2008 (9) TMI 430 - AT - Income Tax

Summary

Issues:
1. Additional ground challenging jurisdiction under sections 158BC/158BD of the IT Act raised by the assessee.
2. Jurisdiction to make block assessment being challenged.
3. Entitlement to challenge jurisdiction of the ITO to initiate reassessment proceedings.
4. Validity of making block assessment in the absence of challenging jurisdiction earlier.
5. Admissibility of additional ground raised for the first time before the appellate authority.
6. Applicability of estoppel or res judicata in challenging assessment validity.

Analysis:

Issue 1: Additional ground challenging jurisdiction under sections 158BC/158BD of the IT Act raised by the assessee
The assessee sought to raise an additional ground challenging the jurisdiction of the assessing officer (AO) under sections 158BC/158BD of the IT Act. The ground was considered to be a pure question of law by the tribunal, and it was held that if the notice issued by the AO is invalid, the entire proceedings would be void. The tribunal admitted the additional ground and remanded the case to the CIT(A) for a fresh decision on all issues, including the jurisdictional challenge.

Issue 2: Jurisdiction to make block assessment being challenged
The tribunal emphasized that the jurisdiction of framing block assessment under sections 158BC/158BD of the Act can be challenged before any authority for the first time. It was established that challenging the jurisdiction of the assessing officer to make the reassessment order is crucial, and the appellate authority has the jurisdiction to entertain such challenges even if not raised earlier.

Issue 3: Entitlement to challenge jurisdiction of the ITO to initiate reassessment proceedings
The judgment highlighted that the assessee is entitled to challenge the jurisdiction of the Income Tax Officer (ITO) to initiate reassessment proceedings, even if not raised earlier before the ITO or in the earlier appeal. The principle was supported by legal precedents, emphasizing the importance of challenging jurisdiction at any stage.

Issue 4: Validity of making block assessment in the absence of challenging jurisdiction earlier
The tribunal rejected the Revenue's plea that the validity of making block assessment cannot be challenged if not raised at the time of assessment or in the first appeal. It was clarified that the bar of estoppel or res judicata does not apply when questioning the assessment's validity due to lack of valid jurisdiction.

Issue 5: Admissibility of additional ground raised for the first time before the appellate authority
The tribunal admitted the additional ground raised by the assessee for the first time before them, citing legal principles and precedents that support the admissibility of such grounds challenging jurisdictional provisions.

Issue 6: Applicability of estoppel or res judicata in challenging assessment validity
The judgment clarified that estoppel or res judicata does not apply when challenging the validity of an assessment based on lack of valid jurisdiction. The tribunal set aside the order of the CIT(A) and remanded the case for a fresh decision, emphasizing the importance of addressing all issues, including the jurisdictional challenge, in accordance with the law.