TMI Blog2022 (10) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... ft 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the PCIT seeking to revise the reassessment order dated 30.12.2018 passed under section 147/143(3) of the Act, is without jurisdiction, illegal and bad in law. 4. That on the facts and circumstances of the case and in law, the impugned order passed under section 263 of the Act, without appreciating that the twin conditions of that section viz., reassessment order being erroneous as well as prejudicial to the interests of the Revenue, were not satisfied, and hence is illegal and bad in law. 5. That on the facts and circumstances of the case, the impugned order passed by the PCIT without affording reasonable opportunity of being heard to the Appellant in violation of principles of natural justice, is illegal and bad in law. 6. That on the facts and circumstances of the case and in law, the PCIT erred in holding that reassessment order dated 30.12.2018 passed under section 147/143(3), was erroneous and prejudicial to the interests of the Revenue on the issue of examination of share capital. 7. That the PCIT erred in setting aside the reassessment order on aforesaid issue on vague/ general ground for examination without pointing out the error, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the Hon ble Supreme Court on March 08, 2021 vide its suo-motto order had initially excluded the period from March 15, 2020 till March 14, 2021 for calculating the period of limitation. It was submitted by him that the Hon ble Supreme Court had thereafter vide its order dated April,27, 2021 restored its earlier order dated March 08, 2021, and it was provided that the period of limitation w.e.f. March 15, 2020 would stand extended till further order. The Ld. AR submitted that in view of the second Covid-19 wave in India, the Hon ble Apex Court had pursuant to its aforesaid orders directed that the period of limitation as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further order. The Ld. AR submitted that considering the extended period of limitation no delay was involved in filing of the present appeal by the assessee company. Alternatively, it was submitted by the Ld. AR that in case delay, if any, was involved in filing of the present appeal, then the same be condoned as the assessee for sufficient reasons was prevented from filing its appeal which though wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration received share capital and share premium, as under: Date of issue Name of the Allottees Nature of Transactions Share capital issued in the form of Equity/ CCS/Preferences shares (No.) Face value (Rs.) Security premium per share(Rs.) Amount (Rs.) 20/11/2011 SFI Parcel Services Pvt. Ltd. Allotment of equity shares Equity-2095628 10/- 790/- 1,67,70,68,220/- 20/11/2011 Gupta Coalfield Washeries Ltd. Allotment of equity shares Equity-99404 10/- 790/- 7,95,50,039/- Total 1,75,66,18,259/- The Pr. CIT observed that the assessee company by issuing equity shares of a face value of Rs.10/- per share at a premium of Rs.790/- each had during the year raised a fund of Rs.176 crore. The Pr. CIT was of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m had inter-alia drawn support from the fact that the A.O in the course of the original assessment proceedings had vide his query letter dated 21.08.2013 - Question No.18 21 specifically called for the details of the shareholders, and also their identity and creditworthiness. It was submitted by the assessee that in reply to the aforesaid query it had vide its letter dated 16.01.2014 submitted with the AO the confirmations, copies of the bank statements and returns of income of the shareholders to whom shares were allotted during the year under consideration. It was the claim of the assessee that as the A.O after vetting the details that were filed with him in support of the identity and creditworthiness of the share applicants, as well as the genuineness of the transactions, had accepted the same, thus, the possible and a plausible view so arrived at by him could not be dislodged u/s 263 of the Act. The assessee referring to the reasons to believe on the basis of which its case was reopened vide notice issued u/s.148 of the Act, dated 28.03.2018, submitted before the Pr. CIT that its concluded assessment was in itself reopened for the purpose of verifying the authenticity of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue of raising of share capital and share premium had been examined by the A.O not once, but twice, i.e., both in the course of original assessment as well as the reassessment proceedings, wherein on both the occasions he had after detailed enquiries and deliberations finding it in order accepted the same, therefore, the view that was arrived at by him after thoroughly vetting the assessee s claim could not be substituted as against that of the revisional authority in the garb of proceedings under Sec. 263 of the Act. It was the claim of the assessee before the Pr. CIT that now when proper enquires had been conducted by the A.O both at the time of framing of the original assessment u/s.143(3), dated 06.03.2014, and also in the course of the reassessment proceedings that had culminated vide an order passed u/ss.143(3)/147, dated 30.12.2018, therefore, it was incorrect on his part to allege that the same was passed without making proper enquiries. It was the claim of the assessee that as it had justified both the transactions of receipt of share capital and share premium by furnishing the requisite details/documents as were called for by the A.O in the course of the reassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... summarily accepted its returned income, which, thus, conclusively proved that the reassessment order passed by him u/s.143(3) r.w.s.147, dated 30.12.2018 was without any application of mind. Also, it was observed by the Pr. CIT that though the verification of the complete details as regards the sources of the investment in the assessee company a/w. the source of the company from whom funds were routed formed the very reason for reopening of the assessee s case u/s.147 of the Act, but the A.O dispensing with proper investigation and enquiries on the said issue had without any application of mind framed the assessment vide his order passed u/s.143(3) r.w.s 147, dated 30.12.2018. It was further observed by the Pr. CIT that though the assessee company during the year under consideration had made a cash deposit of Rs. 60 lac in its bank account no. 164010200012546 with Axis bank, Branch: Bilaspur, which, inter alia, was a reason for reopening of its case, however, the AO despite himself not being convinced about the source of the said cash deposit which was not commensurate with the assessee s returned income had summarily accepted the same without carrying out any further verification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 790/- 1,67,70,68,220/- 20/11/2011 Gupta Coalfield Washeries Ltd. Allotment of equity shares Equity-99404 10/- 790/- 7,95,50,039/- It was submitted by the Ld. AR that the complete details of the shareholders, PAN details, addresses, copies of their returns of income, balance sheets, bank statements etc. were duly called for by the A.O both during the course of the original assessment proceedings wherein the assessment was framed vide order u/s. 143(3), dated 06.03.2014, as well as in the course of the reassessment proceedings which had culminated into an order u/s.143(3) r.w.s. 147, dated 30.12.2018. The Ld. A.R in order to buttress his aforesaid contention had taken us through the replies that were filed with the A.O in the course of the aforesaid respective assessment/reassessment proceedings. The Ld. A.R also drew our attention towards the extracts of the replies that were brought to the notice of the Pr. CIT during the course of proceedings before him. It was submitted by him that now when the A.O had framed the impugned assessment af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reassessment proceedings and the same were accepted by the A.O after making necessary verifications to his satisfaction. Our attention was also drawn by the Ld. AR towards certain specific queries on the issue in question that were raised by the ACIT, Central Circle-1(1), vide his notice u/s.142(1), dated 26.09.2018, wherein he had vide his query No.7 specifically called upon the assessee to justify the transactions of receipt of share application money and share capital from the aforementioned parties, viz. M/s SFI Parcel Services Pvt. Ltd. and M/s Gupta Coalfield Washeries Ltd. 10. The Ld. A.R adverting to the investment of Rs.79,55,039/- that was made by the other share subscriber, viz.M/s Gupta Coalfield Washeries Ltd. towards share capital and share premium took us through the confirmation of the said party that was filed in the course of the original assessment proceedings. Our attention was also drawn towards the copy of the bank account of the aforementioned party at Page 63 to 68 of APB, wherein the complete details of the source from where the payments made by M/s Gupta Coalfield Washeries Ltd. to the assessee company were made from were reflected. The Ld. AR h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O u/s.143(3) r.w.s147, dated 30.12.2018 as erroneous in so far it was prejudicial to the interest of the revenue u/s. 263 of the Act. 13. The Ld. A.R further assailed the validity of the order passed by the Pr. CIT u/s 263 of the Act, dated 27.03.2021. It was averred by the ld. A.R that as the Pr. CIT had failed to carry out the minimal enquiry in case he was of the view that there was any failure of the A.O in not undertaking any such enquiry as regards the share capital and share premium that was received by the assessee company from the aforementioned investor companies, therefore, on the said count itself the order so passed by him under Sec. 263 of the Act, dated 27.03.2021 could not be sustained and was liable to be struck down. The Ld. A.R in support of his aforesaid contention had relied on the judgment of the Hon ble High Court of Delhi in the case of Pr. CIT-3, New Delhi Vs. Delhi Airport Metro Express Pvt. Ltd., ITA No.705/2017. It was submitted by the Ld. AR that in the said case as the Pr. CIT while exercising his revisional jurisdiction u/s.263(1) of the Act had without undertaking any enquiry by himself had sent back the entire matter to the file of the A.O fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts which were necessary for its assessment for the year under consideration i.e. A.Y.2011-12. It was submitted by the Ld. AR that it was not the case of the department that the income of the assessee chargeable to tax had escaped assessment for the reason that there was any failure on its part to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148. The Ld. A.R adverting to the second limb of the 1st proviso to Sec. 147 submitted that the case of the assessee was reopened by the A.O not for the reason that there was any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the year under consideration, but in fact was reopened in order to rope in the income which had escaped assessment within the meaning of Explanation (2)(c) of Section 147 of the Act. The Ld. A.R in order to buttress his aforesaid contention that there was no failure of the assessee to fully and truly disclose all the material facts necessary for its assessment for the year under consideration i.e A.Y 2011-12 had drawn our attention to the copy of the reasons to believe on the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, therefore, the assessee could in the course of such proceedings challenge the validity of the impugned reassessment order that was passed by the A.O u/s. 143(3) r.w.s.147 of the Act, dated 30.12.2018. The ld. AR in order to support his contention that the illegality/invalidity of an order passed in the primary proceedings can be challenged in the collateral proceedings relied on the order of the ITAT, Mumbai in the case of Westlife Development Ltd. Vs. Pr. CIT-5, Mumbai (2017) 88 taxmann.com 439 (Mumbai). It was submitted by the Ld. AR that the tribunal in its aforesaid order had, inter alia, observed that the 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. The Ld. A.R submitted that in the aforesaid case though the department had assailed the order of the tribunal before the Hon ble High Court but had accepted its view on the issue in hand by not carrying the same any further in appeal. It was submitted by the ld. AR that as the aforesaid order of the tribunal in Westlife Development Ltd. (supra) had thereafter been upheld by the Hon ble High Court of Bombay vide its order passed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Commissioner of Income (2004) 269 ITR 192 (P H). Referring to the judgment in the case of Duli Chand Singhania (supra) it was submitted by the Ld. AR that the Hon ble High Court had held that in a case where an assessment had earlier been made under Section 143(3) of the Act and, action thereafter is sought to be taken for reopening of the case u/s. 147 of the Act after the expiry of four years from the end of the relevant assessment year, then, it would be mandatorily required that both the conditions are satisfied, viz. (i) the AO must have reason to believe that income chargeable to tax has escaped assessment; and (ii). he must also have a reason to believe that such escapement had occurred by reason of failure of the assessee for either of the two conditions, viz. (a). to make a return of income under Section 139 or in response to notice issued under Sub-section (1) of Section 142 or Section 148; or (b). to disclose fully and truly all material facts necessary for his assessment for that purpose. It was submitted by the Ld. AR that as there was absence of satisfaction of either of the aforesaid two conditions in the case of the present assessee, for the reason that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T remaining well within his jurisdiction had revised the reassessment order u/s.263 of the Act. It was submitted by the Ld. DR that the A.O while framing the reassessment had not verified the source of Rs.167.70 crore (supra) that was infused by one of the investor, viz. M/s. SFI Parcel Services Pvt. Ltd. in the assessee company and had merely gone by its bank account which revealed a debit of Rs.293.82 crore a/w certain scrollings of the assessee on the same. The Ld. D.R took us through Page No.58 to 60 of the assessee s paper book. The ld. D.R further submitted that as the assessee had not assailed the order passed by the A.O u/s.143(3) r.w.s. 147, dated 30.12.2018 any further in appeal, therefore, the same had attained finality. It was averred by the ld. D.R that the assessee could not be permitted to challenge the validity of the order passed by the A.O u/s.143(3) r.w.s 147, dated 30.12.2018 in the course of the present proceedings which arises from the order passed by the Pr. CIT u/s 263 of the Act, dated 27.03.2021. 19. Rebutting the aforesaid contentions of the department the ld. A.R took us through the copy of the bank account of the aforesaid investor, viz M/s. SFI Parc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Pvt. Ltd. MCCPL has received share capital and share premium amounting to Rs.167,70,68,220/- from SFI Parcel during F.Y.2010-11. SFI Parcel has paid above share capital and share premium out of share application money received from ACB (India) Power Ltd. (ACBIPL) for Rs.294 crore. SFI Parcel has allotted preference share capital to ACBIPL during the F.Y.2010-11. ACBIPL has paid above preference share capital to SFI parcel out of share application money received from ACB (India) Ltd. for Rs.294 Cr. ACBIPL has allotted share capital of Rs.30,46,91,600/- and Rs.174,74,27,620/- to ACB (India) Ltd. during the F.Y.2010-11. 3. Source of fund in ACB (India) Ltd. :- It is stated during survey that a Mauritious based company namely Warburg Pinckers has made investment in ACB (India) Ltd. through its subsidiary company namely Pinerich Investment Ltd. Total number of shares purchased by the said company is 52162514 which is 21.92% holding of shares of ACB (India) Ltd. This investment was made before the year 2009. Since, ACB (India) Ltd. has financial interest in the aforesaid company [Mauritious Based company namely Warburg Pinckers) which is located outside I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buy back from the same company. Except investment made in ACB (India) Ltd. there does not appear any other investment or business activity in the said company of Mauritious. Thus, the flow of fund can be structured in the following manner Warburg Pinckers( Mauritious based company) ACB (India) Ltd. ACB ((India) Power Ltd. SFI Parcel Services Pvt. Ltd. Maruti Clean Coal Power Ltd. 5 Details of share application money/share capital/debentures issued by MCCPL for F.Y.2010-11 are given in the following chart: Date of issue Name of the Allottees Nature of Transactions Share capital issued in the form of Equity/ CCS/Preferences shares (No.) Face value (Rs.) Security premium per share(Rs.) Amount (Rs.) 20/11/2011 SFI Parcel Services Pvt. Ltd. Allotment of equity shares Equity-2095628 10/- 790/- 1,67,70,68,220/- 20/11/2011 Gupta Coalfield Washeries Ltd. Allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - per share at a high premium of Rs.790/- per share, and thus, had raised a fund of Rs.176 crore, therefore, the difference between the Fair Market Value (FMV) per share and the share premium received against each share was to be ascertained; and (ii). that as the cash deposit of Rs.60 lac in the assessee s bank account (in its old PAN) was not commensurate with its income returned for the year under consideration, therefore, the income to the said extent had escaped assessment. 21. We shall first deal with the claim of the ld. A.R that the impugned reassessment order under Sec. 143(3) r.w.s 147, dated 30.12.2018 was passed by the A.O on the basis of invalid assumption of jurisdiction. Undeniably the original assessment was framed in the case of the assessee vide order passed under Sec. 143(3), dated 06.03.2014, Page 69 to 73 of APB. Concluded assessment of the assessee was thereafter reopened vide notice issued under Sec. 148 of the Act, dated 28.03.2018. It is the claim of the ld. A.R that as the A.O had exceeded his jurisdiction and reopened the concluded assessment and passed the reassessment order under Sec. 143(3) r.w.s 147, dated 30.12.2018, therefore, such invalid orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of equity shares having face value of Rs.10/- per share at a high premium of Rs.790/- per share). : On a perusal of the records it transpires that not only the assessee company had disclosed fully and truly all the material facts regarding the share capital and share premium of Rs.176 crore that was raised by it by issuing equity shares of a face value of Rs.10/- per share at a premium of Rs.790/- each during the year under consideration, but as observed by us at length hereinabove, it had also in the course of both the original assessment proceedings as well as in reassessment proceedings divulged the complete details as regards the authenticity of the said transactions to the satisfaction of the A.O. We may herein observe that the Hon ble Supreme Court in the case of New Delhi Television Ltd. vs. Deputy Commissioner of Income Tax, (2020) 116 Taxmann.com 151 (SC) had, inter alia, held, that though the assessee is obligated to disclose the primary facts but it is neither required to disclose the secondary facts nor required to give any assistance to the A.O by disclosure of the other facts and it is for the A.O to decide what inferences are to be drawn from the facts before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid bank account of the assessee (against its old PAN in the name of M/s. Maruti Explochem Pvt. Ltd. which thereafter had been changed into the assesee company), but had not made any addition on the said issue. Also, the claim of the assessee that the said issue was clarified vide its letter dated 24.12.2013 that was filed in the course of original assessment proceeding had neither been rebutted by the lower authorities nor in the course of the proceedings before us by the Ld. DR. In fact, as observed by us hereinabove, it has been the claim of the assessee that it had made a cash deposit of Rs.3.40 lacs only in its aforesaid bank account during the year under consideration, and the said fact stands established from a perusal of the said bank account i.e A/c No.164010200012546 with Axis Bank, Branch: Bilaspur to which our attention was drawn by the Ld. AR, which reveals as under (relevant extract): Date Particulars Amount 15.06.2010 By Cash Rs. 50,000/- 04.10.2010 By Cash Rs. 1,40,000/- 23.11.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment for such assessment year by reason of the failure on the part of the assessee: (i) to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148; or (ii) to disclose fully and truly all material facts necessary for his assessment for that assessment year. Condition (a) is admittedly satisfied inasmuch as the original assessment was completed under section 143(3) of the said Act. Condition (b) deals with a special kind of escapement of income chargeable to tax. The escapement must arise out of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148. This is clearly not the case here because the petitioner did file the return. Since there was no failure to make the return, the escapement of income cannot be attributed to such failure. This leaves us with the escapement of income chargeable to tax which arises out of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. If it is also found that the petitioner had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat as in the reasons to believe there was not even a whisper of any allegation that the escapement of income had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, therefore, in absence of such finding which was the sine qua non for assuming jurisdiction u/s.147 of the Act the action taken by the A.O for reopening the concluded assessment of the assessee u/s.147 would be wholly without jurisdiction. Apart from that a similar view had been taken by the Hon ble High Court of Punjab Haryana in the case of Duli Chand Singhania (supra). It was observed by the Hon ble High Court that as in the reasons recorded for issuance of notice u/s.148 of the Act only satisfaction of the A.O about escapement of income of the assessee could be gathered, and there was no whisper of any allegation that such escapement had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, therefore, the absence of the said finding which was the sine qua non for assuming jurisdiction u/s.147 of the Act in a case falling under the 1st proviso , thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, 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. On the basis of the validity of the reassessment framed by the A.O under Sec. 143(3) r.w.s 147, dated 30.12.2018 the ld. A.R has assailed before us the validity of the order passed by the Pr. CIT under Sec. 263 of the Act, dated 27.03.2021. In sum and substance, it is the claim of the ld. AR that now when the impugned order of reassessment under Sec. 143(3) r.w.s 147, dated 14.03.2018 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. Now, this takes us to the second aspect, i.e, as to whether or not the validity of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial pronouncements answered the said issue in the affirmative. For the sake of clarity the relevant observations of the tribunal in context of the aforesaid issue are culled out as under: 8. Challenging the jurisdictional defects of assessment order for assailing the jurisdictional validity of the revision order passed u/s 263: The first issue that arises for our consideration is whether the assessee can challenge the jurisdictional validity of order passed u/s 143(3) in the appellate proceedings taken up for challenging the order passed u/s 263? If we analyse the nature of both of these proceedings, which are under consideration before us, we find that the original assessment proceedings can be classified in a way as primary proceedings . These are, in effect, basic foundational proceedings and akin to a platform upon which any subsequent proceedings connected therewith can restupon. The proceedings initiated u/s 263 seeking to revise the original assessment order is off shoot of the primary proceedings and therefore, these may be termed as collateral proceedings in the legal framework. The issue that arises here is whether any illegality/invalidity in the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that jurisdictional aspects of the order passed in the primary proceedings can be examined in the collateral proceedings also. This issue is not res integra. This issue has been decided in many judgments by various courts, and some of them have been discussed by us in followings paragraphs. 8.2. In a matter that came up before Hon ble Supreme Court in the case of Kiran Singh Ors. v. Chaman Paswan Ors., [1955] 1 SCR 117 the facts were that the appellant in that case had undervalued the suit at Rs.2,950 and laid it in the court of the Subordinate Judge, Monghyr for recovery of possession of the suit lands and mesne profits. The suit was dismissed and on appeal it was confirmed. In the second appeal in the High Court the Registry raised the objection as to valuation under Section 11. The value of the appeal was fixed at Rs.9,980. A contention then was raised by the plaintiff in the High Court that on account of the valuation fixed by the High Court the appeal against the decree of the court of the Subordinate Judge did not lie to the District Court, but to the High Court and on that account the decree of the District Court was a nullity. Alternatively, it was contended that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dt 17th April, 2015 wherein it was held that an issue of jurisdiction can be raised at any time even in appeal or execution. 8.5. The aforesaid principles, enunciated by the Apex Court in the case of Kiran Singh Ors. v. Chaman Paswan Ors, supra were reiterated by the Apex Court in the cases of Superintendent of Taxes vs Onkarmal Nathmal Trust (AIR 1975 SC 2065) and Dasa Muni Reddy v. Appa Rao (AIR 1974 SC 2089). In the first of these decisions it was pointed out that revenue statutes protect the public on the one hand and confer power upon the State on the other, and the fetter on the jurisdiction is one meant to protect the public on the broader ground of public policy and, therefore, jurisdiction to assess or reassess a person can never be waived or created by consent. This decision shows that the basic principle recognized in Kiran Singh (supra) is applicable even to revenue statutes such as the Income Tax Act. Dasa Muni Reddy (supra) is a judgment where the principle of coram non judice was applied to rent control law. It was held that neither the rule of estoppel nor the principle of res judicata can confer the Court jurisdiction where none exists. Here also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee 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 OnkarmalNathmal 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 Hon ble 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. Hon ble High Court further held that since neither consent nor 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 jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jainarayan Babulal vs CIT, 170 ITR 399, the bench held as that if the block assessment itself is without jurisdiction then there is no question of levy of any penalty u/s. 158BFA(2) and therefore it is open to the assessee to set up the question of validity of the assessment in the appeal against the levy of penalty. 8.9. We also derive support from another judgement of Hon ble Bombay High Court in the case of Inventors Industrial Corporation Ltd vs CIT 194 ITR 548 (Bombay) wherein it was held that assessee was entitled to challenge the jurisdiction of the AO to initiate re-assessment proceedings before the CIT(A) in the second round of proceedings, even though he had not raised it in earlier proceedings before the Assessing Officer or in the earlier appeal. 8.10. Thus, on the basis of aforesaid discussion we can safely hold that as per law, the assessee should be permitted to challenge the validity of order passed u/s 263 on the ground that the impugned assessment order was non est and we hold accordingly. (B). Answering the second issue, i.e, if the order passed u/s 143(3) was illegal or nullity, then, whether the CIT had a valid jurisdiction to pass the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that by the action of the authorities the limitation cannot be extended, because the provisions of limitation are provided in the same. 20. In view of above discussion, ground no.3 is allowed and revision order passed u/s 263 is quashed. 10.2. It is further noticed by us that similar view has been taken by Chandigarh Bench of the Tribunal in the case of Steel Strips Ltd (supra). 11. Thus, after taking into account all the facts and circumstances of the case, we find that in this case, the original assessment order passed u/s 143(3) dt 24-10-2013 was null void in the eyes of law as the same was passed upon a non-existing entity and, therefore, the Ld. CIT could not have assumed jurisdiction under the law to make revision of a non est order and, therefore, the impugned order passed u/s 263 by the Ld.CIT is also nullity in the eyes of law and therefore the same is hereby quashed. It may at this stage be relevant and pertinent to point out that while for the aforesaid order of the tribunal had thereafter been approved by the Hon ble High Court of Bombay vide its order passed in ITA No.1168/2017 dated 28.09.2021, but as the aforesaid view of the tribunal on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would apply to the facts of the case. When assessment order itself is null and void based on non est revised return, the Ld. CIT could not have exercise jurisdiction under section 263 of the I T Act. We further find that the ITAT, Delhi in the case of Krishan Kumar Saraf Vs. Commissioner of Income Tax, Hissar, ITA No.4562/Del /2011, dated 24.09.2015 had also taken a similar view. It was observed by the tribunal that the CIT cannot revise an order which is non-est in the eyes of law. In the said case the assessee in the course of the appellate proceedings which had originated from the order passed by the CIT under Sec. 263 of the Act had assailed the validity of the order passed u/s 263, for the reason that the notice u/s 143(2) was issued beyond the stipulated time period. The department objected to the aforesaid challenge thrown by the assessee to the validity of the assessment order on the ground that as the assessee had not challenged the assessment order, therefore, the same had attained finality. However, the said contention of the revenue was turned down by the tribunal by relying on the order of the Hon ble High Court of Delhi in the case of CIT Central-1 Vs. Escorts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of above discussion, ground no. 3 is allowed and the revisional order passed u/s 263 is quashed. We, thus, on the basis of our aforesaid deliberations read along with the aforesaid settled position of law concur with the ld. AR that now when the impugned order of reassessment under Sec.143(3) r.w.s 147, dated 30.12.2018 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; or in fact non-est in the eyes of law, therefore, the same could not have been revised by the Pr. CIT under Sec. 263 of the Act. 29. On the basis of our aforesaid observations, we herein conclude that as the order of reassessment under Sec.143(3) r.w.s 147, dated 30.12.2018 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 of the Act, dated 27.03.2021 for want of valid assumption of jurisdiction. As we have quashed the impugned order passed by the Pr. CIT under Sec. 263 of t ..... 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