TaxTMI 
TaxTMI 
2016 (1) TMI 1453
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....ot satisfied by the stand taken by the CIT(A) in the remanded proceedings as well. That is why the assessee is once again in appeal before us. 3. When this appeal was called out for hearing, learned counsel for the assessee invited our attention to the additional grounds of appeal, which, according to him, goes to the root of the matter. He submits that in the event of assessee being successful in this ground of appeal, all other issues raised in the appeal will be rendered academic and infructuous. We are thus urged to take up these additional grounds of appeal first. Learned Departmental Representative does not oppose this prayer of the assessee. 4. Grievance of the assessee, as raised in the additional grounds of appeal is, that the assessment order passed by the Assessing Officer is contrary to the scheme of the Act inasmuch as the assessee was directly issued an assessment order, without the issuance of a draft assessment order as required by the scheme of Section 144C of the Act. 5. In this case, the assessment order under section 143(3) was passed on 24th November 2010, without passing any draft assessment order. As stated in the assessment order, "penalty proceedings und....
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....issue can indeed be even raised for the first time before this Tribunal. That aspect of the matter is not even seriously disputed before us. What is really contested is whether such an issue can be raised for the first time in the second round of proceedings, as a result of the matter having been remanded by the Tribunal earlier, before the Tribunal. On this issue, however, we find guidance of Hon'ble jurisdictional High Court. In the case of Inventors Industrial Corporation Ltd Vs CIT [(1992) 194 ITR 548 (Bom)], speaking through late Hon'ble Justice T D Sugla, one of our former Presidents who later graced Hon'ble High Court as a judge, Hon'ble Bombay High Court has observed as follows: In the case before us, the new ground was raised for the first time not in appeals arising out of the same proceedings. It was taken in collateral proceedings. Reassessment under section 147 was made on August 27, 1959. More or less a consent order was obtained in appeal thereagainst as a result of which the order of reassessment stood set aside for the purpose of giving an opportunity to the assessee to prove the genuineness of certain cash credits. The ground questioning jurisdiction to reassess....
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....authority and directions had been given. Even where the appellate order does not contain such specific directions, under certain circumstances, it may have to be read as remitting the case only on the issues in appeal and, in that event also, the Income-tax Officer cannot re-examine other issues. Consequently, the assessee may not be able to raise contentions which were not raised by him in the original proceedings. However, in this case, it is not really necessary to go into this question. The impugned ground raised before the Appellate Assistant Commissioner admittedly goes to the very root of the Income-tax Officer's jurisdiction to make reassessment. In our view, the jurisdiction of the Income-tax Officer to initiate reassessment proceedings under section 34 of the Act depends solely on the existence of the conditions precedent prescribed by law and the jurisdictional defect, if any, cannot be made good by relying on the order of remand passed by the Appellate Assistant Commissioner. In fact, the Appellate Assistant Commissioner has no jurisdiction under section 31 of the 1922 Act to issue directions to the extent of conferring jurisdiction upon the Income-tax Officer which....
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....ndoubtedly, if a draft assessment order is wrongly titled as an assessment order, Section 292 B comes to the rescue of the Assessing Officer as it specifically provides that "(n)o return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act". The key really is that even if the draft assessment order has a wrong description as an "assessment order", as long as it is "in substance and effect, in conformity with, or according to the intent and purpose of this Act", no objection can be taken to the same. However, given the fact that that the resultant tax demand is raised, penalty proceeding initiated and entries made, the order passed by the Assessing Officer was a final assessment order in ....
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....ion 271 of the Act. Thereafter, the petitioner was given an opportunity of hearing on 12.04.2013. Subsequently, the second respondent realised the mistake in passing a final order instead of a draft assessment order which resulted in issuing a corrigendum on 15.04.2013. In the corrigendum it was only stated that the order passed on 26.03.2013 under Section 143C of the Act has to be read and treated as a draft assessment order as per Section 143C read with Section 93CA (4) read with Section 143 (3) of the Act. In and by the order dated 15.04.2013, the second respondent granted thirty days time to enable the assessee to file their objections. On receipt of the corrigendum dated 15.04.2013, the petitioner company approached the first respondent, but the first respondent declined to issue any direction to the assessment officer on the ground that the first respondent has got jurisdiction only to entertain such an appeal if the order passed by the second respondent is a pre-assessment order. Therefore, it is evident that the first respondent declined to entertain the objections raised by the petitioner company on the ground that the order passed by the second respondent is not a draft a....
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....e lacked on the expiry of the said period. In that case, the Honourable Supreme Court also held that there is a distinction between an order which is a nullity and an order which is irregular and illegal. Where an authority making order lacks inherent jurisdiction, such an order will be null and void ab initio, as the defect of jurisdiction goes to the root of the matter and strikes at his very authority to pass any order and such a defect cannot be cured even by consent of the parties. 24. This decision squarely applies to the facts of this case. In this case, the order passed by the second respondent lacks jurisdiction especially when it is beyond the period of limitation prescribed by the statute. When there is a statutory violation in not following the procedures prescribed, such an order cannot be cured by merely issuing a corrigendum. 25. In the decision rendered by the Honourable Supreme Court of India in the case of (L. Hazari Mal Kuthiala (supra), which was relied on by the learned standing counsel for the respondents, it was held that the mistake or defect on the part of the Commissioner to consult the Central Board of Revenue did not render his order invalid since th....
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.... Bench of this Court in the case of V. Ramaiah (supra) is extracted hereunder:- "Certainly passing an order of assessment under Section 158BC instead of Section 158BD (inspite of clear terminology used in both the sections) would not amount to a mistake, a defect or an omission, much less a curable one. When different contingencies are dealt with under different sections of the Act, allowing an illegality to be perpetrated and then taking a plea by the Revenue that such an action adopted on their part would not nullify the proceedings, cannot be appreciated since by virtue of such actions, the Revenue has attempted to nullify the scheme of things of limitations legally propounded under the Act...." 29. In yet another decision of the Division Bench of this Court in the case of Smt. R.V. Sarojini Devi (supra), which was relied on by the learned senior counsel for the petitioners, it was held äs follows:- "Under Section 158BC of the Act empowers the assessing officer to determine the undisclosed income of the block period in the manner laid down in Section 158BB and 'the provisions of Section 142, subsections (2) and (3) of Section 143, Section 144 and Section 145 shall....
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....s occurred after 01.10.2009, the cut off date prescribed in sub-section (1) of S.144C, the Assessing Officer is mandated to first pass a draft assessment order, communicate it to the assessee, hear his objections and then complete assessment. Admittedly, this has not been done and the respondent has passed a final assessment order dated 22.12.2011 straight away. Therefore, the impugned order of assessment is clearly contrary to S.144C of the Act and is without jurisdiction, null and void. The contention of the Revenue that the circular No.5/2010 of the CBDT has clarified that the provisions of S.144C shall not apply for the assessment year 2008-09 and would apply only from the assessment year 2010-2011 and later years is not tenable in as much as the language of Sub-section (1) of Section 144C referring to the cut off date of 01.10.2009 indicates an intention of the legislature to make it applicable, if there is a proposal by the Assessing Officer to make a variation in the income or loss returned by the assessee which is prejudicial to the assessee, after 01.10.2009. Therefore, this particular provision introduced by Finance (No.2) Act, 2009, would apply if the above condition i....
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....t is a draft assessment order. While so, the order dated 26.03.2013 of the second respondent can only be termed as a final order and in such event it is contrary to Section 144C of the Act. As mentioned supra, in and by the order dated 26.03.2013, the second respondent determined the taxable amount and also imposed penalty payable by the petitioner. According to the learned senior counsel for the petitioners, even as on this date, the website of the department indicate the amount determined by the second respondent payable by the company inspite of issuance of the corrigendum on 15.04.2013 as a tax due amount. Thus, while issuing the corrigendum, the second respondent did not even withdraw the taxable amount determined by him or updated the status in the website. In any event, such an order dated 26.03.2013 passed by the second respondent can only be construed as a final order passed in violation of the statutory provisions of the Act. The corrigendum dated 15.04.2013 is also beyond the period prescribed for limitation. Such a defect or failure on the part of the second respondent to adhere to the statutory provisions is not a curable defect by virtue of the corrigendum dated 15.04....