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2025 (9) TMI 1492
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....essment order. 3. The Ld.DR opposed admitting of the aforesaid additional ground. However, we note that this is purely a legal issue and adjudication of the said ground doesn't require any fresh investigation into the facts and the same is essentially a question of law. Therefore, we admit the additional ground by relying on the decision of the Hon'ble Supreme Court in the case of NTPC Ltd. v. CIT reported in [1998] 229 ITR 383 (SC). 4. By preferring additional Ground No.14 (supra) the assessee has raised the legal issue challenging the invocation of revisional jurisdiction u/s. 263 of the Act, by Ld PCIT without satisfying the essential preconditions as stipulated in section 263 of the Act. Explaining this ground, the Ld. AR submitted that the Ld. Pr. CIT has interdicted the order of the AO passed u/s. 144B/147 of the Act dated 09.03.2023 which order itself was bad in the eyes of law rendering it a nullity. Explaining further on this contention as to how the order of AO u/s. 144B/147 dated 09.03.2023 which has been interdicted by the Ld. PCIT u/s. 263 of the Act is bad in law, the Ld.AR pointed out that the Jurisdictional Assessing Officer (JAO) had reopened the original ass....
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....of notice u/s. 148 of the Act which was an action taken by the JAO, who didn't had the jurisdiction to issue notice after 29.03.2022 (supra), thereby, invalidating the assessment order passed u/s 147 on 09.03.2023. Hence, such an illegal action of the AO can be challenged in collateral proceedings u/s 263 of the Act as held by the Tribunal in a host of decisions wherein several decisions of the Hon'ble Supreme Court has been cited. The Ld AR referred to the following decision of this Tribunal is noted as under: a) Supersonic Technologies (P) Ltd. vs. PCIT in ITA No. 2269/D/2017 dated 10.12.2018 (ITAT, Delhi Bench) ITA. No.3009 to 3012/DEL/2017 "6.1.............It is well settled Law that assessee can challenge the validity of the reassessment proceedings in the collateral proceedings (relating to examination of validity of Order passed) under section 263 of the I.T. Act. We rely upon the Order of ITAT, Mumbai Bench in the case of Westlife Development Ltd., vs. PCIT 49 ITR (Tribu.) 406 in which it was held "allowing the appeal (i) that jurisdiction aspect of the Order passed in the primary proceedings can be examined in collateral proceedings also. Thus, the assess....
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....endered by Lucknow Bench of ITAT in the case of Inder Kumar Bachani (HUF) vs ITO 99 ITD 621 (Luck) and ITAT Mumbai ' G ' Bench in the case of M/s. Westlife Development Ltd. Vs Principal C.I.T. in ITA NO.688/Mum/2016. In both the decisions a view has been taken by the Tribunal that when an Assessment order passed u/s 147 of the Act was without jurisdiction, the Ld. PCIT cannot invoke the jurisdiction u/s 263 of the Act against such void or non-est order. In the second decision cited, the Mumbai bench of the Tribunal has specifically framed the following questions :- "1. Whether the assessee can challenge the validity of an assessment order during the appellate proceedings pertaining to examination of validity of order passed u/s 263? 2. Whether the impugned assessment order passed u/s 143(3) dated 24-10-2013 was valid in the eyes of law or a nullity as has been claimed by the assessee? 3. 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?" 9. On question no. 1 and 3 which is relevant to the....
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....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 said notice are of no consequence. Further, the decision of Hon'ble Madras High Court in the case of CIT Vs. Gitsons Engineering Co. 370 ITR 87 (Mad) clearly holds that the objection in relation to non service of notice could be raised for the first time before the Tribunal as the same was legal, which went to the root of the matter. 19. While exercising powers u/s 263 Id. Commissioner cannot revise an assessment order which is non est in the eye of law because it would prejudice the right of assessee which has accrued in favour of assessee on account of its income being determined. If Id. Commissioner revises such an assessment order, then it would imply extending/ granting fresh limitation for passing fresh assessment order. It is settled law that by the action of the authorities the limitation cannot be extended. Because the provisions of limitation are provided in the same 20. In view of above ....
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....proceedings for lack of jurisdiction can be challenged even in appellate proceedings arising out of a collateral proceeding. In view of the aforesaid legal position we will now examine the legal issue. For doing that first of all we have to examine whether the JAO in the present case, could have reopened the assessment of the assessee by issuance of notice dated 30.03.2022 u/s. 148 of the Act (which ultimately resulted in FAO passing the assessment order dated 09.03.2023). 12. In the present case, we note that the JAO, Smt. Jayalakshmi M. Iyer, Non-Corporate Ward-11(1), Chennai, has issued statutory reopening notice u/s. 148 of the Act on 30.03.2022 and thereafter reassessment order was passed by the Faceless Assessing Officer (FAO) by order dated 09.03.2023 which action we find is not in accordance with Sec.151/151A of the Act read with the faceless Scheme notified by CBDT on 29 March 2022 for assessment, reassessment or re-computation u/s. 147/issuance of notice u/s. 148 of the Act or for conducting of inquiry or issuance of show cause notice or passing of order u/s. 148A of the Act or sanction for issuance of notice under section 151 of the Act. The CBDT, in exercise of the p....
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....bay-468 ITR 168 11 29.08.2024 W.P.No.23573/2024 in the Case of ADIT(Int Taxn), Hyderabad v. Deepanjan Roy followed the decision in W.P.No.13353 of 2024 dated 24.07.2024 [Sri Venkataramana Reddy Patloola (supra)] 12 05.02.2025 Sappahire Educational & Charitable Trust v. The ITO, Exemptions Ward, Trichy. - Income Tax Appellate Tribunal, Chennai - ITA Nos.2416 & 2417/CHNY/2024 13 24.04.2025 Tecumseh Products India (P.) Ltd. v. Deputy Commissioner of Income-tax High Court of Telangana - 174 taxmann.com 1203 13. Even though, the Ld.DR supporting the action of the JAO issuing notice u/s. 148 of the Act submitted that both the NFAC & JAO have got concurrent jurisdiction and therefore, notice is valid and also submitted that there was no prejudice caused to the assessee. Therefore, he asserted that the action of the JAO issuing notice is valid and doesn't want us to interfere with the action of AO and instead, wants us to dismiss the legal issue and he cited the decision of the Hon'ble Delhi High Court & Hon'ble Calcutta High Court as well as the Hon'ble Single Bench of Madras High Court in favor of the Revenue and cited the following orders: * Triton....
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....n or after 29.03.2022, he relied on the binding decision of the Hon'ble Madras High Court in the case of Mark Studio India Pvt. Ltd. (supra), wherein their Lordships have held that it is mandatory for the FAO to issue the notice u/s. 148 of the Act on or after 29.03.2022 and if it has been issued by the JAO then such notice u/s. 148 of the Act would be invalid [i.e. the notice issued by the JAO will be invalid]. For such a proposition, the Hon'ble Madras High Court is noted to have followed the decision of the Hon'ble Bombay High Court in the case of Hexaware Technologies Limited v ACIT & Ors. [2024] 464 ITR 430 (Bom). The Hon'ble Madras High Court has held in Mark Studio India Pvt. Ltd. as under: All these petitions got listed in view of difference of opinion between two learned Single Judges. 2. Learned Single Judge in order dated 20.12.2024 in WP Nos.25223 of 2024 held that it does not matter if the Jurisdictional Assessing Officer (JAO) issues the notice and it is not mandatory that it should be issued by the Faceless Assessment Officer (FAO). Another learned Single Judge in order dated 21.04.2025 in WP No.22402 of 2024 and batch cases, followed what was held ....