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TMI Blog2025 (3) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s 148A - AO has proceeded to pass the order u/s 148 r.w.s 144B of the Act on the notice so issued u/s 148 on 31/03/2021 served upon the assessee on 01/04/2021. Thus, in view of the order of Suman Jeet Agarwal [2022 (9) TMI 1384 - DELHI HIGH COURT] we hold the order so passed without following the procedure prescribed u/s 148 of the Act is bad in law and is invalid.
Accordingly, we quash the revisionary order passed u/s 263 of the Act as the re-assessment order passed u/s 147 r.w.s 144B of the Act is already held as invalid. Thus, grounds of appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, the Ld. CIT-DR vehemently supported the orders of the lower authorities and requested for confirmation of the same. 5. We have heard the rival submissions and perused the materials available on record. At the outset, the issue raised by the AR in additional ground of appeal is with regard to the validity of the initiation of reassessment proceedings and legality of consequent order passed u/s 147 r.w.s 144B of the Act dated 28/03/2022 from which the present revision proceedings u/s 263 of the Act originated. 6. It is true that before us, assessee has challenged the order passed by the ld. Pr. CIT u/s. 263 of the Act, however, since the assessee has raised the issue of validity of reassessment order, we first answer the question as to whether or not such legality of the re-assessment framed could be examined in appellate proceedings challenging the order passed u/s. 263 of the Act. The coordinate bench of Mumbai Tribunal in the case of Westlife Development Ltd. reported in (2016) 49ITR (T) 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings would be valid under the law as contained in IT Act ? It has been vehemently argued before us that the subsequent proceedings (i.e. collateral proceedings) derive strength only from the order passed in the original proceedings (i.e. primary proceedings). Thus, if order passed in the original proceedings is itself illegal, then that cannot give rise to valid revision proceedings. Therefore, as per law, the validity of the order passed in the primary (original) proceedings should be allowed to be examined even at the subsequent stages, only for the limited purpose of examining whether the collateral (subsequent) proceedings have been initiated on a valid legal platform or not and for examining the validity of assumption of jurisdiction to initiate the collateral proceedings. If it is not so allowed, then, it may so happen that though order passed in the original proceedings was illegal and thus order passed in the subsequent proceedings in turn would also be illegal, but in absence of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the impugned decree of the Civil Court can be assailed by the appellant in execution. It is already held that it is the Controller under the Act that has exclusive jurisdiction to order ejectment of a tenant from a building in the urban area leased out by the landlord. Thereby the Civil Court inherently lacks jurisdiction to entertain the suit and pass a decree of ejectment. Therefore, though the decree was passed and the jurisdiction of the Court was gone into in issue Nos. 4 and 5 at the ex-parte trial, the decree there-under is a nullity, and does not bind the appellant. Therefore, it does not operate as a res judicata. The Courts below have committed grave error of law in holding that the decree in the suit operated as res judicata and the appellant cannot raise the same point once again at the execution." 8.4. Similar view has been taken by Hon'ble Supreme Court by following aforesaid judgments recently in the case of Indian Bank vs. Manual Govindji Khona reported in 2015 (3) SCC 712. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the question of jurisdiction to reopen the assessment having been expressly given up by the assessee in the appeal against the reassessment order in the first round, the assessee was debarred from raising that point again before the AAC and the AAC was equally wrong in permitting the assessee to raise that point which had become final in the first round and in adjudicating upon the same. The plea of the Revenue impressed the Tribunal which took the view that after its earlier order in the first round of proceedings the matter attained finality with regard to the point of jurisdiction which was given up before the AAC and not agitated further and that in the remand proceedings what was open before the AO was only the question whether the addition was justified on merits and the point regarding the jurisdictional aspect was not open before the AO. According to the Tribunal, the assessee having raised the point in the first round and having given it up could not revive it in the second round of proceedings 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 referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the supreme court, it was held that if an assessee seeks to challenge the reassessment proceedings as being without jurisdiction, when action for rectification is sought to be taken on the assumption of the validity of the reassessment order, then the assessee has to step in and protect its interests and the liberty to quest ion even the validity of the reassessment proceedings ought to be given to it......." (emphasis, italicised in print, supplied). 8.8. Similar view was taken in another decision of the Tribunal in the case of Dhiraj Suri vs. Addl. CIT (2006) 99 TTJ (Del) 525: (2006) 98 ITD 87 (Del). In the said case, appeal was filed by the assessee before the Tribunal against the levy of penalty. In the appeal challenging the penalty order, the assessee challenged the validity of block assessment order which had determined the tax liability of the assessee on the basis of which penalty was levied subsequently. The revenue objected with respect to the ground of the assessee raising jurisdictional 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framed by the learned AO is unsustainable in the eyes of law, the said invalid and illegal order cannot be subject matter of s. 263 proceedings. On this count also, the revision order passed by the learned Principal CIT under s. 263 of the Act deserves to be quashed. The coordinate bench of Ahmedabad Tribunal in the case of Shri Jignesh Lilachand Shah (supra), had an occasion to deal with this issue where the Tribunal in para 6 has observed as under:- "6. The next issue for consideration before us is that once it is held that the assessment order itself is null and void, can such assessment order be the subject matter of revision under section 263 of the Act. In our view, it is a well-settled principle of law that once the assessment order passed itself is null and void, the same cannot be the subject matter revision under section 263 of the Act. In the case of Pioneer Distilleries Limited Vs Pr. CIT ITA No. 479/PUN/2017(ITAT Pune) the ITAT held that revisionary jurisdiction cannot be exercised against 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 rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven: "31.2 Category C: The petitions challenging notices falling under category "C" which are digitally signed on 31st of March, 2021, are disposed of with the directions to the JAO's to verify and determine the date and time of dispatch as recorded in the ITBA portal in accordance with the law laid down in this judgment as the date of issuance. If the date and time of dispatch recorded is on or after 1st of April, 2021, the notices are to be considered as show cause notice, under section 148-A(b) as per the directions of the Apex Court in the case of Ashish Agarwal (supra) judgment" As observed above, the notice in the present case was dispatched/served upon the assessee on 01/04/2021, thus the same should be treated as notice u/s 148A(b) and AO should complete the consequent proceedings as provided u/s 148A of the Act. However, the AO has proceeded to pass the order u/s 148 r.w.s 144B of the Act on the notice so issued u/s 148 on 31/03/2021 served upon the assessee on 01/04/2021. Thus, in view of the order of Hon'ble jurisdictional High Court in the case of Suman Jeet Agarwal (supra), we hold the order so passed without following the procedure prescribed u/s 148 of the Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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