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TMI Blog2024 (8) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... 418 - ITAT MUMBAI] jurisdiction or the legality of the proceedings can be agitated in a subsequent proceedings or even in a collateral proceedings or an execution proceedings also. If, the original order is illegal or without jurisdiction, the subsequent or collateral proceedings arisen out of such orders or proceedings, cannot be held to be valid. Since the exercise of revision jurisdiction in this case by the ld. PCIT was wrong and illegal, therefore, the consequential order passed u/s 143(3) of the Act was also not sustainable in the eyes of law and the same is accordingly quashed. Appeal of the assessee stands allowed - SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. MANISH BORAD, ACCOUNTANT MEMBER For the Appellant : Shri Narendra Kedia, AR For the Respondent : Shri Sanjay Paul, Addl. CIT-DR ORDER Per Sanjay Garg, Judicial Member: 1. The present appeal has been preferred by the assessee against the order dated 19.07.2023 of the National Faceless Appeal Centre [hereinafter referred to as CIT(A) ] passed u/s 250 of the Income Tax Act (hereinafter referred to as the Act ). 2. The assessee in this appeal has taken the following grounds of appeal: 1. That on the facts and in the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting to Rs. 11,80370/- in his proprietorship concern and the said amount needed to be disallowed. He further observed that the assessee had shown sundry creditors of Rs. 1,67,79,246/- in its personal balance sheet and this fact also did not commensurate with the nature of business of the assessee. He observed that the Assessing Officer had not examined all these aspects of cash deposits and sundry creditors etc and accordingly held the order as erroneous and prejudicial to the interest of the revenue. He accordingly set aside the assessment order for de novo assessment. Thereafter, a fresh assessment order was framed by the Assessing Officer u/s 143(3) r.w.s 263 of the Act, wherein, the Assessing Officer made the addition of Rs. 99,78,000/- on account of unexplained cash credits in the bank account of the assessee and also of Rs. 47,70,140/- on account of unexplained sundry creditors vide order dated 31.12.2018. The ld. CIT(A) confirmed the addition so made by the Assessing Officer vide impugned order dated 19.07.2023. The assessee has come in appeal agitating the aforesaid additions. 4. The ld. counsel has invited our attention to the copy of the order of the PCIT dated 15.01.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original assessment order dated 30.12.2016 was neither erroneous and not prejudicial to the interest of the revenue and therefore, the order of the PCIT dated 15.01.2018 was bad in law and therefore, consequential assessment proceedings were also bad in law. The ld. counsel has relied the CBDT Instruction No.20/2015 dated 29.12.2015, the relevant part of which is reproduced as under: During the course of assessment proceedings in Limited Scrutiny cases, it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs. five lakhs (for metro charges, the monetary limit shall be Rs. ten lakhs) requiring substantial verification on any other issue(s), then, the case may be taken up for Complete Scrutiny with the approval of the Pr. CIT/CIT concerned. However, such an approval shall be accorded by the by the Pr. CIT/CIT in writing after being satisfied about merits of the issue(s) necessitating Complete Scrutiny in that particular case such case shall be monitored by the Range Head. The ld. counsel has pointed out that such procedure as mentioned in the above Circular was not followed and no approval was granted by the concerned PCIT/CIT for con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the very authority of the Court to pass any decree, and such a defect cannot be cured even by consent of parties. iii. M/s Westlife Development Ltd. vs. Principal CIT in ITA No.688/Mum/2016 (ITAT, Mumbai, G Bench), wherein, the Tribunal has held as under: That the original assessment order passed u/s 143(3) dt. 24.10.2013 was null and void in the eyes of law as the same was passed upon a non-existing entity and, therefore, the CIT could not have assumed jurisdiction under the law to make revision of non-est order and, therefore, the impugned order passed u/s 263 of the Act by the CIT is also nullity in the eyes of law and therefore, the same is hereby quashed. 8. We note that the issue is squarely covered by the decision of the Coordinate Mumbai Bench of the Tribunal in the case of Valiant Glass Works Pvt. Ltd. vs. ACIT in ITA No.1612/Mum/2013 dated 27.07.2016 (incidentally the author of the said order being the Judicial Member herein), wherein, the Coordinate Bench, after deliberating upon various case laws, has observed as under: 12. A perusal of the above order reveals that various Courts of Law including the Hon'ble Supreme Court has held that a defect of jurisdiction wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so been followed by the co-ordinate bench of the Tribunal in the case of Indian Farmers Fertilizers Co-operative Ltd vs KIT 105 lTD 33 (Del) as discussed above. Even, the Tribunal in the case or Dhiraj Suri 98 lTD 87 (Del) in an appeal against the penalty order has held that if the assessment order was without jurisdiction, there was no question of levy of penalty, therefore, it was open to the assessee to set up the question of validity of the assessment in the appeal against levy of penalty. The Hon'ble Bombay High Court in the case of investors Industrial Corporation 194 ITR 548 (Bombay) has held that the assessee was entitled to challenge the jurisdiction of the AO to initiate reopening of assessment proceedings before the CIT (A) in the second round of proceedings even though it has not raised the same before earlier proceedings before the AO or in the earlier appeal. 13. In the light of various case laws as cited above, the proposition that is coming out is that the jurisdiction or the legality of the proceedings can be agitated in a subsequent proceedings or even in a collateral proceedings or an execution proceedings also. If, the original order is illegal or without ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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