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2023 (7) TMI 1149 - AT - Income TaxRevision u/s 263 - Validity of order passed by the A.O. u/s.143(3) questioned - Jurisdiction AO to initiate assessment u/s 143(2) - HELD THAT - As the jurisdiction over her case at the stage of issuance of notice u/s. 143(2) 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 Hotel Blue Moon 2010 (2) TMI 1 - SUPREME COURT and CIT Vs. Laxman Das Khandelwal 2019 (8) TMI 660 - SUPREME COURT . The assessment framed by the ITO, Ward-4(1), Raipur, i.e the jurisdictional A.O, on the basis of notice issued u/s.143(2) by the ITO, Ward-2, Rewa, i.e. a non-jurisdictional Officer is nothing but nullity. Thus now when the impugned order of reassessment u/s 143(3), in itself had been passed on the basis of invalid assumption of jurisdiction by the AO and thus is invalid and bereft of any force of law; or in fact non-est in the eyes of law, therefore, the same could not have been revised by the Pr. CIT under Sec. 263 of the Act. Accordingly, we herein quash the order passed by the Pr. CIT under Sec. 263 of the Act, dated 28.03.2021 for want of valid assumption of jurisdiction. Decided in favour of assessee.
Issues Involved:
1. Validity of the ex-parte Revision Order under Section 263 of the Income Tax Act, 1961. 2. Jurisdictional validity of the Revision Order under Section 263. 3. Validity of the assessment order under Section 143(3) of the Income Tax Act, 1961. 4. Delay in filing the appeal. Summary: 1. Validity of the ex-parte Revision Order under Section 263: The assessee contended that the Revision Order passed by the Pr. CIT under Section 263 was highly unjustified, bad in law, and against the principles of natural justice. It was argued that the order was passed without providing a reasonable opportunity of being heard and should be set aside on this ground alone. 2. Jurisdictional validity of the Revision Order under Section 263: The assessee challenged the jurisdiction of the Pr. CIT to pass the Revision Order under Section 263, arguing that the Assessing Officer (AO) had conducted necessary inquiries and investigations. The assessee contended that the AO had applied his mind to the material on record, and thus the Revision Order was void ab initio. 3. Validity of the assessment order under Section 143(3): The assessee argued that the assessment order passed by the AO under Section 143(3) was valid as it was based on diligent inquiries and a conscious application of mind. The Pr. CIT, however, found that the AO had failed to carry out necessary verification and apply his mind, rendering the assessment order erroneous and prejudicial to the interest of the revenue. The Pr. CIT identified specific issues such as unexplained investment sources, lack of gift deed submission, and unverified self-assessment tax payments. 4. Delay in filing the appeal: The appeal involved a delay of 351 days. However, the delay was found to be covered by the Hon'ble Supreme Court's orders in Suo Moto Writ Petition (Civil) No.3 of 2020, which excluded the period from 15.03.2020 to 28.02.2022 for the purpose of limitation. Therefore, the appeal was admitted as being within the limitation period. Conclusion: The Tribunal found that the jurisdiction over the case of the assessee was vested with the ITO, Ward-4(1), Raipur. The notice issued under Section 143(2) by the ITO, Ward-2, Rewa was deemed invalid as it was issued by a non-jurisdictional officer. Consequently, the assessment framed by the ITO, Ward-4(1), Raipur was struck down for lack of a valid notice under Section 143(2). The Tribunal also held that the Pr. CIT could not revise an assessment order that was non-est in the eyes of law. Thus, the order passed by the Pr. CIT under Section 263 was quashed, and the appeal filed by the assessee was allowed.
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