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TMI Blog2025 (3) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, in our considered opinion, the notice issued u/s 148 in the case of the assessee is bad in law and consequently order passed u/s 147 r.w. s 144B is invalid. 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 revisionary proceedings initiated by the ld. Pr. CIT, Sambalpur u/s. 263 of the Act.
Thus as relying on Westlife Development Ltd. [2016 (6) TMI 1208 - ITAT MUMBAI] we quash the revisionary order passed u/s 263 as the re-assessment order passed u/s 144/143(3) is already held as invalid. Thus, the additional grounds of appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... on invalid foundation "reopening" action u/s 147/148 because there is admitted lack of confrontation of back material referred in impugned reasons recorded which is fatal to reopening u/s 148 of the 1961 Act 1.6 That impugned revision order u/s 263 is nullity and void ab initio because underlying assessment is made totally contrary to provisions of 1961 Act and applicable binding CBDT instructions/guidelines 2. That impugned revision order passed u/s 263 of the Act is invalid as no revision u/s 263 can take place qua assessment order passed in faceless mode u/s 144B of the Act as per very scheme of the 1961 Act." 2. During the course of hearing, the Ld. AR of the assessee submitted the additional legal grounds are purely legal in nature and requires no further verification, therefore, the same deserves to be admitted. He placed reliance on the judgments of Hon'ble Supreme Court in the case of NTPC Ltd. reported in 229 ITR 383 (SC). Besides this, the AR also placed reliance on various judgements which are available in the petition filed under Rule 11 of the ITAT Rules. After considering the submissions of the assessee and the judgments relied upon and also looking to the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conjecture and surmises. The reasons recorded for reopening of the assessments shows that the same are vague and has not specified the specific details of the transactions carried out by the assessee which were claimed as bogus long term capital gain. The Ld. AR further drew our attention to the reasons where the AO observed that assesse has obtained bogus accommodation entries in the forms of penny stock by M/s Indian Infotech and Software Limited during the financial year 2012-13 for Rs. 32,79,066/- which is not correct. The Ld.AR submit that the assessee has earned long term capital from sale of two companies namely M/s Indian Infotech and Software Limited Rs. 18,91,815/- and Oasis Cine Communication Ltd. Rs. 13, 87,251/. He further submit that all these facts were available before the AO in the return of income filed by assesse, and has not recorded the proper findings in the reasons so recorded. He thus, prayed that when the reasons are not clear and unambiguous and had not clarified as to how the AO has recorded the satisfaction for reopening the assessment, the same is bad in law. Once the reopening is based on wrong appreciation of facts, the consequent order passed u/s 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 406 (Mumbai) held that during the course of appellate proceedings against the order passed u/s. 263 of the Act, the validity of the assessment order from which such proceedings have been originated could be examined. The relevant observations as made in the above decision of the Tribunal are as under:- 8. Challenging the jurisdictional defects of assessment order for assailing the jurisdictional validity of the revision order passed under s. 263 : The first issue that arises for our consideration is - whether the assessee can challenge the jurisdictional validity of order passed under s. 143(3) in the appellate proceedings taken up for challenging the order passed under s. 263 ? If we analyse the nature of both of these proceedings, which are under consideration before us, we find that the original assessment proceedings can be classified in a way as 'primary proceedings'. These are, in effect, basic/foundational proceedings and akin to a platform upon which any subsequent proceedings connected therewith can rest upon. The proceedings initiated under s. 263 seeking to revise the original assessment order is off shoot of the primary proceedings and therefore, these may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a remedy to contest the same, it may give rise to an 'enforceable' tax liability without authority of law. Therefore, the Courts have taken this view that jurisdictional aspects of the order passed in the primary proceedings can be examined in the collateral proceedings also. This issue is not res integra. This issue has been decided in many judgments by various courts, and some of them have been discussed by us in followings paragraphs. 8.2. In a matter that came up before Hon'ble Supreme Court in the case of Kiran Singh & Ors. vs. Chaman Paswan & Ors. [1955] 1 5CR 117 the facts were that the appellant in that case had undervalued the suit at Rs. 2,950 and laid it in the Court of the Subordinate Judge, Monghyr for recovery of possession of the suit lands and mesne profits. The suit was dismissed and on appeal it was confirmed. In the second appeal in the High Court the Registry raised the objection as to valuation under s. 11. The value of the appeal was fixed at Rs. 9,980. A contention then was raised by the plaintiff in the High Court that on account of the valuation fixed by the High Court the appeal against the decree of the Court of the Subordinate Judge did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further, similar view was emphasized by Hon'ble Bombay High Court (GOA Bench) in the case of Mavany Brothers vs. CIT (Tax Appeal No. 8 of 2007) [reported at (2015) 120 DTR (Bom) 286-Ed.] in its order dt. 17th April, 2015 wherein it was held that an issue of jurisdiction can be raised at any time even in appeal or execution. 8.5. The aforesaid principles, enunciated by the Apex Court in the case of Kiran Singh & Ors. vs. Chaman Paswan & Ors, supra were reiterated by the apex Court in the cases of Superintendent of Taxes vs. Onkarmal Nathmal Trust (AIR 1975 SC 2065) and Dasa Muni Reddy vs. Appa Rao (AIR 1974 SC 2089). In the first of these decisions it was pointed out that revenue statutes protect the public on the one hand and confer power upon the State on the other, and the fetter on the jurisdiction is one meant to protect the public on the broader ground of public policy and, therefore, jurisdiction to assess or reassess a person can never be waived or created by consent. This decision shows that the basic principle recognized in Kiran Singh (supra) is applicable even to revenue statutes such as the IT Act. Dasa Muni Reddy (supra) is a judgment where the principle of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings where the issue was limited to the merits of the additions. In this view, the Tribunal accepted the Revenues plea. The assessee thereafter carried order of the Tribunal in reference before the Gujarat High Court. The High Court after considering various judgments of the Supreme Court on the point of jurisdiction to reopen the assessment and also after specifically discussing the judgment of the Supreme Court in Onkarmal Nathmal Trust (supra) and Dasa Muni Reddy (supra) held that the Tribunal was in error in holding that the question of jurisdiction became final when it passed the earlier remand order. It was held that neither the question of res judicata nor the rule of estoppel could be invoked where the jurisdiction of an authority was under challenge. According to Hon'ble Gujarat High Court, the rule of res judicata cannot be invoked where the question involved is the competence of the Court to assume jurisdiction, either pecuniary or territorial or over the subject-matter of the dispute. Hon'ble High Court further held that since neither consent nor waiver can confer jurisdiction upon the AO where it did not exist, no importance could be attached to the fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional issues of assessment proceedings in the appeal against the penalty order. After analysing the legal position, as clarified by Hon'ble Gujrat High Court in the case of P.V. Doshi, supra and Hon'ble Bombay High Court in the case of Jainaravan Babulal vs. CIT (1988) 69 CTR (Bom) 201 : (1988) 170 ITR 399 (Bom) the bench held as that if the block assessment itself is without jurisdiction then there is no question of levy of any penalty under s. 158BFA(2) and therefore it is open to the assessee to set up the question of validity of the assessment in the appeal against the levy of penalty. 8.9. We also derive support from another judgement of Hon'ble Bombay High Court in the case of Inventors Industrial Corporation Ltd vs. CIT (1991) 96 CTR (Bom) 206 : (1992) 194 ITR 548 (Bom) wherein it was held that assessee was entitled to challenge the jurisdiction of the AO to initiate re-assessment proceedings before the CIT(A) in the second round of proceedings, even though he had not raised it in earlier proceedings before the AO or in the earlier appeal. 8.10. Thus, on the basis of aforesaid discussion we can safely hold that as per law, the assessee should be permitted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst Void order. In this case, the ITAT held that when the said order is void and did not stand in eyes of law, it cannot be held to be erroneous and prejudicial to the interest of revenue by the Commissioner. Again in the case of Westlife Development Ltd. v. PCIT vide order dated 24.06.2016 (ITAT Mumbai), the ITAT held that when an Assessment order passed under section 147 of the Act was illegal the CIT cannot invoke the jurisdiction under section 263 of the Act against such void or non-est order. In the case of Inder Kumar Bachani (HUF) v. ITO (2006) 101 TTJ 450 (ITAT Lucknow), the ITAT held that as the order of the Assessing Officer passed under section 147 / 143(3) was itself void, the order of PCIT passed under section 263 for quashing this order was without jurisdiction. In view of the above observations, we are of the considered view that since the assessment order passed by ITO Ward 3(3)(2), Ahmedabad itself was null and void, the same could not be the subject matter of revision under section 263 of the Act. In the result, we are Shri Jignesh Lilachand Shah vs. Pr. CIT allowing the appeal of the assessee on the ground of jurisdiction itself. We are accordingly not separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Communication Ltd. Rs. 13,87,251/-. It is also a matter fact that in ITR-2 filed by the assessee, the relevant details of the capital gains from each script is to be filled in Such ITR-2 was available before the AO when he recorded the reasons before issue of notice u/s 148 of the Act. It appears that Assessing Officer has recorded the reasons in mechanical manner without any independent application of mind and without making any enquiry nor making any other of verification the information received by him with the information available on record. We further found that from the face of the reasons, it is clear that they are incomplete and vague, therefore, in our considered opinion, the notice issued u/s 148 in the case of the assessee is bad in law and consequently order passed u/s 147 r.w. s 144B is invalid. 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 revisionary 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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