TaxTMI 
TaxTMI 
2023 (7) TMI 1149
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....ot 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 as it is prejudicial to the interest of the revenue. The Ld. PCIT has failed to appreciate that the said assessment order h....
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....ed 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 component was through cheque of Rs. 37,00,000/- which was paid by Narendera Tiwari (husband) and balance amount of Rs. 27,03,500/- through cash paid by assessee herself. The assessee has claimed that the payment o....
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....aintained 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 jurisdiction assumed by the Pr. CIT u/s. 263 of the Act. It was submitted by the Ld. AR that as the assessment order passed by the A.O u/s.143(3) of the Act dated 29.11.2017 which was sought to be revised was in itself invalid and non-est in the eyes ....
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....r 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 issued on 19.09.2016 by the Income Tax Officer, Rewa. Further a letter was issued by the then AO on 30.09.2016 making compliance in connection with the assessment proceeding for A.Y. 2015-16. 2. In compliance to the said letter dated 30.09.2016, the assessee has made reply on 19....
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....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 case was transferred to Raipur. Further, the assessment was completed by the AO i.e. ITO-4(1), Raipur and assessee has not raised any objection in respect of issuance of notice u/s. 143(2) by the Jurisdictional AO i.e. by the ITO-4(1), Raipur. Thus, the assessee is not entitled to call in question the jurisdiction as per provision of section 142(3) ....
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....d-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, the assessee has shown his jurisdictional AO as Ward-2, Rewa for A.Y. 2016-17 for which return was filed on 07.12.2016. It is also pertinent to mention here that the notice u/s 143(2) was also issued by the ITO, Ward-2, Rewa in year 2016. Thus, the ITO, Ward-2, Rewa has rightly assumed the jurisdiction for issuance of notice u/s 143(2) of the Act. 4.1.5 It is important to mention here that the assessee is well informed for the jurisdictional assessing offic....
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....ject 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 defect in the exercise of functions. The Legislature did not intend collection of revenue to be bogged down on account of technical plea of jurisdiction. It has, therefore, prescribed the limit up to which the plea of jurisdiction may be raised. As provided in section 124(5)(a), the right is lost as.; soon as the assessment has been completed. Even where the right is exercised before the assessment is completed, the question is to be decided by the Commissioner or by the Board. Courts do ....
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....ed. 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 Development Authority, Mohali, [2014] 42 taxmann.com 160 (Chandigarh-Trib.) and various other decisions. 4.1.7.6. On the contrary, the case of CIT vs SS Ahluwalia, [2014] 46 taxmann.com 169 (Delhi), is more appropriate and relevant. In this case, the Hon'ble Delhi HC has laid down several propositions including (i) Sections 120, 124 and 127 recognize flexibility and choice, both with the assessee and the authorities i.e., the Assessing Officer before whom return of income could be filed and assessment could be ....
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.... 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 is duty cast on the petitioner to state the true facts 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 riot 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 ....
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.... 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, the assessment was completed by the A.O i.e. ITO-4(1), Raipur and assessee has not raised any objection in respect of issuance of notice u/s 143(2) by the Jurisdictional AO i.e. by the ITO-4(1), Raipur. Thus, the assessee is not entitled to call in question the jurisdiction as per provision of section 142(3) of the Act.... In the present case, the assessee has not raised objection in respect of issuance of notice by jurisdictional assessing officer during assessment proceeding, therefore, the assessee has no right to call in question of jurisdiction of the AO in res....
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....on 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 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 th....
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....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 assessment proceedings and after 263 proceeding at this stage cannot be said out of omission or ignorance of law and procedure. As already submitted earlier, the appellant assessee at the very first instance itself had filed her objection to the jurisdiction vide letter dated 19.10.2016, hence the observations of the Ld.AO in this Para to the extent it arraigns the assessee as well as the counsel/authorized representatives are uncalled for, in the nature of disparaging remarks, contemptuous, derogatory, bald, baseless & unsubstantiated allegations and dissuading. The appellant herein takes strong objection to such remarks and it is most humbly submitted that such rem....
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....ortium 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 (29.11.2022) (ITAT Raipur). 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.... 4.1.7.2 In the case of CIT vs Siri Paul Oswal, [2007] 293 ITR 273 (Punjab & Haryana)..... 4.1.7.3 In Mantoo Sarkar v. Oriental Insurance Co. Ltd. [2009] 2 SCC 244... 4.1.7.4 In the case of Kiran Singh v. Chaman Paswan, AIR 1954 SC 340..... 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 Allaha....
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....ons 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 Officer to continue with the proceedings from the stage where the error had occurred. Distinguishable on facts. Distinguishable on facts. In the present case, objection regarding jurisdiction raised at the earliest stage hence, provisions of section 124(3) are not applicable. Distinguished in the case of Prashant Chandra v. CIT [2076] 387 ITR 88 (All. HC) where it was held as "Where from assessment year 2012-13, assessee had shifted his place of business from Lucknow to New Delhi and, accordingly, filed his income-tax return at Delhi by carrying out all formalities therefor and making requisite amendm....
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....rts 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 her objection to the jurisdiction vide letter dated 19.10.2016. Further, as already stated above, the JAO did not issue any notice u/s. 143(2) before completing the assessment proceedings u/s. 143(3). 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] 746 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. M.R.Garm....
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....ity 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 i.e. vide his letter dated 19.10.2016, Page 7 of APB objected to the notice u/s 143(2), dated 19.06.2016 issued by ITO, Ward-2, Rewa. It was stated by the assessee in her letter dated 19.10.2016 that as she during the year under consideration as well as in the preceding years had filed her returns of income based on the Raipur address, viz. "H. No.762, C/o. Shri Narendra Kumar Tiwari, Sunder Nagar, Raipur (C.G.)-492 001", therefore, her case records a/w. other document relating to the same may be transferred to her jurisdictional A.O i.e. ITO, Ward-2(1), Raipur (under Commissioner of Income Tax, Raipur). Although, the A.O in his "written submission" had claimed that the assessee vide her aforesaid letter dated 19.10.2016 had only requested for transferring of her case to ITO, Ward-2....
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....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 the jurisdiction over the case of the assessee was vide Transfer order No.104001987254/dated 17.11.2011 transferred from ITO, Ward-2(4), Raipur (old) to ITO, Ward-2, Rewa (new). 14. Admittedly, as stated by the A.O in his "Written Submissions" (placed on our record) the jurisdiction over the case of the assessee as per order of the Jt. Commissioner of Income Tax, Range-4, Raipur dated 15.11.2014 was transferred from ITO, Ward-2(1), Raipur to ITO, Ward-4(1), Raipur. As is discernible from the assessment order and the "Written Submissions" of the A.O, the ITO Ward-2, Rewa pursuant to the letter/objection dated 19.10.2016 filed by the assessee with him had transferred her case records on 04.08.2017 to ITO, Ward-2(1), Raipur. Apart from that, as observed by the A.O in his "Written Submissions", on the basis of the order passed by the Jt. Commissioner of Income Tax, Rang....
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....emale 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, INDIA 762, SUNDER NAGAR, Sunder Nagar ADARSH CHOWK , RAIPUR, 492 013, Chhattisgarh, INDIA 16. On the basis of the aforesaid facts, we find substance in the claim of the Ld. AR that as the jurisdiction over her case at the stage of issuance of notice u/s. 143(2) of the Act dated 19.09.2016 was admittedly vested with the ITO, Ward-4(1), Raipur, therefore, in absence of any notice issued by the latter u/s. 143(2) of the Act, the assessment framed by him vide his order passed u/s. 143(3) of the Act dated 29.11.2017 could not be sustained and is liable to be struck down on the said count itself. Our aforesaid conviction that issuance of a valid notice u/s. 143(2) of the Act is a sine-qua-non for framing of the assessment is supported by the judgments of the Hon'ble Supreme Court in the cases of ACIT & Anr. Vs. Hotel Blue Moon [2010] 321 ITR 362 (SC) and CIT Vs. Laxman Das Khandelwal (2019) 417 ITR 325 (SC). 17. At this stage, we may herein o....
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....fied. 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 received from either of the authority contemplated in Section 2(7A) of the Act, i.e, who was either vested with the relevant jurisdiction by virtue of any directions or orders issued under sub- section (1) or sub-section (2) of Section 120 of the Act or any other provision of the Act; or any such authority who is directed under clause (b) of sub-section (4) of Section 120 to exercise or perform all or any of the powers and perform all or any of the functions conferred on, or assigned to, an Assessing Officer under the Act. It was submitted by the Ld. AR that as in the present case the assessee was in receipt of notice u/s. 143(2) of the Act, dated 01.08.2012 from the Income-Tax Officer, Ward-1(2), Jabalpur, who did not fall within the meaning of "Assessing Officer" as defined in Section 2(7A) of the Act, therefore, no obligation was cast upon the assessee to have questioned his jurisdiction on receipt of the same. The Ld. AR in support of his afore....
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....ot 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 the correctness of the submission of the revenue seeking to sustain their stand by referring to a notice issued by the assessing officer, who at the relevant point had no jurisdiction over the assessee and, on facts, found that there is no valid compliance of section 143(2) of the Act as the notice issued under section 143(2) of the Act by the assessing officer/ Income Tax Officer,Ward-3(1) had no jurisdiction over the assessee at the relevant time. ii) S. K. Industries v. ACIT [2022] 141 taxmann.com 568 (Del. HC) - SLP of the Revenue Dismissed by the Hon'ble Supreme Court in [2022] 141 taxmann.com 569 (SC) Be that as it may, in the considered view of the Court, the AO having jurisdiction i.e. Respondent No1 ought to have issue a notice under section 143(2)(a) of the Act within the prescribed time limit i.e., 30th September, 2014 in order to proceed with the assessment. Considering that a similar mistake of an AO not having jurisdiction over the Assessee i....
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....d 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 time. The same is quashed. iv) PCIT v. Cosmat Traders (P.) Ltd. [2023] 146 taxmann.com 207 (Cal. HC) Section 143 of the Income-tax Act, 1961 - Assessment - Scrutiny assessment (Issue of notice) - Assessment year 2012-13 - Whether where Assessing Officer passed an assessment order under section 143(3) without issuing notice under section 143(2) and in pursuance with notice issued under section 143(2), by authority who had no jurisdiction over assessee at relevant time, such assessment order was rightly set aside by Tribunal -Held, yes - Whether submission of revenue that assessee had not raised question of jurisdiction before Assessing Officer but participated in assessment proceedings and, therefore, could not have raised said issue before Tribunal could not have been accepted as it was not case of revenue that assessee consciously waived his right to raise such a jurisdictional issue - Held, yes v) PCIT v. M/s. OSL Developers Pvt. Ltd. ITAT/145/2022 (16.11.2022) (Cal. HC) When it i....
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....27 and 148, of the Income-tax Act, 1961 - Income-tax authorities - Jurisdiction of (Territorial jurisdiction) - Assessment year 2008-09 - Assessee was a non- resident Indian - Assessment in case of assessee was completed - Subsequently, Commissioner (International Taxation) issued a reopening notice against assessee at its address at Madurai as PAN address of assessee was in Madurai and, accordingly, transferred case of assessee to Assessing Officer at Madurai - Assessee contended that assessee was residing in Shimoga, Karnataka and thus, appropriate officer to assess assessee would be officer at Shimoga and impugned notice issued at Madurai was not valid - It was noted that assessee was staying in Madurai prior to period relating to assessment year 2011-12 and admittedly, no return of income was filed by him during his stay at Madurai as he had not earned any income liable to tax in that period - From assessment year 2010-11 onwards, assessee had shifted to Shimoga, Karnataka, carrying on business there and returns of income were filed from assessment year 2012-13onwards at Shimoga, till date - These returns of income were processed and intimations were issued wherein address of a....
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....ings finds support from the recent order of the Hon'ble High Court of Orissa in the case of Pr. CIT, Sambalpur Vs. Badal Prakash Jindal HUF & Ors. (2023) 150 taxmann. com 483 (Orissa), wherein it was held as under: "12. Indeed, if the original re-assessment order itself was not validly passed, the subsequent revisional order by the PCIT was required to be held invalid. 13. No substantial question of law arises from the impugned order of the ITAT. The Court is therefore not inclined to frame the questions of law as urged by the Revenue in the present appeals. It will be noted her that in Para-19 of the impugned order of the ITAT, the Revenue has not disputed that the connected appeals raised similar issues. 14. The appeals are accordingly dismissed in the above terms." Also, the said view is supported by the order of a coordinate bench of the Tribunal i.e ITAT, Mumbai in the case of Westlife Development Ltd. Vs. Pr. CIT-5, Mumbai (2017) 88 taxmann.com 439 (Mumbai). It was, inter alia, observed by the tribunal that an assessee can challenge the validity of an order passed u/s.263 of the Act on the ground that the impugned assessment order was non-est. Indulgence of the tribuna....
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....o doubt that after passing of the original assessment order, the primary (i.e. original proceedings) had come to an end and attained finality and, therefore, outcome of the same cannot be disturbed, and therefore, the original assessment order framed to conclude the primary proceedings had also attained finality and it also cannot be disturbed at the instance of the assessee, except as permitted under the law and by following the due process of law. Under these circumstances, it can be said that effect of the original assessment order cannot be erased or modified subsequently. In other words, whatever tax liability had been determined in the original assessment order that had already become final and that cannot be sought to be disturbed by the assessee. But, the issue that arises here is that if the original assessment order is illegal in terms of its jurisdiction or if the same is null & void in the eyes of law on any jurisdictional grounds, then, whether it can give rise to initiation of further proceedings and whether such subsequent proceedings would be valid under the law as contained in Income Tax Act? It has been vehemently argued before us that the subsequent proceedings (....
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.... is a fundamental principle well-established that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties." 8.3. This judgment was subsequently followed by Hon'ble Supreme Court in the landmark case of Sushil Kumar Mehta vs Gobind Ram Bohra, (1990) 1 SCC 193, wherein an issue arose whether a decree can be challenged at the stage of execution and whether a decree which remained uncontested operates as res-judicata qua the parties affected by it. Hon'ble apex court, taking support from aforesaid judgment, observed as under: "In the light of this position in law the question for determination is whether the impugned decree of the Civil Court can be assailed by the appellant in execution. It is already held that it is the Controller under the Act that has e....
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.... subsequently noticed by Hon'ble Gujarat High Court in the case of P. V. Doshi 113 ITR 22(Gujrat). This case arose under the Income Tax Act with reference to the provisions of Section 147 dealing with re-assessment. The facts were that the assessment was sought to be reopened under Section 147 and notice under section 148 was issued. Validity of reopening was not challenged upto Tribunal and additions were challenged on merits only. The Tribunal restored the matter to the Assessing Officer with some directions to reexamine the issue on merits. When the matter came back to the assessing officer the assessee specifically raised the point of jurisdiction to reopen the assessment, contending that the notice of reopening was prompted by a mere change of opinion. The AO rejected plea of the assessee but the AAC accepted this ground and also held the reassessment to be bad in law on jurisdictional ground. Against the order of the AAC the Revenue went in appeal before the Tribunal and specifically raised the plea that the question of jurisdiction to reopen the assessment having been expressly given up by the assessee in the appeal against the reassessment order in the first round, the asse....
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....f reassessment are not validly initiated at all, the order would be a void order as per the settled legal position which could never have any finality or conclusiveness. If the original order is without jurisdiction, it would be only a nullity confirmed in further appeals". In this view of the matter, Hon'ble High Court finally answered the reference in favour of the assessee. 8.7. It is further noted that many of these judgments were discussed and followed by the co-ordinate bench of the Tribunal in the case of Indian Farmers Fertilizers Co-operative Ltd vs JCIT 105 ITD 33 (Del), wherein a similar issue had arisen. In this case, the issue raised before the bench was whether it is open to the assessee, not having appealed against the reassessment order, to set up or canvass its correctness in collateral proceedings taken for rectification thereof u/s 154. The bench minutely analysed law in this regard and applying the principle of 'coram non judice' and following aforesaid judgments of the supreme court, it was held that if an assessee seeks to challenge the reassessment proceedings as being without jurisdiction, when action for rectification is sought to be taken on the assumpti....
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..... If the impugned assessment order passed u/s 143(3) was illegal or nullity in the eyes of law, then, whether the CIT had a valid jurisdiction to pass the impugned order u/s 263 to revise the non est assessment order: Having decided the aforesaid two issues, the next issue that is to be decided by us is about the validity of order passed u/s 263 by the Ld. CIT seeking to revise the assessment order which was nullity in the eyes of law. 10.1. We have discussed in detail in earlier part of our order that an invalid order cannot give birth to legally valid proceedings. It is further noticed by us that some of the judgments relied upon by the Ld. Counsel have already addressed this issue. This issue has also been decided by the co-ordinate bench (Delhi Bench of Tribunal) in the case of Krishna Kumar Saraf vs CIT (supra). The relevant part of the order is reproduced below: "17. There is no quarrel with the proposition advanced by Id. DR that the proceedings u/s 263 are for the benefit of revenue and not for assessee. 18. However, u/s 263 the Id. Commissioner cannot revise a non est order in the eye of law. Since the assessment order was passed in pursuance to the notice U/S 143(2)....
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....f null and void, then, the Commissioner of Income-Tax cannot exercise his revisionary jurisdiction u/s.263 of the Act is also supported by the order of the ITAT, Allahabad in the case of Hari Mohan Das Tandon (HUF) Vs. Pr. CIT (2018) 91 taxmann.com.199 (Allahabad). It was observed by the tribunal by relying on the order of the ITAT, Mumbai in the case of Westlife Development Ltd. (supra) that as the assessment order was in itself null and void as it was based on a non-est return, therefore, the Commissioner could not have exercised his jurisdiction under section 263 of the Act. Observations of the tribunal for the sake of clarity are culled out as under: "10.4 The Learned Counsel for the Assessee also argued that since the assessment is framed on the basis of the revised return filed on 1st July, 2013 and according to Ld. CIT it was a non-est return, if assessment is framed on non est return, the assessment itself would be mill and void and could not be subject matter of jurisdiction under section 263 of the I.T. Act. In support of his contention, he relied upon the decision of the ITAT, Mumbai Bench in the case of Westlife Development Ltd. (supra) in which original assessment or....
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....e assessment order was bad in law. Ld. CIT(DR)'s submission is that assessee has not challenged the assessment order. However, since the assessee was not aggrieved with the assessment order, therefore, he did not challenge. However, nothing turns on this when we consider the issue in the backdrop of proceedings initiated u/s 263 by ld. Commissioner. The moot point for consideration is as to whether this objection can be entertained at this stage of proceeding or not. In this regard we find that the decision of Hon'ble Delhi High Court in the case of Escorts Farms Pvt. Ltd. (supra), which we have extensively reproduced earlier, clearly supports the assessee's plea. 17. There is no quarrel with the proposition advanced by ld. DR that the proceedings u/s 263 are for the benefit of revenue and not for assessee. 18. However, u/s 263 the ld. Commissioner cannot revise a non est order in the eye of law. Since the assessment order was passed in pursuance to the notice u/s 143(2), which was beyond time, therefore, the assessment order passed in pursuance to the barred notice had no legs to stand as the same was non est in the eyes of law. All proceedings subsequent to the sa....