TMI Blog2017 (6) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... Nos. 2796, 2797 & 2798/Del/2013 - - - Dated:- 17-1-2017 - SH. H.S. SIDHU, JUDICIAL MEMBER, AND SH. O.P. KANT, ACCOUNTANT MEMBER For The Appellant : Sh. Salil Aggrarwal, Adv. For The Respondent : Sh. S.K. Jain, Sr.DR ORDER PER O.P. KANT, A.M.: These three appeals of the assessee are directed against separate orders of Ld. Commissioner of Income-tax( Appeals)-XXVI, New Delhi for assessment year 2002-03, 2004-05, and 2005-06 respectively. In all the appeals common issue is involved and therefore all these appeals were heard together and disposed of by this consolidated order. ITA No. 2796/Del/2013 for AY: 2002-03 2. Briefly stated facts of the case are that the assessee, a 100% Export Oriented Unit (EOU), was engaged in the manufacturing and export of gold jewellery in the Noida Special Economic Zone. For the year under consideration, the assessee filed original return of income declaring nil total income after claiming deduction of ₹ 59,00,324/-, under Section 10A of the Income- tax Act, 1961 (for short the Act ) in respect of business profit. Subsequently, the reassessment proceedings were initiated and notice under section 148 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to give submissions on the issue for allowability of deduction of interest as per the provisions of section 57(iii) of the Act, however, due to non-compliance, by the assessee, the Assessing Officer assessed the income at same figure of ₹ 8,79,180/-, which was assessed in terms of order under section 147/143(3) dated 30/12/2009. 2.4 Aggrieved, the assessee filed appeal before the Ld. Commissioner of Income-tax (Appeals). Before him, also the assessee could not substantiate that interest income earned had nexus with the interest expenditure incurred and accordingly, he upheld the order of the Assessing Officer. 2.5 Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. 3. Before us the assessee raised following additional grounds and relying on the judgement of the Hon ble Supreme Court in the case of National Thermal Power Corporation Limited Vs. CIT, reported in 229 ITR 383 submitted that all the material facts are on record and the additional ground raised was purely legal in nature, it can be raised at any stage of proceeding including on a reference or in appeal before the Hon ble High Court: Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the view that the proceedings taken u/s. 147 can be disputed even in the second round of appeal since if the AO lacks the jurisdiction the said jurisdiction can be disputed at any time and even in the second round of appeal passed on remand. This view of ours is supported by the decision of Hon'ble Gujarat High Court in the case of P. V. Doshi Vs. CIT (1978) 113 ITR 22 (Guj.), which is directly on the issue that assessee can dispute the validity of reassessment proceedings even in the second round of appeal. Hon'ble Gujarat High Court in the case of P. V. Doshi (supra) held as under: Therefore, if this settled position was borne in mind, the Tribunal's view was clearly erroneous that the matter became final when the Tribunal passed the earlier remand order so that this point of jurisdiction got finally settled, which could not be agitated unless the assessee had come in the reference to this court at that stage. The Tribunal's view was also incorrect that in restoring the case to the file of the Income-tax Officer by the earlier order, the only point left open was in respect of addition of ₹ 19,421 on merits and that the legal or jurisdictional aspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved in Kiran Singh v. Chaman Paswan, AIR 1954 SC 340, as under: It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even 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. 6. Respectfully following the above decisions, we admit the additional grounds raised by the assessee. 7. Supporting the additional grounds, learned counsel of the assessee, submitted before us that the first re-assessment under section 147 of the Act was completed on 22/12/2006 and the four years from the end of the relevant assessment year expired on 31/03/2007, therefore, in terms of proviso to section 147 of the Act, no action for subsequent reassessment can be taken under section 147 of the Act after expiry of four years from the end of the relevant assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings taken under Section 147, the Assessing Officer may make an assessment or reassessment, or recomputation, as the case may be. The word assess refers to a situation where the assessment was not made in the normal manner while the word reassess refers to a situation where an assessment is already made, but it is sought to be reassessed on the basis of this provision. In cases where the Assessing Officer has not made an assessment of any item of income chargeable to tax while passing the assessment order in the relevant assessment year, it cannot be said that such income was subjected to an assessment. In the assessment proceedings, the Assessing Officer would ascertain on consideration of all relevant circumstances the amount of tax chargeable to a given taxpayer. The word assessment would mean the ascertainment of the amount of taxable income and of the tax payable thereon. In other words, where there is no ascertaining of the amount of taxable income and the tax payable thereon, it can never be said that such income was assessed. Merely because during the assessment proceedings the relevant material was on record or could have been with due diligence discerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al High Court, being a binding precedent, we are of the opinion that reassessment proceeding initiated second time in the case of the assessee are not valid, and liable to be quashed. 12. Moreover, in the instant assessment year, the first reassessment was completed under section 147 of the Act and four years had expired from the end of the relevant assessment year on 31/03/2007, therefore, the reassessment completed on 22/12/2006 could not have been reopened after 31/03/2007 except in the event of failure by the assessee in disclosing fully and truly all material facts. The Assessing Officer in the reasons recorded has not pointed out any such failure on the part of the assessee in disclosing material facts. In such circumstances invoking the provision of section 147 of the Act, second time reassessment could not have been made in the case of the assessee. 13. In view of above the reassessment proceedings are held not in accordance with law and are quashed. The additional grounds of the assessee are accordingly allowed. Since we have already quashed the reassessment proceeding in consideration, the adjudication of the grounds of the appeal is rendered infractuous. 14. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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