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TMI Blog2012 (8) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... nal. The petitioner has arrainged/ arrayed the Tribunal as the first respondent and NIIT Ltd. (hereinafter referred to as the "Assessee‟) as the second respondent. 2. The events leading to filing of the present writ petition are somewhat longish and we shall try to refer briefly to them. The assessee is a public limited company engaged in the business of information technology education and export of software services. We are concerned with the assessment year 1999-2000, the relevant previous year being the financial year ended on 31.03.1999 and in this year the assessee, besides the above income, derived income from export business, capital gains and income from other sources. A search was conducted under Section 132 (1) of the Income Tax Act, 1961 (hereinafter referred to as the "Act) in the office premises of the assessee and the residential premises of its Director on 10.11.2004. On 05.10.2005 the assessee filed its return for the assessment year under consideration, declaring an income of Rs. 10,11,66,660/-. An assessment order under Section 153A read with Section 143(3) of the Act was passed on 01.06.2006 determining the total income at Rs. 10,36,86,880/-, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner on various points canvassed before us or which it intends to raise at the time of fresh hearing. We also make it clear that we have not authoritatively pronounced on the contentions raised by the petitioner, either way, and the Commissioner shall deal with such contentions objectively without being influenced by any observations in this judgments. 24. WP (C) Nos.172/2009, 173/2009, 174/2009, 175/2009, 176/2009 & 177/2009 Insofar as these writ petitions are concerned, no order under Section 263 of the Act has been passed so far and only showcause notice is given. Needless to mention, in these cases as well, which relate to different assessment years, the commissioner shall be governed by the same parameters delineated above and these petitions stand disposed of in these terms. It is specifically clarified that as the petitions were pending in this Court, issue of limitation would not be raised by the petitioners. 25. All pending applications in these cases stand disposed of." 6. On 05.02.2010 fresh proceedings for the assessment years 1999-2000 to 2005-06 were initiated under Section 263 of the Act by the CIT. While these proceedings were pending, the assessee filed SLP ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and possessing necessary powers to grant stay as prayed for, the Tribunal passed orders on 21.05.2010 granting stay of the assessment proceedings pending before the Assessing Officer pursuant to the order passed by the CIT under Section 263. The reasoning of the Tribunal for granting stay is as follows: - "13. We have carefully considered the rival contentions in the light of the material placed before us. It is the case of the assessee that Ld. CIT was wrong in exercising powers u/s263, as the order is based on dictates of superior authorities. Not going into merits of such contention, it can be stated here that the assessee has made a prima facie case. Earlier assessment in the present case was framed u/s 143(3) read with Section 153A and it is the contention of the assessee that while framing such assessment, the monitoring was done by CIT and assessee is able to establish such fact. The last date of framing the assessment in pursuance to the order u/s 263 is stated to be 31.12.2011. The appeals filed by the assessee are fixed for hearing on 06.07.2010. The appeals against the order u/s 263 are considered to be priority appeals. The Ld. A. R. of the assessee has assured that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-00 to 05-06 and record pertaining to initiation and completion proceeding U/s 263 of the act for the said assessment years. Hearing adj. to 19/07/10 at the request of the Ld. D. R. Both parties are informed in the open court. (A/W ITA No.2058 to 2063/10). Sd/- Sd/- (A.K. Garodia) (C. L. Sethi) AM JM 10. The present writ petition has been filed against the two orders passed by the Tribunal as aforesaid, one staying the assessment proceedings before the Assessing Officer and the other, directing the Revenue to produce all the records pertaining to the assessments completed under Section 153A/ 143 (3) and the record pertaining to the initiation and completion of the proceedings under Section 263 for all the assessment years. On 16.07.2010 the order passed by the Tribunal on 06.07.2010 and all other proceedings pending before the Tribunal forming the subject matter of ITA Nos.2057 to 2063/Del/2010 were stayed by this Court as an interim measure. The interim order was continued from time to time and on 27.04.2011 it was made absolute. 12. This is how the matter is now before us and was finally heard on 03.07.2012. The contention of the petitioner is that it is not open to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s submission that the order was passed by the CIT on the dictates of the CBDT vanished. 13. On the other hand the learned counsel for the assessee strongly contended that the petitioner has misunderstood and mis-appreciated the scope and tenor of the order passed by this Court on 11.12.2009. According to him, the operative part of the order of this Court clearly showed that the assessee was granted the liberty of raising all points before the CIT which were canvassed before the Court and also the further points which the assessee intended to urge at the time of fresh hearing. This Court, according to the learned counsel clarified that it had not authoritatively pronounced on the contentions raised by the assessee (petitioner before the Court) either way and the CIT had to deal with such contentions objectively without being influenced by any observations in the judgment. It is the contention of the learned counsel for the petitioner that these observations read in proper perspective were a complete answer to the contentions of the learned Additional Solicitor General. 14. It was further contended by the learned counsel for the assessee that in any event the question of assumptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act with reference to the provisions of Section 147 dealing with re-assessment. The facts make interesting reading. There the assessment was sought to be reopened under Section 147 and notice under Section 148 was issued. On the completion of the reassessment, the assessee filed an appeal before the Appellate Assistant Commissioner ("AAC") challenging the jurisdiction to reopen the assessment as also the merits of the additions made in the reassessment order. However, before the AAC the contention against the validity of the assumption of jurisdiction was given up and the challenge was confined to the merits of the additions made. The AAC dismissed the appeal. The assessee carried the matter in further appeal before the Tribunal where the only controversy was with regard to the merits of the addition made in the reassessment order. The Tribunal restored the matter to the Assessing Officer with the directions to permit the assessee to cross-examine the witness, who had filed an affidavit implicating the assessee, and thereafter to complete the reassessment in accordance with law. When the matter came back to the assessing officer the assessee specifically raised the point of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee 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 the 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. The Court further held that since neither consent or waiver can confer jurisdiction upon the Assessing Officer where it did not exist, no importance could be attached to the fact that the assessee, in the first round of proceedings, expressly gave up the plea against the erroneous assumption of jurisdiction by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filled in the exercising such a discretion. It is the commissioner who has to satisfy himself, on the basis of available records, that in the given case the condition stipulated under section 263 of the act are satisfied. In arriving at this conclusion, he is not to be controlled even by a higher authority. Likewise, the higher authority is not to interfere with the independence of his unfettered discretion which is statutorily conferred upon the commissioner, if it is found that the order is passed at the dictates of the higher authority, such an order can be set aside. In the present case, various correspondence and documents which are referred to by the learned senior counsel appearing for the petitioner indicate that M. A.L. Mehta had been writing time and again that income had escaped assessment, therefore, the matter should be looked in to, such communications were addressed to the CBDT as well. The CBDT, in turn, forwarded those communications to the respondent No.4 and wanted the respondent No.4 to decide as to whether the allegations of Mr. Mehta are correct and whether income had escaped assessment or not in the relevant assessment years in which the AO had already passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions that would be made by the petitioner pleading that it is not a case of exercising powers under Section 263 of the Act. We also permit the petitioner to raise the plea that Mr. Mehta is not whistleblower, but is a disgruntled person being an ex-employee of the petitioner, who has been fabricating and filing raise and frivolous complaints against the petitioner." It was, therefore, contended that in the light of the aforesaid observations the challenge to the jurisdiction of the CIT on the ground that he did not exercise his independent mind must be taken to have been ruled upon and negatived by this Court and, therefore, the assessee could be permitted to urge the same again before the Tribunal and that the Tribunal committed an error in granting stay of the proceedings before the Assessing Officer and in directing the Revenue to produce the assessment records and the records pertaining to the initiation and completion of proceeding sunder Section 263. Reliance was also placed on the order of the Supreme Court dismissing the assessee‟s SLP (extracted earlier). 19. The contention of the learned ASG certainly deserves deep consideration. However, there is diffi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppreciate the true scope and tenor of the order. To understand the order as barring the assessee from questioning the order passed by the CIT on 01.04.2010 on the ground that he did not exercise his independent mind but merely proceeded on the lines as dictated by the CBDT would not be proper, for no Court can plausibly lay down the grounds on which an order, which is to be passed, can be challenged by the aggrieved party. At the time when this Court passed the order, the order of the CIT was not in existence. It was yet to be passed. Neither the petitioner, nor the respondent in the writ proceedings nor even this Court could have delved into the mind of the CIT and attempt to anticipate the grounds on which he would rest his order. That apart, there is ample authority for the proposition, as we have earlier referred to, that neither consent or waiver can confer jurisdiction upon the authority. Moreover, the rule of estoppel and the principle of res judicata have been held to be inapplicable where the question involved is the competence or the jurisdiction of an authority or Court over the subject matter. The observations of this Court can, therefore, only be understood in the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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