TaxTMI 
TaxTMI 
2022 (10) TMI 1215
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....61 (`the Act') is beyond jurisdiction, illegal and bad in law and is liable to be quashed. 2. That on the facts and circumstances of the case and in law, the impugned order passed by the PCIT is illegal and bad in law, being barred by limitation prescribed under section 263(2) of the Act. 3. That on the facts and circumstances of the case and in law. the impugned order passed by the PCIT seeking to revise the reassessment order dated 30.12.2018 passed under section 147/143(3) of the Act, is without jurisdiction, illegal and bad in law. 4. That on the facts and circumstances of the case and in law, the impugned order passed under section 263 of the Act, without appreciating that the twin conditions of that section viz., reassessment order being erroneous as well as prejudicial to the interests of the Revenue, were not satisfied, and hence is illegal and bad in law. 5. That on the facts and circumstances of the case, the impugned order passed by the PCIT without affording reasonable opportunity of being heard to the Appellant in violation of principles of natural justice, is illegal and bad in law. 6. That on the facts and circumstance....
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....to lockdown starting from April 09, 2021, therefore, the registry of the Income-Tax Appellate Tribunal, Raipur was not operational until May 30, 2021. It was submitted by the Ld. AR that as the lockdown restrictions were eased and it came to the knowledge of the assessee that the registry of Income-Tax Appellate Tribunal, Raipur had started functioning, therefore, the appeal was filed on 10.06.2021. The Ld. AR submitted that the Hon'ble Supreme Court on March 08, 2021 vide its suo-motto order had initially excluded the period from March 15, 2020 till March 14, 2021 for calculating the period of limitation. It was submitted by him that the Hon'ble Supreme Court had thereafter vide its order dated April,27, 2021 restored its earlier order dated March 08, 2021, and it was provided that the period of limitation w.e.f. March 15, 2020 would stand extended till further order. The Ld. AR submitted that in view of the second Covid-19 wave in India, the Hon'ble Apex Court had pursuant to its aforesaid orders directed that the period of limitation as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand ex....
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....fter framed the reassessment vide his order passed u/s.143(3) r.w.s 147, dated 30.12.2018 accepting its last assessed income as such. 5. The Pr. CIT after framing of the reassessment by the A.O vide his order passed u/s.143(3) r.w.s 147, dated 30.12.2018 called for the record of the assessee company. On a perusal of the record, it was observed by the Pr. CIT that the assessee company had during the year under consideration received share capital and share premium, as under: Date of issue Name of the Allottees Nature of Transactions Share capital issued in the form of Equity/ CCS/Preferences shares (No.) Face value (Rs.) Security premium per share(Rs.) Amount (Rs.) 20/11/2011 SFI Parcel Services Pvt. Ltd. Allotment of equity shares Equity-2095628 10/- 790/- 1,67,70,68,220/- 20/11/2011 Gupta Coalfield & Washeries Ltd. Allotment of equity shares Equity-99404 10/- 790/- 7,95,50,039/- Total 1,75,66,18,259/- The Pr. CIT observed that the assessee company by issuing equity shares of a face value of Rs.10/- per share at a premium of Rs.790/- each had duri....
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....ated 21.08.2013 - Question No.18 & 21 specifically called for the details of the shareholders, and also their identity and creditworthiness. It was submitted by the assessee that in reply to the aforesaid query it had vide its letter dated 16.01.2014 submitted with the AO the confirmations, copies of the bank statements and returns of income of the shareholders to whom shares were allotted during the year under consideration. It was the claim of the assessee that as the A.O after vetting the details that were filed with him in support of the identity and creditworthiness of the share applicants, as well as the genuineness of the transactions, had accepted the same, thus, the possible and a plausible view so arrived at by him could not be dislodged u/s 263 of the Act. The assessee referring to the "reasons to believe" on the basis of which its case was reopened vide notice issued u/s.148 of the Act, dated 28.03.2018, submitted before the Pr. CIT that its concluded assessment was in itself reopened for the purpose of verifying the authenticity of the transactions of raising of share capital and share premium during the year under consideration. The assessee in order to buttress its a....
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....ubstituted as against that of the revisional authority in the garb of proceedings under Sec. 263 of the Act. It was the claim of the assessee before the Pr. CIT that now when proper enquires had been conducted by the A.O both at the time of framing of the original assessment u/s.143(3), dated 06.03.2014, and also in the course of the reassessment proceedings that had culminated vide an order passed u/ss.143(3)/147, dated 30.12.2018, therefore, it was incorrect on his part to allege that the same was passed without making proper enquiries. It was the claim of the assessee that as it had justified both the transactions of receipt of share capital and share premium by furnishing the requisite details/documents as were called for by the A.O in the course of the reassessment proceedings, viz. copies of returns of income, confirmation of accounts, bank statements and audited balance sheets of the share subscribers, viz. M/s. SFI Parcel Services Pvt. Ltd. and M/s. Gupta Coalfield & Washeries Limited and had also explained at length the source of their respective investments, therefore, it could by no means be held that the order passed by the AO u/s.143(3) r.w.s 147, dated 30.12.2018 was ....
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....y reason for reopening of the assessee's case u/s.147 of the Act, but the A.O dispensing with proper investigation and enquiries on the said issue had without any application of mind framed the assessment vide his order passed u/s.143(3) r.w.s 147, dated 30.12.2018. It was further observed by the Pr. CIT that though the assessee company during the year under consideration had made a cash deposit of Rs. 60 lac in its bank account no. 164010200012546 with Axis bank, Branch: Bilaspur, which, inter alia, was a reason for reopening of its case, however, the AO despite himself not being convinced about the source of the said cash deposit which was not commensurate with the assessee's returned income had summarily accepted the same without carrying out any further verification. The Pr. CIT on the basis of his aforesaid observations was of the view that the failure of the AO to carry out necessary enquiry and verifications had rendered the reassessment order passed by him as erroneous in so far it was prejudicial to the interest of the revenue under section 263 of the Act. Accordingly, the Pr. CIT after drawing support from certain judicial pronouncements and triggering the "Explanation 2"....
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....o an order u/s.143(3) r.w.s. 147, dated 30.12.2018. The Ld. A.R in order to buttress his aforesaid contention had taken us through the replies that were filed with the A.O in the course of the aforesaid respective assessment/reassessment proceedings. The Ld. A.R also drew our attention towards the extracts of the replies that were brought to the notice of the Pr. CIT during the course of proceedings before him. It was submitted by him that now when the A.O had framed the impugned assessment after due application of mind and carrying out necessary verifications on the issue in question, i.e., receipt of share capital and share premium by the assessee company and had arrived at a possible and plausible view, therefore, the Pr. CIT could not have sought for substitution of his view as against that arrived at by the A.O in the garb of proceedings u/s.263 of the Act. The ld. A.R in order to fortify his contention that detailed submissions as regards receipt of share capital and share premium from the aforementioned share applicants, viz. M/s SFI Parcel Services Pvt. Ltd. and M/s Gupta Coalfield & Washeries Ltd. were furnished in the course of the reassessment proceedings took us through....
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....iz.M/s Gupta Coalfield & Washeries Ltd. towards share capital and share premium took us through the confirmation of the said party that was filed in the course of the original assessment proceedings. Our attention was also drawn towards the copy of the bank account of the aforementioned party at Page 63 to 68 of APB, wherein the complete details of the source from where the payments made by M/s Gupta Coalfield & Washeries Ltd. to the assessee company were made from were reflected. The Ld. AR had also taken us through the copy of the Income-tax return of the aforesaid investor company disclosing an income of Rs.24.96 crore (approx.), Page 61 of APB. It was submitted by the Ld. AR that all the aforesaid documents substantiating the identity and creditworthiness of the share applicant, as well as the genuineness of the transactions were furnished in the course of the original assessment proceedings. The Ld. AR also took us through the copy of account of M/s Gupta Coalfield & Washeries Ltd. as was reflected in the books of account of the assessee company during the year under consideration i.e. A.Y. 2011- 12, Page 111 of APB. Our attention was also drawn towards the financials of the a....
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....ot be sustained and was liable to be struck down. The Ld. A.R in support of his aforesaid contention had relied on the judgment of the Hon'ble High Court of Delhi in the case of Pr. CIT-3, New Delhi Vs. Delhi Airport Metro Express Pvt. Ltd., ITA No.705/2017. It was submitted by the Ld. AR that in the said case as the Pr. CIT while exercising his revisional jurisdiction u/s.263(1) of the Act had without undertaking any enquiry by himself had sent back the entire matter to the file of the A.O for fresh assessment, therefore, the Tribunal had on the said count itself set-aside the order passed by the CIT u/s.263 of the Act, which order on further appeal by the revenue was upheld by the Hon'ble High Court. The Ld. AR in support of his aforesaid contention had also relied on the judgments of the Hon'ble High Court of Delhi in the case of Pr. CIT-6, New Delhi Vs. Modicare Limited, ITA No.759/2016, dated 14.09.2017 and Income-Tax Officer Vs. D.G Housing Projects Ltd. (2012) 343 ITR 329 (Del). The Ld. A.R submitted that as the Pr. CIT in the present case had failed to examine the issue in question, i.e., receipt of amount by the assessee company towards share capital and share premium and ....
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....sment for the year under consideration, but in fact was reopened in order to rope in the income which had escaped assessment within the meaning of "Explanation (2)(c)" of Section 147 of the Act. The Ld. A.R in order to buttress his aforesaid contention that there was no failure of the assessee to fully and truly disclose all the material facts necessary for its assessment for the year under consideration i.e A.Y 2011-12 had drawn our attention to the copy of the "reasons to believe" on the basis of which the concluded assessment of the assessee company was reopened u/s.147 of the Act, Page 81 to 83 of APB. The Ld. A.R submitted that as the case of the assessee did not satisfy either of the two conditions carved out in the "1st proviso" of Sec. 147 of the Act, therefore, the A.O had traversed beyond the scope of his jurisdiction and had wrongly reopened its concluded assessment on the basis of an invalid notice issued u/s.148, dated 14.03.2018 i.e. much beyond the prescribed period of four years from the end of the relevant assessment year i.e. A.Y. 2011-12 that had expired way back as on 31.03.2016. 15. The Ld. A.R on the basis of his aforesaid contentions submitted, that now wh....
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....ct on the ground that the impugned assessment order was non-est. The Ld. A.R submitted that in the aforesaid case though the department had assailed the order of the tribunal before the Hon'ble High Court but had accepted its view on the issue in hand by not carrying the same any further in appeal. It was submitted by the ld. AR that as the aforesaid order of the tribunal in Westlife Development Ltd. (supra) had thereafter been upheld by the Hon'ble High Court of Bombay vide its order passed in ITA No.1168/2017, dated 28.09.2021, thus, the finding of the tribunal on the issue in hand had attained finality. In sum and substance, it was the claim of the Ld. AR that the aforesaid view taken by the Tribunal in the case of Westlife Development Ltd. (supra) having been accepted by the department had attained finality. The Ld. AR in support of his contention that when the assessment order is itself null and void, then, the Commissioner of Income-Tax could not exercise his revisional jurisdiction u/s. 263 of the Act had also relied on the order of the ITAT, Allahabad in the case of Hari Mohan Das Tandon (HUF) Vs. Pr. CIT (2018) 91 taxmann.com.199 (Allahabad-Trib). The Ld. AR had also on th....
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....ccurred by reason of failure of the assessee for either of the two conditions, viz. (a). to make a return of income under Section 139 or in response to notice issued under Sub-section (1) of Section 142 or Section 148; or (b). to disclose fully and truly all material facts necessary for his assessment for that purpose. It was submitted by the Ld. AR that as there was absence of satisfaction of either of the aforesaid two conditions in the case of the present assessee, for the reason that there was neither any failure on the part of the assessee to make a return of income under Section 139 or in response to notice issued under Sub-section (1) of Section 142 or Section 148; nor was there any failure on its part to disclose fully and truly all material facts necessary for its assessment for the year under consideration, therefore, the A.O had wrongly assumed jurisdiction and after expiry of four years from the end of the assessment year reopened its concluded assessment u/s.147 of the Act. The Ld. A.R in support of his aforesaid contention had also relied on the order of the ITAT, Mumbai in the case of Aishwarya Rai Bachchan Vs. Pr. CIT-8, ITA No.754/Mum/2021, dated 25.02.2022. 17.....
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....refore, the same had attained finality. It was averred by the ld. D.R that the assessee could not be permitted to challenge the validity of the order passed by the A.O u/s.143(3) r.w.s 147, dated 30.12.2018 in the course of the present proceedings which arises from the order passed by the Pr. CIT u/s 263 of the Act, dated 27.03.2021. 19. Rebutting the aforesaid contentions of the department the ld. A.R took us through the copy of the bank account of the aforesaid investor, viz M/s. SFI Parcel Services Pvt. Ltd, Page 156 of APB. The ld. A.R submitted that the copy of the bank account of M/s SFI Parcel Services Pvt. Ltd. clearly revealed the complete details of investment made with the assessee company and the same was accepted by the A.O only after carrying out necessary verifications to his satisfaction. 20. We shall first deal with the claim of the Ld. AR that as the impugned order of reassessment passed by the A.O u/s.143 (3) r.w.s 147, dated 30.12.2018 was in itself invalid and non-est, therefore, the Pr. CIT could not have validly assumed jurisdiction and revised the same vide his order passed u/s. 263 of the Act, dated 27.03.2021. Before proceeding any further we deem it....
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....the said company is 52162514 which is 21.92% holding of shares of ACB (India) Ltd. This investment was made before the year 2009. Since, ACB (India) Ltd. has financial interest in the aforesaid company [Mauritious Based company namely Warburg Pinckers) which is located outside India, evidently the source of fund in MCCPL also get it's root in ACB (India) Ltd. Hence, being an ultimate beneficiary, the case of MCCPL also needs to be reassessed for the initial A.Y.2011-12. 4. Details of investment by Pineridge Investment Ltd. In ACB (India) Ltd. :- (a) In the year 2005-06 [on 03/03/2006), 597409 equity shares were allotted to Pineridge investment Ltd. total valued Rs.200,01,25,332/- @ Rs.10/-(face value) + Rs.3348/- (premium) per share. (b) In the year 2007-08 [0n 09/04/2007] 173990 equity shares were purchase from secondary market by Pinerdge Investment Ld. total valued Rs.64,23,86,600/- @ Rs.3694/- ( face value + premium) per share. (c) Further, in the year 2007-08 [0n 14/03/2008], 298705 equity shares were allotted to Pineridge investment Ltd. against part conversion of warrants @Rs.675/- per warrant and Rs.4023/- per share which include....
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....shares Equity-2095628 10/- 790/- 1,67,70,68,220/- 20/11/2011 Gupta Coalfield & Washeries Ltd. Allotment of equity shares Equity-99404 10/- 790/- 7,95,50,039/- The assessee company has issued equity shares having face value of Rs.10/- per share at a high premium of Rs.790/- during the F.Y.2010-11 raising thereby a fund of Rs.176 crore. The difference of Fair Market Value per share and share premium received against each share is to be ascertained. 6. There is an information available on record regarding transaction of cash deposit exceeding Rs.10 lakhs (total deposit of Rs.60,00,000/- ) which was deposited against Pan AACCM8217A during the F.Y.2010-11 relevant to A.Y.2011-12. This is in the name of Maruti Explochem Pvt. Ltd. and the same has been later changed into Maruti Clean Coal & power Ltd. This is mentioned against FIU A/C No.164010200012546 maintained that Axis Bank, Bilaspur. Interest of Rs.2737/- on refund amount for the A.Y.2009-10 was receipt against the PAN on 03-03-2011. Although, the assessee has filed his return of income for the said assessment year on 30.09.2011 declaring total income at Rs Nil, the said....
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....the reassessment order under Sec. 143(3) r.w.s 147, dated 30.12.2018, therefore, such invalid order of reassessment could not have been revised by the Pr. CIT under Sec. 263 of the Act. As observed by us hereinabove the Ld. A.R has assailed the validity of the reassessment order passed under Sec. 143(3) r.w.s 147, dated 30.12.2018, for the reason that the same had been passed in violation of the mandate of the "1st proviso" of Sec. 147 of the Act. Admittedly, as stated by the Ld. A.R and, rightly so, in a case where an assessment had earlier been made under Section 143(3) of the Act and action thereafter is sought to be taken for reopening of the case u/s.147 of the Act after expiry of four years from the end of the relevant assessment year, then, it would be necessary that the twin conditions contemplated in the statutory provision are satisfied, viz. (i). the AO must have reason to believe that income chargeable to tax has escaped assessment; AND (ii). he must also have a reason to believe that such escapement had occurred by reason of failure on the part of the assessee for either of the two conditions, viz. (a). to make a return of income under Section 139 or in response to not....
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....ure of the other facts and it is for the A.O to decide what inferences are to be drawn from the facts before him. It was observed by the Hon'ble Apex Court that the extended period of limitation for initiating proceedings under the "1stproviso" of Section 147 of the Act would only get triggered where the assessee had failed to disclose fully and truly all material facts necessary for its assessment. Now, in the case before us, we are unable to comprehend as to what facts the assessee had failed to disclose which would have otherwise justified bringing its case within the realm of the extended time period contemplated in the "1st proviso" of section 147 of the Act. As noticed by us at length hereinabove at Para No(s) 5.1, 9 & 10, now when the assessee company had disclosed fully and truly all the material facts as regards the aforesaid issue, i.e., receipt of share capital and share premium from the aforementioned subscriber companies as was necessary for its assessment for the year under consideration i.e AY 2011-12, therefore, it could by no means be held to be in default for the purpose of bringing it within the sweep of "1st proviso" of Section 147 of the Act. (B). Cash depos....
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....nbsp; Total Rs. 3,40,000/- We, thus, are of the considered view that no failure can be attributed to the assessee to disclose fully and truly all material facts as regards the cash deposits in its aforesaid bank account i.e A/c No.164010200012546 with Axis Bank, Branch: Bilaspur, which was necessary for its assessment for the year under consideration i.e. AY. 2011-12. On the contrary, in our considered view the AO had proceeded with on the basis of misconceived and incorrect facts as regards the cash deposit of a sum of Rs. 60 lac by the assessee in its aforesaid bank account during the year under consideration. 24. Be that as it may, a perusal of the aforesaid "reasons to believe" even otherwise reveals that the A.O had at no stage ever stated that the concluded assessment of the assessee was being reopened after the expiry of a period of four years from the end of the relevant assessment year i.e. A.Y.2011-12, for the reason of failure on its part to disclose fully and truly all material facts necessary for its assessment for the said year. As observed by the Hon'ble High Court of Delhi in the case of Haryana Acrylic Manufacturing Company (supra), in a case wher....
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....n under section 147 could have been taken after the four year period indicated above. So, the key question is whether or not the petitioner had made a full and true disclosure of all material facts. In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken. We have already mentioned above that the reasons supplied to the petitioner does not contain any such allegation. Consequently, one of the conditions precedent for removing the bar against taking ....
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....ck to the facts involved in the case before us, it is discernible from record that though the A.O had at length referred to the impugned escapement of income of the assessee company and in order to rope in the same is stated to have initiated reassessment proceedings u/s.147 r.w "Explanation (2)(c)", but there is no whisper in the reasons that such escapement of income was due to any failure on the part of the assessee to disclose fully and truly all material facts which were necessary for its assessment for the year under consideration. We, thus, in terms of our aforesaid observations concur with the claim of the Ld. AR that the jurisdiction assumed by the A.O u/s.147 of the Act for reopening after expiry of four years from the end of the relevant assessment year i.e. A.Y 2011-12 the concluded assessment of the assessee that was earlier framed vide order u/s.143(3), dated 06.03.2014 clearly militates against the "1stproviso" to section 147 of the Act. 26. Now, we shall deal with the second limb of the issue involved in the case before us, i.e., as to whether or not the assessee is well within its right to assail the validity of order passed by the A.O u/ss.143(3) r.w.s 147, dat....
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.... time in the course of the present appellate proceedings before us be taken as a basis by the assessee for assailing the sustainability of the order passed by the Pr. CIT under Sec. 263 of the Act, dated 27.03.2021?. 28. 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 27.03.2021 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 27.03,2021 challenge the validity of the impugned assessment order passed by the A.O u/s. 143(3) r.w.s.147, dated 30.12.2018. 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 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 im....
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....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 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....
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.... 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-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 impugn....
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....s 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 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 ques....
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....ing 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 of 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....
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....evise 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 are culled out as under: 10. 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 ....
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....n 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 department had already attained finality. Our aforesaid view that when the assessment order is in itself 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 1stJuly, 2013 and according to Ld. CIT it was a non est return, if assessment is framed on non est return, the assessment i....
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....corts 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 culled out as under: 16. Admittedly the notice u/s 143(2) was issued beyond time and, therefore, the 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 ....