TaxTMI 
TaxTMI 
2023 (7) TMI 1149
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....oviding reasonable opportunity of being heard, against the principles of natural justice and not in accordance with the provisions of law. It is prayed that the Revision Order passed under section 263 of the Act may please be cancelled/set-aside on this ground alone. GROUND NO. II 2. That the Revision Order passed by the Ld. PCIT under section 263 of the Act is highly unjustified, bad in law, without jurisdiction & void ab initio since, the Ld. PCIT has grossly erred in concluding that the Learned Assessing Officer ("the Ld.AO") has failed to carry out the necessary enquiries and investigation in relation to the issues which pertains to the material already on record. Hence, it is prayed that the Order passed by the Ld. PCIT under the provisions of section 263 of the Act may please be cancelled & quashed in limine. GROUND NO. III 3. On the facts and in the circumstances of the case as well as in law, the Ld. PCIT has grossly erred in setting aside the assessment order passed by the Ld.AO under section 143(3) of the Act on 29.11.2017 with direction to make fresh assessment on specified issues by holding that the said order is erroneous in so far a....
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....ply 7 5. 28.08.2017, 10.10.2017, 01.11.2017 Notice u/s. 142(1) a/w. query letter were issued by the ITO, Ward-4(1), Raipur, 8-10 of APB 6. 13.11.2017 Reply/submission filed by the assessee with the ITO, Ward-4(1), Raipur 11-13 of APB 7. 29.11.2017 Assessment was framed by the ITO, Ward-4(1), Raipur for A.Y.2015-16. 3. After culmination of the assessment proceedings by the ITO, Ward- 4(1), Raipur vide his order passed u/s. 143(3) of the Act dated 29.11.2017, the Pr. CIT, Raipur-1 vide his order passed u/s. 263 of the Act dated 28.03.2021, observed that as the A.O had failed to both carry out necessary verification and apply his mind while framing the assessment, thus, the order passed by him u/s. 143(3) of the Act dated 29.11.2017 was rendered as erroneous in so far it was prejudicial to the interest of the revenue for the following reasons: "1. The assessee has purchased land at Mana, Raipur jointly with Pinki Sachdev. The total value of the land including stamp duty, registry charges and other expenses was for Rs. 1,28,07,000/- out of which assessee's component was for Rs. 64,03,500/-. The mode of investment for assessee's ....
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.....e. SBI and Jila Sahkari Bank Ltd. no such transaction are being reflected in these accounts. On perusal of balance sheet, it is found that the assessee has maintained four accounts during the year. But the statement of bank account maintained at SBI (KCC) and Vijaya Bank was submitted by the assessee. Hence, the all-transaction pertaining to the bank account were not verified by the AO." Accordingly, the Pr. CIT set-aside the assessment order to the file of the A.O with a direction to adjudicate the issues afresh after conducting necessary enquiries and affording a reasonable opportunity of being heard to the assessee. 4. Aggrieved the assessee has assailed the order passed by the Pr. CIT, Raipur-1 u/s. 263 of the Act dated 28.03.2021 in appeal before us. 5. We have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 6. The Ld. Authorized Representative (for short 'AR') for the assessee at the very outset assailed the validity of the jurisdict....
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....s: (i) Pr. CIT Vs. Badal Prakash Jindal HUF & Ors, ITA Nos.8, 7, 9 & 10 of 2023 dated 02.03.2023 (Orissa HC) (ii) Maruti Clearn Coal & Power Ltd. Vs. Pr. CIT-1, Raipur, ITA No.55/RPR/2021 dated 31.10.2022 (iii) Pradeep Dattatraya Banginwar Vs. Pr. CIT-2, Nagpur, ITA No.28/NAG/2021 dated 06.04.2022 (iv) M/s. Classic Flour & Food Processing Pvt. Ltd. Vs. CIT-4, ITA No.764 to 766/Kol/2014 dated 05.04.2017. 8. Per contra, the Ld. Departmental Representative (for short 'DR') rebutting the contentions advanced by the Ld. AR, submitted that the ITO, Ward-4(1), Raipur had validly assumed jurisdiction and framed the assessment vide his order passed u/s. 143(3) of the Act dated 29.11.2017. Rebutting the contentions advanced by the Ld. AR as regards invalid assumption of jurisdiction by the A.O, i.e. in absence of valid notice u/s. 143(2) of the Act, the Ld. DR had filed before us his written submissions, which for the sake of clarity are culled out as under: "In the present case, the case of the assessee was selected for scrutiny through CASS for the year under consideration under the category of Limited Scrutiny and u/s. 143(2) of the Act was ....
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....een observed that the assessee has contested on the matter of jurisdiction over the case and comment has been sought by the JCIT, ITAT, Raipur. The point wise report on the issues raised by the assessee before Hon'ble ITAT, Raipur are as under:- 4.1 Comments on jurisdiction over the case in view of section 124, 120, and 2(7A) of the Act:- The AO has proper jurisdiction over the assessee in view of the section 124, 120 and section 2(7A) of the Act due to the following reasons:- 4.1.1 It is submitted that the assessee has herself requested for transferring the case to the ITO-2(1), Raipur vide reply dated 19.10.2016. The case was further transferred to ITO - 4(1), Raipur having the jurisdiction over the assessee as per order u/s 120 of the Act passed by the JCIT, Range-4, Raipur dated 15.11.2014. Thus, the AO has rightly assumed the jurisdiction over the assessee for passing the order u/s. 143(3) of the Act. 4.1.2 It is also pertinent to mention here that notice u/s 143(2) of the Act was issued to the assessee on 19.09.2016 and the assessee filed the application for transferring her case to Raipur. After considering the application of the assessee, the ....
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....g to note that the assessee himself has reported his different jurisdictional AO even after having the same set of residential address. The details of AO shown in its ITR for various assessment year are tabulated below:- A.Y. Address shown by the assessee AO shown by the assessee 2011-12 762, Sunder Nagar, Raipur Ward-1(1), Raipur 2012-13 762, Sunder Nagar, Raipur Ward-1(1), Raipur 2013-14 762, Sunder Nagar, Raipur Ward-1(1), Raipur 2014-15 762, Sunder Nagar, Raipur Ward-1(1), Raipur 2015-16 762, Sunder Nagar, Raipur Ward-2(1), Raipur 2016-17 762, Sunder Nagar, Raipur Ward-2, Rewa 2017-18 762, Sunder Nagar, Raipur Ward, Singrauli 2018-19 762, Sunder Nagar, Raipur Ward, Singrauli 2019-20 762, Sunder Nagar, Raipur Ward-4(1), Raipur 2020-21 762, Sunder Nagar, Raipur Ward-4(1), Raipur 2021-22 762, Sunder Nagar, Raipur Ward-4(1), Raipur 2022-23 762, Sunder Nagar, Raipur Ward-4(1), Raipur From the above, it is evident that the assessee herself has shown her jurisdictional AO as Ward-1(1), Raipur from A.Y. 2011-12 to 2014-15 and Ward-2(1) for A.Y. 2015-16. Further,....
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.... not exercise such an option, it cannot be questioned later on. The same observation was made by the Hon'ble High Court of Delhi in the case of Abhishek Jain vs Income Tax Officer, Ward-55(1), New Delhi (WRIT PETITION (CIVIL) No. 11844/2016) that "As far as territorial or pecuniary jurisdictions are concerned, objection should be taken at the earliest possible opportunity and /or before the settlement of issues and not at the subsequent stage. Jurisdiction as to the subject matter is distinct and stands on a different footing." Thus, the ground of the assessee regarding jurisdiction at this junction are infructuous and to be dismissed. 4.1.7 The issue of jurisdiction was also considered by the various appellate courts in various cases which are discussed as under:- "4.1.7.1 In the case of Hindustan Transport Co vs IAC, 189 ITR 326 (Allahabad), the Hon'ble HC dealt extensively with the various provisions of the Act and held that the allocation of jurisdiction is a measure of administrative convenience. In such a situation, the concept of jurisdiction cannot be imported and, certainly, not in the sense of invalidating the resultant action on account of the d....
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....wherein a distinction has been drawn between a jurisdiction with regard to the subject matter of the suit and that of territorial and pecuniary jurisdiction. It has been held that a decree or judgment passed by a court having no territorial or pecuniary jurisdiction is not a nullity but at the most it is an irregularity and such a judgment and decree cannot be set aside by higher court while exercising appellate or revisional jurisdiction unless a prejudice which has been caused to the appellant is established. 4.1.7.5. In the case of CIT vs All India Children Care & Educational Development Society, [2013] 357 ITR 134 (Allahabad), the Hon'ble Allahabad HC has held that Tribunal is not a competent authority to adjudicate upon jurisdiction of Assessing Officer when it is not raised before Assessing Authority. Such a decision has been arrived at after looking at various judicial precedents and provisions of law including S.124. Similar view had been held in various judicial decisions including (i) Subhash Chander v. CIT [2008] 166 Taxman 307, P & H HC, (ii) 25 taxmann.com 464 (Jodhpur ITAT), Vaishali Builders & Colonizers vs Addl. CIT [2012], (iii) ACIT vs Punjab Urban De....
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....s from the stage where the error had occurred. 4.1.8. In the present case, the assessee not challenged the issue of issuance of notice by jurisdictional AO before the AO and PCIT. Even the assessee was having sufficient opportunity during assessment proceeding as well as during the review proceeding. Thus, it clearly indicates that the assessee had not come with clean hands for raising an additional issue of challenging jurisdiction before the Hon'ble ITAT. Thus, the assessee has suppressed the fact before the AO as well as before PCIT. It indicates that the assessee has not approached to the Hon'ble ITAT on the issue of jurisdiction over the case with clean mind, clean heart and clean objective therefore, the this ground is liable to be dismissed in limine. The Hon'ble High Court of Karnataka in the case of Ratnachudamani s. Utnal Vs. Income Tax Officer (2004) 269 ITR 272 dismissed the writ as the petitioner had not approached the Court with clean hands and held that the petitioner has intentionally and deliberately suppressed the material facts. If the petitioner wants any relief at the hands of this court, he has to approach the court with clean hands and it....
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.... Agriculture & Properties Pvt. Ltd v. Pr.CIT-1, Raipur in ITA No.30/RRR/2021 (21.04.2022) (ITAT Raipur). iii) Arihant Jewellers Private Limited v Pr.CIT-1, Raipur in ITA No. 61/ RRR/2021 (01.04.2022) (ITAT Raipur), iv) M/s. Grasim Industries Ltd Vs. PCIT in ITA No.1964/Mum/2019 (Date of Order: 24.05.2021) (ITAT Mumba) 4.1.1 Assessee has herself requested for transferring the case to the ITO-2(1), Raipur vide reply dated 19.10.2016. The case was further transferred to ITO-4(1), Raipur having the jurisdiction over the assessee as per order u/s. 120 of the Act passed by the JCIT, Range-4, Raipur dated 15.11.2014. Thus, the AO has rightly assumed the jurisdiction over the assessee for passing the order u/s 143(3) of the Act. Appellant raised an Objection vide Letter Dated 19th October, 2016 regarding the jurisdiction of ITO-2, Rewa. Acting on the objection, the jurisdiction was transferred to Assessing Officer at Raipur. 4.1.2 Notice u/s 143(2) of the Act was issued to the assessee on 19.09.2016 and the assessee filed the application for transferring her case to Raipur. After considering the application of the assessee, the case was transferred to Raipur. Further, ....
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.... present case, the assessee has only replied to the AO not to the PCIT for transfer his case to Raipur. It is a trite law that the jurisdiction of the assessee is determined by the provisions of section 120(1) & (2) of the Act and the assessee does not have any right, vested or otherwise, to choose his jurisdiction or the Assessing Officer and in this case, since the assessment case was already rightly transferred by NJAO to JAO, there was no need for filing any objection etc. to the jurisdiction before the PCIT or other prescribed superior authority. 4.1.4 The jurisdiction can be conferred only by notification u/s. 120(1) and 120(2) of the Act only and said section mandates also to furnish correct jurisdiction of the assessee while filing his ITR. On going through the e-filing history of the assessee, it is very interesting to note that the assessee himself has reported his different jurisdictional AO even after having the same set of residential address. The details of AO shown in its ITR for various assessment year are tabulated below:- A.Y. Address shown by the assessee AO shown by the assessee 2011-12 762, Sunder Nagar, Raipur Ward-1(1), Raipur 20....
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....iction and he was a non-jurisdictional Assessing Officer and hence, the transfer of jurisdiction to Assessing Officer at Raipur was just, proper and valid and perfectly within the four corners of law. 4.1.5 Assessee is well informed for the jurisdictional assessing officer of his case as he is filing his ITR for past many years. Further, he attended assessment proceedings through the authorized representative. The authorized representatives are very experienced and have through knowledge of income tax law and procedure. He is well aware of the jurisdiction over the case and remedial. action for correction and rectification of jurisdictional issue. During the entire assessment proceedings the assessee as well as the learned counsel for the reasons best known to them, have also not objected the validity of the notice and assessment proceedings in the case. The Act has protected the liberty of choosing his jurisdiction or furnish objection on jurisdictional issues under section 124 of the Act. He has sufficient opportunities and time to object validity of proceedings and issuance of statutory notices. Therefore, objection on jurisdictional issue furnished after completion of ass....
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....jection to the jurisdiction vide letter dated 19.10.2016. Further, it is a settled law that the issue of jurisdiction is a purely legal issue which could be challenged at any stage of proceedings. It is equally well settled that jurisdiction can neither be waived nor created and even acquiescence cannot confer the authority a jurisdiction which he lacked inherently. Reliance in support is placed upon the following judicial pronouncements : (i) PCIT v. Cosmat Traders (P) Ltd [2023] 146 taxmann. com 207 (Cal. HC) (ii) CIT v. M Builders Pvt. Ltd [2012] 349 ITR 271 (All. HC); (iii) PCIT v. Mohd. Rizwan Prop. M/s. MR. Garments [2018] 77 ITR-OL 149 (All. HC); (iv) PCIT v. Consortium Nussli Comfort Net [2022] 139 taxmann.com 337 (Del. HC); (v) Charu K Bagadia v. ACIT [2022] 448 ITR 563 (Mad HC); (vi) Mavany Brothers v. CIT [2015] 62 taxmann. com 50 (Bom. HC). Further, the facts in the case of Abhishek Jain v. ITO (Del.HC) are distinguishable on facts and the facts of the present case stand on a better footing. Distinguished in the case of Abdul Azeez Haroon Vs. DCIT [2020] 270 Taxman 216 (Mad HC) and in the case of M/s. Adarsh Rice Mill Vs. ITO in ITA No. 84/RPR/2022 ....
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....Each year is separate and distinct year and in case the assessee shifts. his residence or place of business or work etc. Assessing Officer of place where the assessee has shifted or otherwise, will have jurisdiction and it is not necessary that an order under section 127 should be passed. This, however, does not mean that the Assessing Officer where the returns of income were earlier filed ceases to have jurisdiction, provided the assessee has residence in his area, place of business, class, income etc. Residence can mean permanent residence as well as current or temporary residence of some permanence. (iv) The question of jurisdiction or the place of filing has to be examined each year with reference to provisions of section 124. Section 124 provides flexibility and postulates multiple and concurrent jurisdiction including filing of return and where the assessee has permanent or current residence or where he has sole/only source of income. (v) An assessment order passed without making reference to Commissioner/ Commissioners under section 124 is not a nullity for want of jurisdiction but it results irregularity which can be rectified by order of remit and directing the Assessing O....
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....cts and make out a case. Similarly the Indore Bench of the Madhya Pradesh High Court in the case of Ajit Kumar Pitaliya v. Income Tax Officer (2008) 318 ITR 0182 dismissed the appeal of the assessee in limine for failure to come with clean hands and held that he must come to the court with clean hands. The Doctrine of Clean Hands is not only applicable to the High Court and Apex Court but also before other courts and judicial forum. The Hon'ble Apex Court in the case of Ramjas Foundation v. Union of India & others in Civil Appeal No. 6662 of 2004 removed the misconception that these principles (Doctrine of Clean Hands) are only applicable to Writs & SLPs before the Apex Court and High Courts. The Phrase "but also to the cases instituted in others courts and judicial forums". This judgment lays down the principle that it is obligatory for a petitioner/appellant/ applicant to approach any court or judicial. forum with clean hands or face the ire of the courts/judicial forums who will not hesitate in applying the doctrine of clean hands and rejecting his appeal /revision. At the cost of repetition, the appellant assessee at the very first instance itself had filed ....
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....ined and was liable to be struck down. 11. Before dealing with the claim of the Ld. AR that the A.O, i.e. ITO, Ward-4(1), Raipur had framed the assessment vide his order passed u/s. 143(3) of the Act dated 29.11.2017 without issuing any notice u/s. 143(2) of the Act, we are of the considered view that certain relevant facts which will have a material bearing on the adjudication of the said issue requires to be clarified. 12. Albeit, it is the claim of the Ld. DR that as the assessee had as per the mandate of sub-section (3) to Sec. 124 of the Act failed to call in question within a period of one month the jurisdiction of the A.O, i.e. ITO, Ward-2, Rewa on receipt of notice u/s. 143(2) of the Act dated 19.06.2016 from him, therefore, she was precluded from challenging the validity of the assessment that was framed by the ITO, Ward-4(1), Raipur on the basis of the aforesaid notice, but we are unable to persuade ourselves to subscribe to the same. We, say so, for the reason that as stated by the Ld. AR and, rightly so, the assessee on receipt of notice u/s. 143(2) of the Act dated 19.09.2016 from the ITO, Ward-2, Rewa, Page 4-5 of APB, had well within the stipulated time period ....
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....under Nagar, Raipur Ward-2, Rewa 2017-18 762, Sunder Nagar, Raipur Ward, Singrauli 2018-19 762, Sunder Nagar, Raipur Ward, Singrauli 2019-20 762, Sunder Nagar, Raipur Ward-4(1), Raipur 2020-21 762, Sunder Nagar, Raipur Ward-4(1), Raipur 2021-22 762, Sunder Nagar, Raipur Ward-4(1), Raipur 2022-23 762, Sunder Nagar, Raipur Ward-4(1), Raipur On a careful perusal of the aforesaid details, it can safely be gathered, that the assessee during the year under consideration as well as in the preceding and succeeding years was filing her returns of income with the address, viz. "H. No.762, C/o. Shri Narendra Kumar Tiwari, Sunder Nagar, Raipur (C.G.)- 492 001". On being queried as to on what basis the ITO, Ward-2, Rewa was shown as the A.O of the assessee in her return of income for A.Y.2016-17, it was submitted by the Ld. AR that the same had been taken by default and the assessee had no control over the same. We find on a perusal of the jurisdictional history of the assessee as was filed before us that the same over the years had remained as under: Apropos the aforesaid details, we are unable to fathom that as to on what basis th....
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....had called for her PAN details a/w. an "affidavit" supporting the factual position. In compliance, the assessee had filed an "affidavit" dated 17.04.2023 (placed on record), wherein it was claimed by her that she had been filing her income tax returns since A.Y.1999-2000 with the office of the Income Tax Department, Raipur with the address "H. No.762, Sunder Nagar, Raipur (C.G.) and had neither changed nor applied for any change in her address in the PAN database with the Income Tax Department. Further, it is deposed by her that on receipt of notice u/s. 143(2) of the Act dated 19.09.2016 from ITO, Ward-2, Rewa (M.P) she had objected to the same. Also, the assessee had filed her PAN Profile which reads as under: (emphasis supplied by us) Profile As per profile As per PAN Name ARUNA TIWARI ARUNA TIWARI Date of Birth 10-Oct-1954 10-Oct-1954 Gender Female Female Aadhaar Number 807101526473 807101526473 Primary Mobile Number 9826300661 - Primary Email ID [email protected] - - Address for Communication 762, SUNDER NAGAR, Sunder Nagar S.O, Raipur, RAIPUR, 492 013, Chhattisgarh, INDI....
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....thin the stipulated time period i.e. up to 30.09.2012, therefore, the assessment thereafter framed by him u/s. 143(3) of the Act, dated 12.03.2014 could not be sustained and was liable to be struck down. The Ld. A.R on a specific query by the bench that as to whether the assessee as per the mandate of sub-section (3) of Section 124 of the Act had called in question the jurisdiction of the Assessing Officer within a period of one month from the date on which he was in receipt of notice(s) u/s. 143(2) and u/s. 142(1) of the Act from the Income-Tax Officer, Ward-1(2), Jabalpur, answered in negative. Elaborating on the reasons for not calling in question the jurisdiction of the Income-Tax Officer, Ward-1(2), Jabalpur, it was submitted by the Ld. AR that as the said officer did not fall within the meaning of "Assessing Officer" u/s. 2(7A) of the Act, therefore, the very basis for triggering the provisions of sub-section (3) of Section 124 were not satisfied. It was the claim of the Ld. AR that the obligation cast upon the assessee to call in question the jurisdiction of the Assessing Officer as per sub-section (3) to Section 124 of the Act would only come into play where the notice was ....
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....of assessment was challenged on several grounds and, particularly, on the ground that no notice under section 143(2) of the Act was issued within the time prescribed by the assessing officer, who had jurisdiction over the assessment file of the assessee at the relevant time.... The Tribunal considered the correctness of the finding of the CIT(A) and, on facts, found that both the assessing officers, namely, the assessing officer, who had jurisdiction over the assessee till 6-4-2009 and the assessing officer, who had jurisdiction post the said date had not issued notice under section 143(2) of the Act within the prescribed period of six months from the end of the financial year in which the return was filed. This factual position could not be controverted by the revenue before us. As pointed out by the Hon'ble Supreme Court in the case of Hotel Blue Moon(supra), non-issuance of notice under section 143(2) is not a procedural irregularity and, therefore, it is not curable. Thus, on facts, it having been established that no notice was issued under section 143(2) of the Act, the order passed by the Tribunal was perfectly legal and valid.... The Tribunal, thereafter, analysed as to ....
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....this basis, it was requested that the said notice issued by the Bangalore office be withdrawn. Thereafter, the Income Tax Officer, Ward-6(1) (1), Bangalore wrote to the Income Tax Officer, Ward-24(3), New Delhi on the subject of transfer of scrutiny assessment records in the case of the petitioner....It is evident from the aforesaid letter that it is only the records of the case which were transferred and if the case itself had been transferred, the same would have to be directed under Section 127 of the said Act. No such order of transfer has been made and the above letter dated 16.12.2014 is indicative of the fact that the Bangalore Office of the Income Tax Department did not have jurisdiction in this case. That being the position, the purported notice under Section 143(2) issued on 10.09.2013 was one without jurisdiction and cannot be regarded as a valid notice. The first notice, therefore, which was issued by an Officer having jurisdiction was on 21.12.2014. This was issued clearly beyond the period of limitation which has been prescribed, i.e., beyond 30.09.2013 in this case. As such, the impugned notice dated 24.12.2014 issued under Section 143(2) of the said Act is barred by....
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....records were transferred by the Assessing Officer at New Delhi to the Assessing Officer at Mumbai, the time limit of six years as per section 149 had already elapsed. Assessing Officer at Mumbai, thereafter, recorded fresh reasons and issued a fresh notice dated 14-1-2014 under section 148, that is impugned, well beyond six years. The notice issued by the Assessing Officer at Mumbai was independent of the notice issued by the Assessing Officer at New Delhi and, therefore, the validity thereof has to be decided independently. The very fact that the Assessing Officer at Mumbai recorded his own reasons and issued a fresh notice and did not seek to derive his jurisdiction basis the notice dated 22-3-2013 itself indicates that the revenue's stand has no basis. [Para 17] In the circumstances, the notices issued by Assessing Officer, Mumbai under section 148 to petitioner for assessment year 2006-07 are quashed and set aside. vii) Abdul Azeez Haroon v. DCIT [2020] 115 taxmann.com 289 (Mad. HC) Section 120, read with sections 124, 127 and 148, of the Income-tax Act, 1961 - Income-tax authorities - Jurisdiction of (Territorial jurisdiction) - Assessment year 2008-09 - ....
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....d 19.09.2016 by the ITO, Ward-2, Rewa, i.e. a non-jurisdictional Officer is nothing but nullity. 18. We shall now deal with the issue, i.e. as to whether or not validity of the order passed by the A.O u/s.143(3) of the Act dated 29.11.2017 could for the first time in the course of present appellate proceeding before us be taken as a basis for assailing the sustainability of the order passed by the Pr. CIT u/s.263 of the Act dated 28.03.2021? 19. In our considered view there is substance in the claim of the ld. AR that as the proceedings before the Pr. CIT u/s 263 of the Act, dated 28.03.2021 are in the nature of collateral proceedings, therefore, the assessee could in the course of appellate proceedings which in turn originates from the order passed u/s 263 of the Act, dated 28.03,2021 challenge the validity of the impugned assessment order passed by the A.O u/s. 143(3), dated 29.11.2017. The aforesaid contention of the ld. A.R that the illegality/invalidity of an order passed in the primary proceedings can be challenged in the course of the collateral proceedings finds support from the recent order of the Hon'ble High Court of Orissa in the case of Pr. CIT, Sambalpur Vs. Bad....
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....efects of assessment order for assailing the jurisdictional validity of the revision order passed u/s 263: The first issue that arises for our consideration is - whether the assessee can challenge the jurisdictional validity of order passed u/s 143(3) in the appellate proceedings taken up for challenging the order passed u/s 263? If we analyse the nature of both of these proceedings, which are under consideration before us, we find that the original assessment proceedings can be classified in a way as 'primary proceedings'. These are, in effect, basic foundational proceedings and akin to a platform upon which any subsequent proceedings connected therewith can restupon. The proceedings initiated u/s 263 seeking to revise the original assessment order is off shoot of the primary proceedings and therefore, these may be termed as 'collateral proceedings' in the legal framework. The issue that arises here is whether any illegality/invalidity in the order passed in the 'primary proceedings' can be set up in the 'collateral proceedings' and if yes, then of what nature? 8.1. We have analysed this issue carefully. There is no doubt that after passing of the original assess....
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....ome of them have been discussed by us in followings paragraphs. 8.2. In a matter that came up before Hon'ble Supreme Court in the case of Kiran Singh & Ors. v. Chaman Paswan & Ors., [1955] 1 SCR 117 the facts were that the appellant in that case had undervalued the suit at Rs. 2,950 and laid it in the court of the Subordinate Judge, Monghyr for recovery of possession of the suit lands and mesne profits. The suit was dismissed and on appeal it was confirmed. In the second appeal in the High Court the Registry raised the objection as to valuation under Section 11. The value of the appeal was fixed at Rs. 9,980. A contention then was raised by the plaintiff in the High Court that on account of the valuation fixed by the High Court the appeal against the decree of the court of the Subordinate Judge did not lie to the District Court, but to the High Court and on that account the decree of the District Court was a nullity. Alternatively, it was contended that it caused prejudice to the appellant. In considering that contention at page 121, a four Judge Bench of Hon'ble Supreme Court speaking through Vankatarama Ayyar, J. held that: "It is a fundamental principle well-es....
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....f Kiran Singh & Ors. v. Chaman Paswan & Ors, supra were reiterated by the Apex Court in the cases of Superintendent of Taxes vs Onkarmal Nathmal Trust (AIR 1975 SC 2065) and Dasa Muni Reddy v. Appa Rao (AIR 1974 SC 2089). In the first of these decisions it was pointed out that revenue statutes protect the public on the one hand and confer power upon the State on the other, and the fetter on the jurisdiction is one meant to protect the public on the broader ground of public policy and, therefore, jurisdiction to assess or reassess a person can never be waived or created by consent. This decision shows that the basic principle recognized in Kiran Singh (supra) is applicable even to revenue statutes such as the Income Tax Act. Dasa Muni Reddy (supra) is a judgment where the principle of 'coram non judice' was applied to rent control law. It was held that neither the rule of estoppel nor the principle of res judicata can confer the Court jurisdiction where none exists. Here also the principle that was put into operation was that jurisdiction cannot be conferred by consent or agreement where it did not exist, nor can the lack of jurisdiction be waived. 8.6. These judgments were....
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....he assessment and also after specifically discussing the judgment of the Supreme Court in Onkarmal Nathmal Trust (supra) and Dasa Muni Reddy (supra) held that the Tribunal was in error in holding that the question of jurisdiction became final when it passed the earlier remand order. It was held that neither the question of res judicata nor the rule of estoppel could be invoked where the jurisdiction of an authority was under challenge. According to Hon'ble Gujarat High Court, the rule of res judicata cannot be invoked where the question involved is the competence of the Court to assume jurisdiction, either pecuniary or territorial or over the subject matter of the dispute. Hon'ble High Court further held that since neither consent nor waiver can confer jurisdiction upon the Assessing Officer where it did not exist, no importance could be attached to the fact that the assessee, in the first round of proceedings, expressly gave up the plea against the erroneous assumption of jurisdiction by the assessing authority. According to the Hon'ble Court, the "finality or conclusiveness could only arise in respect of orders which are competent orders with jurisdiction and if the proceedings o....
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.... is open to the assessee to set up the question of validity of the assessment in the appeal against the levy of penalty. 8.9. We also derive support from another judgement of Hon'ble Bombay High Court in the case of Inventors Industrial Corporation Ltd vs CIT 194 ITR 548 (Bombay) wherein it was held that assessee was entitled to challenge the jurisdiction of the AO to initiate re-assessment proceedings before the CIT(A) in the second round of proceedings, even though he had not raised it in earlier proceedings before the Assessing Officer or in the earlier appeal. 8.10. Thus, on the basis of aforesaid discussion we can safely hold that as per law, the assessee should be permitted to challenge the validity of order passed u/s 263 on the ground that the impugned assessment order was non est and we hold accordingly." (B). Answering the second issue, i.e, if the order passed u/s 143(3) was illegal or nullity, then, whether the CIT had a valid jurisdiction to pass the impugned order u/s 263 to revise the non est assessment order, the tribunal answered in the negative. For the sake of clarity the relevant observations of the tribunal in context of the aforesaid issue....
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.... ground no.3 is allowed and revision order passed u/s 263 is quashed." 10.2. It is further noticed by us that similar view has been taken by Chandigarh Bench of the Tribunal in the case of Steel Strips Ltd (supra). 11. Thus, after taking into account all the facts and circumstances of the case, we find that in this case, the original assessment order passed u/s 143(3) dt 24-10-2013 was null & void in the eyes of law as the same was passed upon a non-existing entity and, therefore, the Ld. CIT could not have assumed jurisdiction under the law to make revision of a non est order and, therefore, the impugned order passed u/s 263 by the Ld.CIT is also nullity in the eyes of law and therefore the same is hereby quashed." It may at this stage be relevant and pertinent to point out that while for the aforesaid order of the tribunal had thereafter been approved by the Hon'ble High Court of Bombay vide its order passed in ITA No.1168/2017 dated 28.09.2021, but as the aforesaid view of the tribunal on the issues in question before us was not carried by the revenue any further in appeal before the Hon'ble High Court, therefore, the same having been accepted by the departm....
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....section 263 of the I T Act." We further find that the ITAT, Delhi in the case of Krishan Kumar Saraf Vs. Commissioner of Income Tax, Hissar, ITA No.4562/Del /2011, dated 24.09.2015 had also taken a similar view. It was observed by the tribunal that the CIT cannot revise an order which is non-est in the eyes of law. In the said case the assessee in the course of the appellate proceedings which had originated from the order passed by the CIT under Sec. 263 of the Act had assailed the validity of the order passed u/s 263, for the reason that the notice u/s 143(2) was issued beyond the stipulated time period. The department objected to the aforesaid challenge thrown by the assessee to the validity of the assessment order on the ground that as the assessee had not challenged the assessment order, therefore, the same had attained finality. However, the said contention of the revenue was turned down by the tribunal by relying on the order of the Hon'ble High Court of Delhi in the case of CIT Central-1 Vs. Escorts Farms Pvt. Ltd., 180 ITR 280(Del) on the ground that the CIT could not have revised a non-est order. The relevant observations of the tribunal are for the sake of clarity cull....
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....ad along with the aforesaid settled position of law concur with the ld. AR that now when the impugned order of reassessment under Sec.143(3), dated 29.11.2017 in itself had been passed on the basis of invalid assumption of jurisdiction by the AO and thus is invalid and bereft of any force of law; or in fact non-est in the eyes of law, therefore, the same could not have been revised by the Pr. CIT under Sec. 263 of the Act. 20. On the basis of our aforesaid observations, we herein conclude that as the order of assessment under Sec.143(3) of the Act, dated 29.11.2017 in itself had been passed on the basis of invalid assumption of jurisdiction by the AO, therefore, as claimed by the Ld. AR and, rightly so, the same could not have been revised by the Pr. CIT under Sec. 263 of the Act. Accordingly, we herein quash the order passed by the Pr. CIT under Sec. 263 of the Act, dated 28.03.2021 for want of valid assumption of jurisdiction. As we have quashed the impugned order passed by the Pr. CIT under Sec. 263 of the Act, dated 28.03.2021 on account of invalid assumption of jurisdiction by him, therefore, we refrain from adverting to and therein adjudicating the other contentions that h....