2015 (9) TMI 1644 - AT - Income Tax

Invalid Second Assessment Order Results in Double Assessment: Tribunal Upholds CIT(A)'s Decision

DCIT Cen Cir 5 (1) Mumbai Versus Heena N Kanakia,

The Tribunal held that the second assessment order passed by the AO was invalid and void ab initio, as it resulted in double assessment for the same ... Validity of Assessment U/s 143(3) read with section 154 passed by successor AO - AO has reviewed his own order without properly assuming jurisdiction and hence, the assessment order passed u/s.143(3) r.w.s.254 on the second occasion i.e. on 18.02.2014 is illegal and void ab- initio - HELD THAT:- It is well-settled that there cannot be two assessments in respect of total income of an assessee in one and the same A.Y. The assessee cannot be assessed twice over for the same A.Y. by framing two assessments, because there cannot be double taxation of the same income. During the existence of first order dated 16.09.2013, the second order dated 18.02.2014 could not have been passed and if passed, the same is non est. The two orders cannot exist at the same time. In this connection, I find merit in the appellant's plea [based on judgment of Hon'ble jurisdiction High Court in the case of Classic Share & Stock Braking Services Ltd. (2013 (3) TMI 516 - BOMBAY HIGH COURT) that after having passed order dated' 16.09.2013 giving effect to the order of Hon'ble ITAT, the impugned assessment order dated 18.02.2014 passed by the AO is totally illegal, void and without jurisdiction. Under these circumstances, there is no hesitation in holding that the impugned order passed by the AO is bad in law and void ab initio and the same is, therefore, annulled - Decided against revenue Issues:1. Validity of assessment order passed by the AO under section 143(3) r.w.s. 254 of the Income Tax Act after directions from ITAT for de novo assessment.2. Legality of passing two assessment orders for the same assessment year by the AO.Issue 1:The appellant filed her return of income for the assessment year (AY) 2003-04, declaring a total income of Rs. 78,900. Subsequently, a search and seizure action was conducted, leading to the AO issuing a notice u/s.153A and passing an assessment order u/s.144 r.w.s.153A determining the total income at Rs. 14,19,800. The CIT(A) confirmed the additions made by the AO, prompting the appellant to appeal to the ITAT. The ITAT, in its order dated 18.10.2012, set aside the assessment order and directed the AO to frame a de novo assessment. The AO passed an order on 16-09-2013 to give effect to the ITAT's order and issued another assessment order u/s.143(3) r.w.s.254 on 18.02.2014 determining the total income at Rs. 14,18,680. The CIT(A) held the second assessment order as bad in law. The key contention was that passing the second assessment order without proper jurisdiction was impermissible. The appellant relied on the judgment of the High Court in a similar case. The AO, however, supported the second assessment order.Issue 2:Upon analyzing the facts, it was evident that the AO had passed two orders: one to give effect to the ITAT's order and the other for assessment u/s.143(3) r.w.s.254. The appellant argued that the second assessment order was without jurisdiction as it amounted to a substantial review of the earlier order without proper assumption of jurisdiction. The CIT(A) concurred with the appellant's argument, emphasizing that there cannot be two assessments for the same assessment year, as it would lead to double taxation. Relying on legal precedent, the CIT(A) declared the second assessment order as illegal, void, and without jurisdiction. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal.In conclusion, the Tribunal found that the second assessment order passed by the AO was invalid and void ab initio, as it amounted to double assessment for the same assessment year, contravening established legal principles. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal.