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of <h1>Tribunal quashes reassessment order, deems appeal infructuous, due to invalid reliance on void order.</h1> <h3>The Income Tax Officer, Ward 11 (1), Pune Versus Magic Software Enterprises India Pvt. Ltd. and Vice-Versa</h3> The Income Tax Officer, Ward 11 (1), Pune Versus Magic Software Enterprises India Pvt. Ltd. and Vice-Versa - TMI Issues Involved:1. Condonation of delay in filing Cross Objections.2. Admission of additional Cross Objections.3. Validity of reopening assessment under section 148 of the Income Tax Act.4. Jurisdiction of the Transfer Pricing Officer (TPO) under section 92CA(3) of the Act.5. Validity of the reassessment proceedings initiated under section 147/148 of the Act.Detailed Analysis:1. Condonation of Delay in Filing Cross Objections:The assessee's Cross Objections were time-barred by 26 days. The delay was attributed to the appointment of Senior Counsel for representing the case. The tribunal found merit in the plea and condoned the delay, admitting the Cross Objections.2. Admission of Additional Cross Objections:The assessee filed additional Cross Objections challenging the reopening of assessment under section 148 of the Act, arguing that the TPO's order was void as it was issued without jurisdiction. The tribunal admitted these additional Cross Objections, considering them purely legal issues with facts already on record.3. Validity of Reopening Assessment under Section 148 of the Income Tax Act:The tribunal examined whether the Assessing Officer (AO) followed the correct procedure in reopening the assessment under section 148. The AO had relied on the TPO's order, which was issued when no assessment proceedings were pending. The tribunal noted that the AO's belief that income had escaped assessment was based on the TPO's order, which was void ab initio.4. Jurisdiction of the Transfer Pricing Officer (TPO) under Section 92CA(3) of the Act:The tribunal scrutinized the TPO's jurisdiction to pass an order under section 92CA(3) when no assessment proceedings were pending. It was established that the TPO's order was issued without proper reference from the AO, making it void. The tribunal referred to previous judgments, including Maximize Learning Pvt. Ltd. Vs. ACIT and CIT Vs. XL India Business Services (P) Ltd., which supported the view that the TPO's order issued without jurisdiction could not be the basis for reopening the assessment.5. Validity of the Reassessment Proceedings Initiated under Section 147/148 of the Act:The tribunal concluded that the reassessment proceedings were initiated to circumvent the failure to assess the income under normal provisions within the stipulated time. The AO's reliance on the TPO's void order to form a belief of income escapement was invalid. Consequently, the reasons recorded for reopening the assessment did not meet the requirements of section 147, and the AO had no jurisdiction to issue the notice under section 148. The subsequent order passed under section 143(3) r.w.s. 147 was quashed.Conclusion:The tribunal allowed the additional ground of Cross Objections, quashed the reassessment order, and deemed the Revenue's appeal infructuous. The remaining Cross Objections on merits were rendered academic and not adjudicated.
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