. The Tribunal concluded that the Commissioner had no jurisdiction to revise a null and void order under Section 263.

The Tribunal also noted that the assessee had already raised the issue of the assessment order being void in its appeal before the CIT(A), which was pending. Therefore, the Commissioner could not exercise jurisdiction under Section 263 while the issue was already under appeal.

In light of the above, the Tribunal allowed the appeals filed by the assessee and quashed the orders passed by the Commissioner under Section 263 and the assessment order passed by the AO.

Order:
Both appeals of the assessee were allowed, and the orders passed by the Commissioner under Section 263 and the assessment order passed by the AO were quashed.

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