TMI Blog2000 (9) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout confronting the assessees with all the material against the assessees (i.e., on the ground of violation of the rules of natural justice) ?" To decide the above question, briefly, the facts are required to be stated: In Appeal No.127 of 2000, the assessee filed a return of income for the assessment year 1993-94. The total income included agricultural income of Rs. 64,90,951 which was taken for aggregation for rate purpose. The return of income declared total income of Rs. 3,63,400. During the assessment years 1991-92 and 1992-93 investigations were carried out. The farmers and the Tahsildar were examined to ascertain the genuineness of the nature of income. The finding for both the assessment years 1991-92 and 1992-93, as given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry was held by the Assessing Officer. That no opportunity was given to the assessees to rebut the evidence of material gathered by the Assessing Officer. Therefore, it was contended that the entire assessments be declared null and void and not merely set aside the order of the Assessing Officer. In order words, the assessees contended that the proceedings be annulled in their entirety for violation of the rules of natural justice. In support of their contention, they relied upon the orders of the Tribunal for the earlier years, viz., assessment years 1991-92 and 1992-93, where, for similar defects, the assessees' prayer for annulment of the assessments came to be accepted. The contention of the assessees was accepted by the Tribunal. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly results in cancellation of the order of the authority. It can never result in annulment of the entire assessment. He contended that the consequences of setting aside the assessment order are different from the consequences of annulling the assessments. He contended that under section 251, the Commissioner of Income-tax has the power to annul the assessments or set aside the assessment order and refer the case back to the Assessing Officer for making fresh assessment. He pointed out that these two powers are separate and distinct. On the other hand, it was contended by Mr. Dastur, learned senior counsel on behalf of the assessees, that, in the present matter, the Tribunal has followed its earlier judgments for the assessment years 1991-9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a well settled principle of law that there is a difference between lack of jurisdiction and irregular exercise of authority/jurisdiction. This fundamental difference has not been appreciated by the Tribunal. A proceeding is a nullity when the authority taking it has no power to have seisin over the case. The omission of the Assessing Officer, in the present case, to confront the assessees with the material in his possession does not affect the ab initio jurisdiction enjoyed by the Assessing Officer in respect of the above proceedings. The first appellate authority has come to the conclusion that there was no bias against the assessees. However, there was violation of the rules of natural justice and, therefore, the Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, can be no justification for holding that there was no jurisdiction or that the decision was a nullity. It is not necessary to multiply the authorities as the above principles are well settled. There is no merit in the contention advanced on behalf of the assessees that the consequence of annulment of assessment is the same as setting aside the assessment order. If that was so, we fail to understand the reason why the assessees preferred an appeal to the Tribunal against the order of the first appellate authority setting aside the assessment order. Annulment of assessment would only mean that the entire assessment proceedings would become ab initio void. It would have certain consequences which are different from merely setting as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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