TaxTMI 
TaxTMI 
2025 (9) TMI 1732
X X X X Extracts X X X X
X X X X Extracts X X X X
....Shri Sunil Kumar, Chartered Accountant has also filed an affidavit that in his opinion, the impugned order was not challengeable before the Tribunal. In the light of the aforesaid, we consider it appropriate case to condone the delay. Accordingly, the appeal is admitted for hearing. 3. The assessee in the appeal in his hand has not only challenged the impugned order u/s 263 of the Act dated 17.03.2022 but has also challenged the reopening proceedings itself on the assertion that there was no valid reason to believe and there was invalid sanction u/s 151 of the Act. As with regard to this aspect, whether while challenging the impugned order u/s 263 of the Act, the assessee can also raise the challenge to the original assessment order. We find that the Co-ordinate Bench of the Tribunal in the case of Shobhit Goel (HUF) vs PCIT in ITA No. 2622/Del/2024, vide order dated 27.02.2025 has taken note of the decision of the Co-ordinate Bench of the Mumbai Tribunal Tribunal in the case of Westlife Development Ltd. reported in (2016) 49ITR (T) 406 (Mumbai) and held that while challenging the order u/s 263 of the Act, the assessee has locus to challenge the original assessment order also, w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....#39; 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 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 can not 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice to the appellant. In considering that contention at p. 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 quest ion fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 subsequently noticed by Hon'ble Gujarat High Court in the case of P.V. Doshi vs. CIT (1978) 113 ITR 22 (Guj). This case arose under the IT Act with reference to the provisions of s. 147 dealing with re-assessment. The facts were that the assessment was sought to be reopened under s. 147 and notice under s. 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 AO with some directions to reexamine the issue on merits. When the matter came back to the AO 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g 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 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. Jt. CIT (2007) 107 TTJ (Del) 98 : (2007) 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 under s.154. The bench minutely analysed law in this regard and applying the principle of 'coram n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....non-est and we hold accordingly. Further, the coordinate bench of Mumbai Tribunal in the case of Aishwarya Rai Bachchan (Supra), has held as under:- 4.1. One more excruciating fact that needs to be addressed in the instant case is that the learned Principal CIT herein is only seeking to revise the order passed by the learned AO under s. 143(3) r/w s. 147 of the Act dt. 12th Dec., 2018. In the said reassessment proceedings, the learned AO had not even made any addition despite the fact that he had reason to believe that income of Rs. 11,55,330 had escaped assessment in the hands of the assessee which was sought to be taxed under s. 56 of the Act as per the reasons recorded. Hence, when the very basis of reasons recorded by the learned AO was ultimately not added by the learned AO in the reassessment proceedings, then the primary reason to believe that income of the assessee had escaped assessment fails and such reassessment cannot be treated as a valid order in the eyes of law. The same is to be declared as void ab initio. Reliance in this regard was rightly placed on the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Jet Airways (I) Ltd. (2011)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ade by the coordinate benches of the Tribunal in aforesaid cases, we are of the view that the validity of order passed u/s.263 of the Act on the ground that the re-assessment order from which the said proceedings emerged out was non-est, can be challenged in appellate proceedings against u/s. 263 of the Act. Thus, respectfully following the above decisions of the coordinate benches of the Tribunal, we are of the considered view that in the present appellate proceedings against the order of the ld. Pr. CIT u/s. 263 of the Act, the validity of the order passed u/s. 147/143(3) of the Act can be examined." 4. Now before us, on behalf of the assessee, the Ld. Counsel has submitted that sanction has been granted in mechanical manner and for that it is submitted that while granting sanction u/s 151 of the Act, reference has been made to deleted/omitted section 147(b) of the Act, which is no more in statute. 5. The ld. DR has submitted that it is merely an administrative approval and a technical mistake; otherwise the authority giving sanction was very well aware of the issues. 6. In this context, we find that the assessee had sought for copy of documents in regard to the assessme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en deleted long bank. 9. On identical set of facts, the Co-ordinate Bench in ITA Nos. 92- 94/Mum/2019, dated 28/10/2020, had the occasion to consider an identical approval and held as under:- "5.3. We find that the reopening in the instant case has been made beyond four years from the end of the relevant assessment year which requires sanction of approval from the ld. PCIT u/s.151(1) of the Act. We find from page 1 of the Case Law Paper book filed by the assessee before us containing proforma in the prescribed format seeking sanction of approval u/s.151(1) of the Act, that the said proforma was sent by the ld. AO to the ld. PCIT through proper channel i.e. Additional CIT on 08/01/2016. For the sake of convenience, the entire proforma is reproduced herein:- ........... 5.4. From the aforesaid proforma, it could be seen that question No.7 specifically mandate the ld. AO to mention whether the provisions of Section 147(a) or 147 (b) or both the sections are applicable. In response thereto, the ld. AO had mentioned only 147(b). We find that the provisions of Section 147(b) has been omitted from the statute book long back and was certainly not in forc....