TaxTMI 
TaxTMI 
2006 (4) TMI 201
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....ed deduction under section 80-I in respect of the Anola unit on dividend income. However, it appears from the reassessment order that the assessee had clarified before the Assessing Officer in the course of the reassessment proceedings that no deduction had been claimed on the dividend income. The Assessing Officer appears to have accepted the clarification. He therefore merely adopted the total income at the figure assessed originally, minus the relief given in appeal against the original assessment. No fresh demand was raised pursuant to the reassessment order. 3. The reassessment order passed as above was rectified under section 154 by order dated 22-7-2002. Here again, no fresh demand was raised and the total income assessed in the reassessment order was repeated. 4. Thereafter, the Assessing Officer issued notice under section 154 to the assessee on 14-2-2003 seeking to rectify the assessment for the year under appeal consequent upon the passing of the order under section 154 on 10-2-2003 for the assessment year 1993-94 regarding the claim under section 80-I in respect of the Anola unit. It appears that the computation of the income of the Anola unit for that year had re....
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..... All of them having been rejected by the CIT(A), the assessee has filed a further appeal to the Tribunal. 7. We have carefully considered the issue in the light of the rival arguments ably presented before us. We may straightaway say that we are not inclined to agree with the contention that the issue sought to be rectified, viz., the deduction of the brought forward losses relating to the Anola unit for being adjusted against the profits of the said unit for the year under appeal, is a debatable issue in the light of the clear provisions of sub-section (6) of section 80-I. That sub-section says that the profits of the industrial undertaking shall, for the purpose of determining the quantum of the deduction for the assessment year immediately succeeding the initial assessment year or any subsequent year, be computed 'as if such industrial undertaking ... were the only source of income of the assessee during the previous years relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made'. If this provision is applied, then it would appear unarguable that the Anola unit has to be ....
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....r section 156 of the Act only if any tax etc. is payable in consequence of any order passed under the Act. It is not denied that reassessment order passed on 28-3-2002 did not raise any demand of tax. The Assessing Officer was therefore not liable to serve any demand notice upon the assessee pursuant to the reassessment order. The issue of the demand notice on 17-5-2002 was unnecessary and has to be ignored as superfluous. In the judgment of the Calcutta High Court cited above, there was a demand raised consequent to the passing of the assessment and hence it was held that the demand notice, signed on a date after the period of limitation, and not on the same date as that of the assessment order, was signed after the period of limitation. In the present case, the factual position is different and hence the same legal consequence as in the case of the Calcutta High Court does not follow. Further, in the present case the tax computation form in ITNS 150 also shows the tax payable consequent to the reassessment order as 'nil'. It is therefore not appropriate to apply the judgment of the Calcutta High Court to the facts of the present case. 9. The second argument is that the assesse....
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....Supreme Court in Calcutta Discount Co. Ltd. v. ITO [1931] 41 ITR 191. The duty of the assessee, even under the proviso to section 147, extends only to the furnishing of the material facts. It is not for him to advice the Assessing Officer as to what inference should be drawn therefrom. The assessee, having filed the basic facts, may raise his own inference therefrom and put forth the same to the Assessing Officer which the Assessing Officer may, in his wisdom, accept or reject. But rejection of the assessee's inference from the material facts cannot be equated with furnishing of untrue or incomplete particulars necessary for the assessment. In this view of the matter, we are of the view that the reassessment order passed on 28-3-2002 is invalid, the notice under section 148 having been issued beyond the period of limitation prescribed under the proviso to section 147. It is now well-settled that the issue of a valid notice under section 148 is a condition precedent for the validity of the reassessment - please see Supreme Court decision in the case of CIT v. Kurban Hussain Ibrahimji Mithiborwala [1971] 82 ITR 821. Therefore the assessee is right in saying that the limitation for re....
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.... v. Ram Prakash AIR 1977 SC 1201 and Chiranjilal Shrilal Goenka v. Jasjit Singh [1993] 2 SCC 507. In Raja Jagadambika Pratap Narain Singh v. CBDT [1975] 100 ITR 698, the Supreme Court held that 'merely because an order has been passed by the Officer and has not been appealed against, it does not become legal and final if otherwise it is void; for instance, if there is a flagrant violation of natural justice, the order by a Tribunal may be a nullity'. In the light of these judgments, it is difficult to entertain the objection of the learned CIT(DR) that the assessee cannot question the reassessment order now on grounds of lack of jurisdiction. It is well-settled that the Assessing Officer assumes jurisdiction to reopen the assessment and frame a reassessment order only by t11e act of issue of a valid notice under section 148. If the notice is barred by time, as we have shown earlier, the reassessment proceedings are wholly without jurisdiction. It is not a case of mere irregular exercise of lawful jurisdiction. This point can be taken when the Assessing Officer seeks to rectify the reassessment order later, though the reassessment order itself was not made the subject matter of an a....
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....he contention of the assessee that no reasons were recorded for issuing the notice under section 148 but found the same to be incorrect, as the assessee had filed a revised return showing higher income which was considered to be sufficient reason for reopening the assessment. With regard to the question whether the assessee can challenge the validity of the reassessment proceedings in collateral proceedings, it was held following the Supreme Court judgment in State of Kerala v. M.K. Kunhikannan Nambiar Manjeri Manikoth [1996] 1 SCC 435 and Rafique Bibi v. Sayed Waliuddin [2004] 1 SCC 287 that even a void order rendered between parties cannot be said to be nonexistent in all cases and situations; it was observed that a decree is a nullity only if the court passing it has usurped a jurisdiction which it did not have and a mere wrong exercise of jurisdiction does not result in a nullity. Applying these judgments, it may be seen that in the case before the High Court that the Assessing Officer having had sufficient reasons for reopening the assessment, there was no lack of jurisdiction or 'coram non-judice' and hence the reassessment order was not a nullity. On that basis, it was held ....
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....sessments of the subsequent year or years. The figures of loss to be brought forward and adjusted against the income of the subsequent year or years have to be mended. This exercise is permitted to be carried out by sub-section (4) of section 155. By the time the Assessing Officer purports to do it, the statutory limitation period of 4 years prescribed by section 154(7) might have been crossed. Therefore, section 155(4) further provides that the consequential amendments to the assessments of the subsequent year or years may be carried out within a period of 4 years reckoned not from the end of the financial year in which the assessments of the subsequent year or years were completed, but should be reckoned from the end of the financial year in which the reassessment order for the earlier assessment year was passed under section 147. This sub-section provides for an entirely different situation. It refers to changes in the figure of business loss due to passing of a reassessment order, which are to be carried forward and adjusted against the income of the subsequent years under section 72 to section 74A. The specific provisions of section 80-I are not covered by the subsection. 1....
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....ofits of a subsequent year or years under sections 72 to 74A. Such adjustments alone can be carried out through an order of amendment. There is no specific power conferred upon the Assessing Officer to amend the assessment of a later year to give effect to the change in the figure of loss in respect of an industrial undertaking arising out of a rectification order passed for the earlier year, purely for the purpose of adjusting the figure of deduction available under section 80-I in the later year. As we have already noticed in the earlier part of our order while narrating the facts, even in the notice under section 154 for the year under appeal the Assessing Officer has stated that he proposed to amend and recompute the claim for deduction under section 80-I in respect of the Anola unit for the year under appeal 'consequent upon passing of order under section 154 dated 10-2-2003 in the assessment year 1993- 94 regarding claim of 80-I of the Income-tax Act, 1961 on Anola Unit'. There is no reference to any order of reassessment passed under section 147 as required by sub-section (4) of section 155 for the assessment year 1993-94. This sub-section can be invoked only if the amendmen....