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TMI Blog2010 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ide by this Court? (ii) Whether in the facts and in the circumstances of the present case, the order of the tribunal having been passed in contravention to the settled judicial principles and binding judicial authorities of the Supreme Court as well as those of various High Court is perverse? (iii) Whether in the facts and in the circumstances of the present case, the re-assessment proceedings were barred by time as the same were issued beyond the statutory period of 6 years?" 2. The brief facts which are imperative to be exposited for adjudication of these appeals are that the assessee had filed returns of income for the assessment years in question on 2.12.1999 and the said returns were processed under Section 143(1) on 5.3.2002. The assessing officer noted that the assessee company had made disclosure of income under the VDIS, 1997. The assessee failed to deposit the taxes in accordance with the VDIS and, therefore, the declaration was held to be void in terms of Section 67(2) of the Scheme. Notices under Section 148 of the Act were issued on 24.12.1999. The assessing officer had issued notices under Section 143(2) / 142(1) along with the questionnaire. In response to the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the facts of the present case, also notices under Section 148 were sent by registered post and the Managing Director of the assessee company had duly attended the reassessment proceedings in compliance of notices under Section 143(2) & 142(1). Hence there is no valid ground to challenge the service of notices under Section 148." 5. It is worth noting that the CIT(A) had also considered the other contentions of the assessee and dismissed the appeal. 6. Being grieved by the aforesaid order, the assessee carried the appeal to the tribunal and the tribunal decided the appeals on 25.2.2003 pertaining to the assessment years 1990-91, 1991-92 and 1992-93 and the appeals relating to the assessment years 1995-96 and 1996-1997 on the same day by a separate order. The tribunal took note of the submissions of the learned counsel for the appellant therein and proceeded to pass the following order: In these three appeals directed against the consolidate order passed by the CIT(A), common grounds have been raised and for purposes of deciding these appeals, which have been head together, we reproduce the grounds pertaining to A.Y. 1990-91 as under:- "On the facts and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act had not been served on the assessee. Being of this view, he opined that the returns submitted were invalid and, hence, no assessment could be framed on the basis of invalid returns. 10. Grieved with the aforesaid order of the CIT(A), the revenue preferred appeals before the tribunal and in appeal, it was contended that the issue regarding reopening of assessment had attained finality by the tribunal in the first round of litigation and if the assessee was grieved, it was open to attack the same by preferring a further appeal before the superior court and the authorities below being bound by the terms of the order of remand could not have looked into other grounds, especially which had been put to rest. It was urged that the CIT(A) cannot sit over the judgment of the tribunal as that would lead to anarchy and create a dent in the hierarchy of adjudicatory system. 11. The said stand and stance was opposed by the learned counsel for the assessee contending, inter alia, that valid service of notice under Section 148 of the Act confers jurisdiction on the assessing officer to frame an assessment order and if no valid notice was served upon the assessee, then the proceedings w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Commissioner has appositely expressed the view that when there has been no notice, the assessment proceedings have been initiated without there being a jurisdictional foundation. The assessing officer had erroneously assumed that the jurisdiction to reassess the assessee cannot be found fault with as the first appellate authority had scrutinised the record in a minutest manner and such a finding could not have been dislodged by the tribunal solely on the ground that the CIT(A) could not have delved into the same because of the scope of remand. The tribunal has fallen into serious error by unsettling the order of the CIT(A) despite plethora of decisions to the effect that when an order is passed without jurisdiction, the same is a nullity and its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon even at the stage of execution or even in a collateral proceeding. D. The tribunal has failed to appreciate the ratio laid down by the Gujarat High Court in CIT Gujarat II v. Nanalal Tribhovandas and Anr., (1975) 100 ITR 734 though the same is squarely applicable to the case at hand. E. The tribunal on the earlier occasion had decided the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Gift-tax, (2001) 117 TAXMAN 234 (Delhi). 16. At the very outset, it is obligatory on our part to state that though the appeal was admitted on the three substantial questions of law, yet basically it relates to one singular question, i.e., whether the CIT(A), after the remand by the tribunal to the assessing officer to adjudicate in a particular manner in a limited compass, could have dwelled upon the issue relating to non-service of a notice under Section 148 of the Act on the ground that such non-service makes the original order of assessment which has already travelled to the tribunal a nullity. 17. Mr. Kapur, as indicated hereinabove, has commended us to many a decision on the concept of nullity. We think it appropriate to refer to the decisions to understand the factual matrix and the principle rendered therein. In Mohammad Noah (supra), the State of Uttar Pradesh had filed an appeal after obtaining the certificate of fitness granted by the High Court of Allahabad against the judgment and order of the High Court in a writ petition quashing the departmental proceeding against the respondent who was a Constable in the Uttar Pradesh Police force. It was contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... „coram non-judice, and that its judgment and decree would be nullities. The question is what is the effect of section 11 of the Suits Valuation Act on this position." 19. It is worth noting that in the said decision, their Lordships took note of Section 11 of the Suits Valuation Act and held that it is a self-contained provision and no objection to jurisdiction based on over-valuation or under-valuation can be raised otherwise in accordance with it. Their Lordships with regard to territorial jurisdiction took note of Section 21 of the Code of Civil Procedure and opined that the objection relating to the place of suing should not be entertained by an appellate Court or revisional Court unless there was a consequent failure of justice and eventually held the objection to jurisdiction, both territorial and pecuniary, as technical. 20. In Baradakanta Mishra (supra), the Supreme Court held as follows: "The High Court within the power and control vested under Article 235 could hold disciplinary proceedings against the appellant and could recommend the imposition of punishment of reduction in rank on the appellant. The actual power of imposition of one of the major punishments, viz., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act may in the case of a firm be addressed to any member of the firm but his contention is that this applies to a firm in existence and not to a firm dissolved. If the appellants' case is that as a result of dissolution of the firms the firms had discontinued their business as from the respective dates of dissolution they ought to have given notices of such discontinuance of their business under section 25(2) of the Act. Besides, in the present case, the main appellant has in fact been served personally and the other partners who may not have been served have made no grievance in the matter. We are, therefore, satisfied that it is not open to the appellants to contend that the proceedings taken by the Income-tax Officer under section 34(1)(a) are invalid in that notices of these proceedings have not been served on the other alleged partners of the firms. Incidentally it may be pointed out that the finding of the Income-tax Officer in respect of all the three firms is that the only persons who had interest in the business carried on by the said firms were B. Audeyya and C. Pitchayya. It is remarkable that B. Audeyya has not cared to challenge the proceedings or to question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a jurisdictional notice for initiating proceedings for making an assessment under Section 147 of the Act and any defect in that notice cannot be cured by anything done by the assessing officer subsequently. The Bench opined that the vagueness cannot be removed by reference to the other documents on the record. In the said case, the notice under Section 148 of the Act was not served on all the adult members of the partitioned HUF as required under Section 283(1) of the Act and, hence, the same was invalid. 28. In Sh. Ashok Kumar Bharti (supra), a notice was issued to three members who formed an AOP. The assessing officer completed the assessment on the AOP comprising of two persons. On an appeal being filed, the CIT(A) noted that the notice was issued under Section 148 to an AOP of three persons while the assessment was framed on AOP of two persons and cancelled the assessment. The revenue went in appeal before the tribunal which upheld the order of the CIT(A). On a reference being made, the Bench opined that there was no valid notice to the assessee against whom the assessment order was passed. Being of this view, the Court dismissed the appeal. 29. On a perusal of the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rns in each of the three cases fell short of the statutory period of 30 days. The assessing officer rejected the plea on the ground that the said issue along with the several points which were urged before him in the hearing after the remand by the appellate authority were not raised at the time of the original reassessment proceedings. It is further held by the assessing officer that the assessment has been set aside by the first appellate authority on a specific point and, therefore, the assessee could not raise the above contention at that particular stage and, accordingly, proceeded to deal with the matter on merits. The matter was taken up in appeal and the appellate authority came to hold that the issue of notice of 30 days is a condition precedent for exercise of jurisdiction by the income tax officer and as the said condition precedent was not satisfied, the orders of reassessment were illegal and void. Being dissatisfied, the revenue went up in appeal before the tribunal and it came to the conclusion that whether the notices were valid or not was a pure question of law for adjudication for which no further facts need be found and as the tribunal opined that there was no va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nasmuch as the CIT(A) had found that there was no service of notice. The subtle distinction in the Gujarat case and the present one is that the issue that was urged before the CIT(A) on an earlier occasion who had addressed itself to a great extent and further the same was raised before the tribunal, which finally concluded that the notices were served. It is not a case of contention not being raised with regard to jurisdiction and further it was not a case that the first appellate authority conferred jurisdiction on the assessing officer which exclusively vests with him. Thus, in our considered opinion, the said decision is not applicable. 34. In P.V. Doshi (supra), the Division Bench was dealing with the issue whether on the facts and in the circumstances of the case, the tribunal was right in holding that once it had passed an order, the matter became final with regard to the point which was settled by the appellate assistant commissioner and could not be agitated before the tribunal unless it was taken upto the High Court. In the said case, a proceeding for reassessment under Section 147 was initiated in response to which the assessee filed its return. The assessee raised obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Justice Coleridge in Holmes v. Russel [1841] 9 Dowl 487 as under: "It is difficult sometimes to distinguish between an irregularity and a nullity; but the safest rule to determine what is an irregularity and what is a nullity is to see whether the party can waive the objection; if he can waive it, it amounts to an irregularity; if he cannot, it is a nullity." 35. After so holding, the Bench came to hold as follows: "17. …In fact, no question of any bar of res judicata even at the subsequent stage of the same proceeding could arise in the present case for the simple reason that the original order is said to be without jurisdiction. The first condition in invoking any bar of res judicata is the condition about the competence of the court. Similarly, the provision of finality in this relevant provision in section 254(4) could also not be attracted in such a case, where the question admittedly, went to the root of the jurisdiction and if that contention was upheld, it would have made all the proceedings of reassessment totally void and without jurisdiction. As per the aforesaid settled legal position such a point could not be waived and there can be no question of the earlier reman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of law unrelated to the right of the parties to a previous suit, is not res judicata in the subsequent suit. Rankin, C.J., observed in Tarini Charan Bhattacharjee's case, ILR 56 Cal 723 = (AIR 1928 Cal 777). "The object of the doctrine of res judicata is not to fasten upon parties special principles of law as applicable to them inter se, but to ascertain their rights and the facts upon which these rights directly and substantially depend; and to prevent this ascertainment from becoming nugatory by precluding the parties from reopening or recontesting that which has been finally decided." 12. A question relating to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court. If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question would not, in our judgment, operate as res judicata. Similarly by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute the question cannot operate as res judicata between the same parties, whether the cause of action in the subsequent litigation is the same or otherwise. 13. It is true that in deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d apply only when the lis was inter partes and had attained finality in respect of the issues involved. The said principle will, however, have no application inter alia in a case where the judgment and/or order had been passed by a court having no jurisdiction therefor, and/or in a case involving a pure question of law. It will also have no application in a case where the judgment is not a speaking one."[Emphasis Added] 40. In Bishwanath Prasad Singh v. Rajendra Prasad and another, (2006) 4 SCC 432, it has been held thus:- "43. The question of determination of (sic) being a pure question of law, the principles of res judicata shall have no application. Therefore, the High Court, in our opinion, committed a manifest error in interfering with the judgment and decree passed by the trial court as also the appellate court in exercise of its jurisdiction under Section 100 of the Civil Procedure Code." 41. In this context, we may profitably refer to the decision in Chief Justice of A.P. v. L.V.A. Dixitulu,(1979) 2 SCC 34 wherein it has been held: ITA No.978/2010 and connected matters Page 30 of 36 "23[24]. As against the above, Shri Vepa Sarathy appearing for the respective first re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g regard to the fact that public law remedy could not have been resorted to, the impugned orders must be held to be illegal and without jurisdiction and are liable to be set aside. All orders and actions taken pursuant to or in furtherance thereof must also be declared wholly illegal and without jurisdiction and consequently are liable to be set aside. They are declared as such."[Emphasis Added] 43. In the case at hand, neither the CIT(A) nor the tribunal lacked inherent jurisdiction to deal with the controversy with regard to service of the notice. It was a question of fact and assuming it is a jurisdictional fact by which the assessing officer could assume jurisdiction as the condition precedent was required to be satisfied so that the assessing officer could get jurisdiction but once a finding was arrived at that the notice was served on the parties, the same would bind the parties. In this context, we may fruitfully refer to the decision rendered in Kali Prasad & Ors. v. Deputy Director of Consolidation & Ors, (2000) 6 SCC 640, wherein the Apex Court has held thus: "12. …Section 331 read with Schedule II bars jurisdiction of the civil court only in respect of such reliefs wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t entitled in law to raise the said issue again. 46. The controversy can be looked into from another angle. The tribunal has dealt with the issue and directed a remand on a limited score. The said order of remand was not assailed before the superior forum. In K.P. Dwivedi v. State of U.P. & Ors., (2003) 12 SCC 572 a two-Judge Bench of the Apex Court opined that when there is a limited remand, the authority concerned cannot travel beyond the same as the earlier findings could not be disturbed. 47. In Paper Products Ltd. v. Commissioner of Central Excise, Mumbai, (2007) 7 SCC 352 the Apex Court after reproducing the order passed by the Customs, Excise and Gold (Control) Appellate Tribunal (in short „CEGAT) held that it only related to the particular plea and no new pleas could not be advanced. 48. In Mohan Lal v. Anandibai and others, AIR 1971 SC 2177 a three-Judge Bench of the Apex Court expressed thus: "9. Lastly, counsel urged that now that the suit has been remanded to the trial Court for reconsidering the plea of res-judicata, the appellant should have been given an opportunity to amend the written statement so as to include pleadings in respect of the fraudulent nature and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as totally unwarranted. 51. We will be failing in our duty if we do not note a submission of the learned counsel for the revenue. Learned counsel has urged that if the CIT(A) would traverse beyond the orders passed by the tribunal that would bring in chaos and destroy the basic hierarchical principles in the administration of justice. In this regard, we may refer with profit to the following observations made by their Lordships in Bishnu Ram Borah and another v. Parag Saikia and others, AIR 1984 SC 898: "12. It is regrettable that the Board of Revenue failed to realize that like any other subordinate tribunal, it was subject to the writ jurisdiction of the High Court under Art. 226 of the Constitution. Just as the judgments and orders of the Supreme Court have to be faithfully obeyed and carried out throughout the territory of India under Art. 142 of the Constitution, so should be the judgments and orders of the High Court by all inferior courts and tribunals subject to their supervisory jurisdiction within the State under Arts. 226 and 227 of the Constitution. We cannot but deprecate the action of the Board of Revenue in refusing to carry out the directions of the High Court. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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