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2022 (10) TMI 1215 - AT - Income TaxRevision u/s 263 - Validity of reopening of assessment u/s 147 - notice issued beyond period of four years - as per CIT transactions of receipt of share capital and share premium not enquired by AO - HELD THAT:- Concluded assessment of the assessee for AY 2011-12 that was earlier framed u/s 143(3), as observed by us hereinabove could not have been reopened by the AO vide Notice u/s 148 i.e, after expiry of four years from the end of the relevant assessment year. Admittedly, as the AO vide his order passed under Sec. 143(3) r.w.s 147, had accepted the assessee’s returned income, therefore, as stated by the ld. AR and, rightly so, there was no occasion much the less any justification for the assessee to have carried the order of reassessment any further in appeal. Thus when the impugned order of reassessment under Sec. 143(3) r.w.s 147, in itself had been passed on the basis of invalid assumption of jurisdiction by the AO, and thus, is invalid and bereft of any force of law, therefore, the same could not have been revised by the Pr. CIT under Sec.263 of the Act. Admittedly, we have accepted the aforesaid claim of the assessee that the AO as per the mandate of the “1st proviso” to Sec. 147 the Act had invalidly assumed jurisdiction and reopened the concluded assessment of the assessee beyond the prescribed time period available for doing so i.e upto 31.03.2016. Whether or not the validity of the order passed by the AO under Sec. 143(3) r.w.s 147,could for the very first time in the course of the present appellate proceedings before us be taken as a basis by the assessee for assailing the sustainability of the order passed by the Pr. CIT under Sec. 263? - There is substance in the claim of the ld. AR that as the proceedings before the Pr. CIT u/s 263 of the Act, dated 27.03.2021 are in the nature of collateral proceedings, therefore, the assessee could in the course of appellate proceedings which in turn originates from the order passed u/s 263 of the Act, dated 27.03,2021 challenge the validity of the impugned assessment order passed by the A.O u/s. 143(3) r.w.s.147, dated 30.12.2018. The aforesaid contention of the ld. A.R that the illegality/invalidity of an order passed in the primary proceedings can be challenged in the course of the collateral proceedings finds support from the order of a coordinate bench of the Tribunal i.e ITAT, Mumbai in the case of Westlife Development Ltd. [2016 (6) TMI 1208 - ITAT MUMBAI]. It was, inter alia, observed by the tribunal that an assessee can challenge the validity of an order passed u/s.263 of the Act on the ground that the impugned assessment order was non-est. Indulgence of the tribunal in the said case was sought by the assessee for adjudicating the following issues (as culled out from the order). Thus as the order of reassessment under Sec.143(3) r.w.s 147 in itself had been passed on the basis of invalid assumption of jurisdiction by the AO, therefore, as claimed by the assessee and, rightly so, the same could not have been revised by the Pr. CIT under Sec. 263 of the Act. Accordingly, we herein quash the order passed by the Pr. CIT under Sec. 263 for want of valid assumption of jurisdiction. Decided in favour of assessee.
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