TaxTMI 
TaxTMI 
2024 (6) TMI 1598
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....For that, when the very initiation of reassessment proceeding for any previous Assessment years after grant of 12A registration is not permissible, the reassessment order so passed is invalid, as such, the impugned initiation of revision proceeding u/s.263 of the Act on the basis of a invalid order is ab-initio Void, as such, the same being not sustainable in the eye of law, needs to be quashed in the interest of justice. 3. For that when by way of evidences and explanations the Assessee explained that there is no difference in balance sheet, the learned Principal CIT has committed gross error of law, in ignoring the evidence and explanation of the Assessee and by enhancing the Assessment order by making addition of Rs.1,95,32,396.00 and Rs.54,50,000.00 by applying section 69 of the Act, as such, the revision order passed and consequential additions made therein, being not sustainable in the eye of law is liable to be quashed in the interest of justice. 4. For that, the learned Principal CIT, Sarnbalpur has committed gross error of law as well as of fact in initiating and completing the revision proceeding, ignoring the objections and explanations along with evide....
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....05.2023 and after considering the submissions of the assessee, held that the order passed by the AO u/s.147 r.w.s.144B of the Act is erroneous as well as prejudicial to the interest of revenue and the income has been directed to be enhanced by Rs. 2,49,82,396/- and also directed to initiate the penalty proceedings u/s.271(1)(c) of the Act. 4. In ground No.1 & 2, the assessee has challenged the jurisdiction of the ld. Pr. CIT in passing the order u/s.263 of the Act on the premise that the reassessment order so passed was invalid, therefore, the Pr. CIT has no jurisdiction to initiate reviosnary proceedings u/s.263 of the Act. Ld. AR submitted that in the present case, the assessee has filed the application in the Form 10A seeking registration u/s.12AA of the Act on 14.02.2020 before the ld. CIT(E) and it had given registration/s.12AA of the Act vide order dated 29.06.2020 w.e.f. AY.2020-2021. The necessary copy of the registration as granted is reproduced as under :- 5. Ld. AR further drew our attention to the notice issued u/s.148 of the Act by the ITO, Ward-1, Baripada for the impugned assessment year which was issued on 30th March, 2021. The said notice is reproduced hereun....
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....d, therefore, at this stage, the issue of legality of order passed u/s.147 of the Act cannot be challenged. He further submitted that the ld. Pr. CIT had proper jurisdiction to pass the revision order in the instant case. However, he failed to bring any judicial pronouncement to support this argument. 8. We have perused the material available on the record and considered the rival submissions. At the outset, the issue raised by the ld. AR is with regard to validity of the reassessment order passed u/s.147 r.w.s.144B of the Act, dated 20.03.2022 from which the present revisonary proceedings u/s.263 of the Act originates. It is true that before us assessee has challenged the order passed by the ld. Pr. CIT u/s.263 of the Act, however, since the assessee has raised the issue of validity of reassessment order, we first answer the question as to whether such legality of the assessment framed could be examined in appellate proceedings challenging the order passed u/s.263 of the Act or not. In this regard, during the course of hearing, the ld.AR of the assessee has placed reliance on the decision of the coordinate bench of Mumbai Tribunal in the case of Westlife Development Ltd. (supra....
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....ssment 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 IT Act ? It has been vehemently argued before us that the subsequent proceedings (i.e. collateral proceedings) derive strength only from the order passed in the original proceedings (i.e. primary proceedings). Thus, if order passed in the original proceedings is itself illegal, then that cannot give rise to valid revision proceedings. Therefore, as per law, the validity of the order passed in the primary (original) proceedings should be allowed to be examined even at the subsequent stages, only for the limited purpose of examining whether the collateral (subsequent) proceedings have been initiated on a valid legal platform or not and for examining the validity of assumption of jurisdiction to initiate the collateral proceedings. If it is not so allowed, then, it may so happen that though order passed in the original proceedings was illegal and thus order passed in the subsequent proceedings in turn wo....
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....ree 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 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 exclusive jurisdiction to order ejectment of a tenant from a building in the urban area leased out by the landlord. Thereby the Civil Court inherently lacks jurisdiction to entertain the suit and pass a decree of ejectment. Therefore, though the decree was passed and the jurisdiction of the Court was gone into in issue Nos. 4 and 5 at the ex-parte trial, the decree there-under is a nullity, and does not bind the appellant. Therefore, it does not operate as a res judicata. The Courts below have committed grave error of law in holding that the decree in the suit operated as res judicata and the appellant cannot raise the same point once again at the execution." 8.4. Similar view has been taken by Hon'ble Supreme Court by following aforesaid judgments recently in ....
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....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 assessee was debarred from raising that point again before the AAC and the AAC was equally wrong in permitting the assessee to raise that point which had become final in the first round and in adjudicating upon the same. The plea of the Revenue impressed the Tribunal which took the view that after its earlier order in the first round of proceedings the matter attained finality with regard to the point of jurisdiction which was given up before the AAC and not agitated further and that in the remand proceedings what was open before the AO was only the question whether the addition was justified on merits and the point regarding the jurisdictional aspect was not open before the AO. According to the Tribunal, the assessee having raised the ....
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....ppealed 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 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 assumption of the validity of the reassessment order, then the assessee has to step in and protect its interests and the liberty to quest ion even the validity of the reassessment proceedings ought to be given to it......." (emphasis, italicised in print, supplied). 8.8. Similar view was taken in another decision of the Tribunal in the case of Dhiraj Suri vs. Addl. CIT (2006) 99 TTJ (Del) 525 : (2006) 98 ITD 87 (Del). In the said case, appeal was filed by the assessee before the Tribunal against the levy of penalty. In the appeal challenging the penalty order, the assessee challenged the validity of block assessment order which had determined the tax liability of the assessee on the basis of....
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....t 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) 239 CTR (Bom) 183 : (2011) 52 DTR (Bom) 71 : (2011) 331 ITR 236 (Bom). When an assessment framed by the learned AO is unsustainable in the eyes of law, the said invalid and illegal order cannot be subject matter of s. 263 proceedings. On this count also, the revision order passed by the learned Principal CIT under s. 263 of the Act deserves to be quashed. 10. The coordinate bench of Ahmedabad Tribunal in the case of Shri Jignesh Lilachand Shah (supra), had an occasion to deal this issue where the Tribunal in para 6 has observed as under :- 6. The next issue for consideration before us is that once it is held that the assessment order itself is null and void, can such assessment order be the subject matter of revision under section 263 of the Act. In our view, it is a well-settled principle of law that once the assessment order passed itself is null and void, the same cannot be the subject matter revision under section 263 of th....
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....ssessment year were initiated by issue of notice dated 30.03.2021 and the assessment order u/s.147 r,w,s,144B was passed on 20.03.2022. From the perusal of series of events, it is seen that when the notice u/s.148 of the Act was issued, the assessee was granted registration u/s.12AA of the Act w.e.f. A.Y.2020-2021. As per third proviso to sub-section 2 to Section 12A of the Act, which is inserted w.e.f. 1.6.2020, no proceedings u/s.147 could be initiated only for non-registration of such trust if the application has already been made when the notice was issued. Since the said proviso is inserted w.e.f. 1.6.2020 and notice u/s.148 of the Act was issued on 30.03.2021, the same is applicable in the present case. The relevant provisions of Section 12A(2) of the Act are reproduced hereunder :- Conditions for applicability of sections 11 12A. (1) xxxxxxx and 12 . (2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made: [Provided t....
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....enue with regard to the existence of the assessee society for charitable purposes in the assessment years under appeal. 14. Since the facts of the case of the assessee are similar to the facts of Sree Sree Ramkrishna Samity (supra), which has also linked to the fact that the case of the assessee is reopened solely for the reason that it has not got registered u/s.12A of the Act for the impugned assessment year, therefore, by following the decision of the coordinate bench of the Tribunal in the case of Sree Sree Ramkrishna Samity, cited supra, we are of the view that the proceedings initiated u/s.147 of the Act against the assessee society are illegal and bad in law and consequently the order passed u/s.147 r.w.s.144B of the Act is invalid. 15. Since the order passed u/s.144 r.w.s.144B of the Act is an invalid order, any further proceedings originated from the said order cannot be held as valid proceedings which includes the revisonary proceedings initiated by the ld. Pr.CIT, Sambalpur u/s.263 of the Act. In this regard, we find support from the observations made by the ITAT Mumbai Bench of the Tribunal in the case of Westlife Development Ltd. (supra), in para 10.1 to 11, whic....