TMI Blog2015 (10) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... le rejecting the appellant's plea of the notice being without jurisdiction has not dealt with the appellant's above contention but merely upheld the order of the CIT(A). In view of the above the impugned order of the Tribunal holding that the notice dated 13/11/2000 was issued under Section 148 of the Act was within jurisdiction has to be set aside. However, the same is being restored to the Tribunal to consider afresh the contentions of the appellant as well as the Revenue with regard to the existence of the original return of income filed on 22/09/1997 in the record of the Assessing Officer at the time when the notice dated 13/11/2000 was issued. It is admitted position that there is no difference in the amount of income returned in the return of income filed on 17/11/2000 and the one filed originally on 22/09/1997. The appellant in fact need not have filed a return of income and as such could have relied only upon its earlier return of income. - TAX APPEAL NO. 8 OF 2007 - - - Dated:- 17-4-2015 - F.M. REIS AND M.S.SANKLECHA, JJ. For The Appellant : D.E. Robinson, Adv. For The Respondent : Ms.Asha Desai, Adv. JUDGMENT M.S. Sanklecha, J. - This appeal u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 17/11/2000 for the assessment year 1996-97. Thus, the appellant was called upon to furnish the same, otherwise at the peril of the return being declared invalid. (d) The appellant by letter dated 21/11/2000 supplied copies of the balance sheet and profit and loss account to the Assessing Officer, while reiterating that the original return of income did contain the documents now sought by the Revenue namely balance sheet and profit and loss account. It was also emphasized that there is no difference between the original return of income filed in 1997 and the present return of income filed on 17/11/2000. Thus, strictly speaking there was no reason for the appellant to file any fresh return of income. 4. The reasons recorded in support of the reopening notice dated 13/11/2000 as communicated to the appellant read as under : 'On referring to the correspondence with various parties and Partnership Deed dated 08.08.95 and the Confidential Report dtd. 05.10.99, received from the DDIT(Inv), Panaji, it is seen that a theatre property named Cine El-Dorado existing for a long time in Panaji city was owned by the Mavani Family, viz Late Shri Leelali Mawani and Late Sri Tazadin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing but the sale agreement and therefore capital gains on this transfer should have been declared, which has not been done. The transfer as defined in Section 2(47) has taken place when the contract dtd. 08.08.95 was performed i.e. when possession was given, which was done in August 1995 itself. Therefore the transfer of land and the theatre, building has taken place in AY 96-97. Therefore, I have reason to believe that income chargeable to tax has escaped assessment as per Section 147. Issue notice u/s.148.' 5. The appellant did not object to the reasons recorded for reopening the assessment. The appellant attended the hearing before the Assessing Officer and contended that there was no transfer of property under Section 2(47) of the Act and therefore no occasion for capital gains arose. Without prejudice it was also contended that the payment of ₹ 66.00 lakhs which was paid to some of its partners was paid in their individual capacity and the same cannot be considered as a consideration received by the appellant - firm. So also, if the 35% amount retained by one of the partners of the appellant - firm in the building to be constructed is excluded while computing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. So far as the other issues are concerned, the CIT(A) held that the agreement dated 8/08/1995 between M/s. Mavany Brothers and M/s. Sapna Real Estate along with handing over of the possession of the property did amount to part performance of the agreement and was therefore a transfer in terms of Section 2(47) of the Act. Besides the CIT(A) also held that the amount of ₹ 66.00 lakhs which was paid to some of the parties was not in their individual capacity but as partners of the appellant - firm. The same is evidenced by the fact that the books of account of the appellant - firm showed the receipt of ₹ 66.00 lakhs in its account. Accordingly, the appeal of the appellant was dismissed. 8. On further appeal, the Tribunal by the impugned order upheld the order of the CIT(A) both on issue of reopening of assessment as well as on the issue of capital gains. 9. Being aggrieved, the appellant is in appeal before this Court. 10. We called upon the learned Counsel of both sides to first address us on the basic issue raised by the appellant viz. the reopening notice being without jurisdiction. Depending upon the view taken by us on this issue will the other issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and the same could be from any other source. Thus, the requirement of having a return of income available at the time of issuing of the notice is not necessary. So far as the questions nos. 1 to 3 as admitted, it is submitted that the same would depend upon the view taken by the Court on the issue of jurisdiction. Therefore, at this stage no submissions were made with regard to questions nos. 1 to 3 with liberty to make the same in case the Court is of the view that the issue of impugned notice dated 13/11/2000 was a notice within jurisdiction of the Assessing Officer. 13. We have considered the rival contentions. The jurisdiction under Section 147/148 of the Act is an extra ordinary jurisdiction and can only be exercised when condition precedent as provided in Sections 147/148 of the Act are satisfied. It is the appellant's case that the aforesaid conditions are not satisfied inasmuch as in the absence of the Assessing Officer having the original return of income available it would not be possible for him to have a reasonable belief that income chargeable to tax has escaped assessment. This issue of jurisdiction according to the respondent - Revenue could only have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties. If the question now under consideration fell to be determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was coram non judice, and that its judgment and decree would be nullities.' (Kiran Singh case [AIR 1954 SC 340 : [1955] 1 SCR 117] , AIR p. 342, para 6) Thus, it is open to the petitioner to raise the issue of jurisdiction before the appellate authorities. 14. So far as the Revenue's contention is concerned that the reason to believe that income has escaped assessment need not necessarily flow from the return of income originally filed by an Assessee but this reason to believe could also arise on information received from any other source. This however, has not been the contention of the respondent - Revenue before the authorities under the Act. They have proceeded on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted position that there is no difference in the amount of income returned in the return of income filed on 17/11/2000 and the one filed originally on 22/09/1997. The appellant in fact need not have filed a return of income and as such could have relied only upon its earlier return of income. 15. In view of the above, we set aside the impugned order of the Tribunal on the issue of reopening notice dated 13/11/2000 and restore the issue to Tribunal for fresh consideration. The appellant and the Revenue are granted liberty to lead such other evidence before the Tribunal as may be necessary to establish the existence/non-existence of the return of income filed originally on 22/09/1997. The Tribunal is also directed to examine all other contentions raised by the respondent - Revenue or appellant - Assessee on the issue of reopening notice. The Tribunal would also examine the issue whether the reason to believe that income has escaped assessment need not necessarily flow from examining the return of income but could also come from any other source. In case there is some other source for the Assessing Officer to come to the conclusion that income has escaped assessment then the same mu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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