GEETA SHARMA,SUNAM vs. ITO, SUNAM

Order \nThis appeal by the assessee is directed against the order\nof the Commissioner of Income Tax (Appeals), NFAC, dated\n19.02.2025, for the assessment year 2015-16.\n2. The grounds of appeal

12. We have heard the rival contention of the parties and perused\nthe material available on the record.\n13. Before adjudicating the issue at hand, it is pertinent to\nreproduce the relevant statutory provisions of the Income Tax\nAct, 1961, and the Income Tax Rules, 1962, which govern the\nissuance and service of notice under Section 148. The provisions\nrelevant for our consideration are Sections 148, 149, and 282 of\nthe Act, along with Rule 127 of the Rules. These are reproduced\nbelow for ready reference:\nSection\n148\nIssue of Notice\nwhere\nIncome\nhas Escaped Assessment\n(1)\nBefore making the assessment, reassessment or recomputation\nunder section 147, the Assessing Officer shall serve on the\nassessee a notice requiring him to furnish, within such period\nas may be specified in the notice, a return of his income or the\nincome of any other person in respect of which he is assessable\nunder this Act, for the relevant assessment year, in the\nprescribed form and verified in the prescribed manner and\nsetting forth such other particulars as may be prescribed;\n(2)\nThe Assessing Officer shall, before issuing any notice under\nsub-section ( 1), conduct such inquiries, as he deems fit, to\nobtain prior approval of the specified authority.\nSection 149 – Time Limit for Notice\n(1)\nNo notice under section 148 shall be issued for the relevant\n assessment year – ( a) if three years have elapsed from the end\nof the relevant assessment year, unless the case falls under\nclause (b); (b) if three years, but not more than ten years, have\nelapsed from the end of the relevant assessment year, only if the\nAssessing Officer has in his possession books of account or other\ndocuments or evidence which reveal that the income chargeable\nto tax, represented in the form of asset, which has escaped\nassessment amounts to or is likely to amount to fifty lakh rupees\nor more.\nSection 282 – Service of Notice Generally\n(1)\nThe service of a notice or summon or requisition or order or any\nother communication under this Act may be made by delivering\nor transmitting a copy thereof to the person named therein –\n(a)\nby post or by such courier services as may be approved by the\nBoard; or\n(b)\n(c)\n(d)\nin such manner as provided under the Code of Civil Procedure,\n1908; or\nin the form of any electronic record as provided in Chapter IV\nof the Information Technology Act, 2000; or\nby any other means of transmission, including electronic mail\nor fax message, as the Board may notify.\n(2)\nThe Board may make rules providing for the addresses\n(including the address for electronic mail or electronic mail\nmessage) to which such communication may be delivered or\ntransmitted.\nRule 127\nService of Notice, Summons, Requisition,\nOrder, and Other Communication\n(1)\nFor the purposes of sub-section (2) of section 282, the address\nof the assessee for communication shall\nbe-\n(a)\nthe\naddress\navailable\nin\nthe\nPAN\ndatabase\nof\nthe assessee; or\n(b)\nthe address available in the return of income furnished by\nthe\nassessee\nfor\nthe relevant\nassessment\nyear; or\n(c)\nthe address available in the last income-tax return\nfurnished; or\n(d)\nthe address available in the records of the Assessing Officer;\nor\n(e)\nthe email address available in the electronic filing account\nregistered by the assessee.\n(2)\nshall\nbe\ndeemed\nto\nhave\nbeen delivered -\n(a)\n(b)\n14.\nThe\ncommunication\nif sent by post-at the time at which it would be delivered\nin\nthe\nordinary course\nof\npost;\nif delivered electronically – at the time of sending the electronic\nrecord.\nUpon a conjoint reading of Sections 148, 149, and 282 of\nthe Income Tax Act, 1961, along with Rule 127 of the Income Tax\nRules, 1962, it becomes abundantly clear that a communication shall\nbe deemed to be delivered or transmitted electronically at the moment\nit is sent to the email address provided in the income tax return\nfurnished by the assessee, or to any other email address available with\nthe Income Tax Department.\n15. The legislature, for the purpose of service of notice under\nSection 148, has employed the expressions \"delivered\" or\n“transmitted," and the term “served.” In the present case, although the\nnotice under Section 148 was generated on the CBDT portal on 31st\nMarch 2021, the actual service through electronic mode was effectuated\nonly on 1st April 2021. Thus the notice was issued beyond period, hence\nwas not in accordance with law.\n16. In our considered view, the issuance of notice beyond the\nstatutory time limit prescribed under Section 149 of the Act, is in\ndirect contravention of the ratio laid down by the Hon'ble Supreme\nCourt in Rajiv Bansal (supra), renders the notice invalid and void ab\ninitio. Accordingly, the notice issued under Section 148 is bad in law.\nConsequently, the assessment order passed by the Assessing Officer\npursuant to such a notice is nonest in the eyes of law and cannot be\ntreated as a valid and lawful order.\n17. Having held that the notice issued under Section 148 and\nthe consequent assessment order are bad in law, the next question that\narises is whether the learned Principal Commissioner of Income Tax\n(PCIT) could invoke jurisdiction under Section 263 of the Act to revise\nsuch a non-existent and invalid order.\n18. In our considered opinion, the learned PCIT lacks the\njurisdiction to revise an order which is non est. The exercise of powers\nunder Section 263 presupposes the existence of a valid and legally\nsustainable assessment order. Unless such an order exists, there can be\nno question of treating it as erroneous or prejudicial to the interest of\nrevenue. For any order to be revised under Section 263, it must first\nbe in existence and recognized in law as such.\n19. In the present case, since the assessment order has been held by\nus to be invalid and non-existent – having been issued and passed in\ncontravention of the law – we do not find any merit in the contention\nof the learned Departmental Representative (DR) that the learned PCIT\nwas justified in invoking revisional jurisdiction. Once the\nfoundation of the assessment itself is held to be void ab initio, the\nconsequential revisional proceedings under Section 263 cannot be\nsustained in law.\n20. Lastly in this regard, we may also refer to the decision of the\nCoordinate Bench referred by the Ld. AR in case of Parveen Kumar\nMittal Vs. The Pr. CIT in dt. 02/11/2021 wherein\nthe coordinate Bench has held as under:-\n14. In the case of M/s Westlife Development Ltd.(supra) the ITAT\nhas, after referring to various case laws held that the legality of\nthe proceedings can be agitated in a subsequent proceeding or\neven in a collateral proceeding or execution proceeding also. The\nrelevant findings of the ITAT are as under:\n

7. We have heard both the parties on this issue and also gone through\nthe orders passed by the lower authorities as well as the\njudgments relied upon before us. In our view, we need to decide\nfollowing issues, before we go into any other issues or merits of\nthe impugned order:\n1.\nWhether the assessee can challenge the validity of an assessment\norder during the appellate proceedings pertaining to\nexamination of validity of order passed u/s 263?\n2.\nWhether the impugned assessment order passed u/s 143(3) dated\n24-10-2013 was valid in the eyes of law or a nullity as has been\nclaimed by the assessee?\n3.\nIf the impugned assessment order passed u/s 143(3) was illegal\nor nullity in the eyes of law, then, whether the CIT had a valid\njurisdiction to pass the impugned order u/s 263 to revise the\nnon est assessment order?\nIn our considered view, since these issues are jurisdictional issues and\ngo to the root of the matter, therefore before dealing with any\nother issue, we shall first deal with all above three issues one\nby one, as under:\n8. Challenging the jurisdictional defects of assessment order for\nassailing the jurisdictional validity of the revision order passed\nu/s 263: The first issue that arises for our consideration is\nwhether the assessee can challenge the jurisdictional validity of\norder passed u/s 143(3) in the appellate proceedings taken up\nfor challenging the order passed u/s 263? If we analyse the\nnature of both of these proceedings, which are under\nconsideration before us, we find that the original assessment\nproceedings can be classified in a way as 'primary proceedings'.\nThese are, in effect, basic / foundational proceedings and akin\nto a platform upon which any subsequent proceedings connected\ntherewith can rest upon. The proceedings initiated u/s 263\nseeking to revise the original assessment order is off shoot of\nthe primary proceedings and therefore, these may be termed as\n'collateral proceedings' in the legal framework. The issue that\narises here is whether any illegality/invalidity in the order\npassed in the 'primary proceedings' can be set up in the\n'collateral proceedings' and if yes, then of what nature?\n8.

1. 1. We have analysed this issue carefully. There is no doubt that\nafter passing of the original assessment order, the primary (i.e.\noriginal proceedings) had come to an end and attained finality\nand, therefore, outcome of the same cannot be disturbed, and\ntherefore, the original assessment order framed to conclude the\nprimary proceedings had also attained finality and it also\ncannot be disturbed at the instance of the assessee, except as\npermitted under the law and by following the due process of law.\nUnder these circumstances, it can be said that effect of the\noriginal assessment order cannot be erased or modified\nsubsequently. In other words, whatever tax liability had been\ndetermined in the original assessment order that had already\nbecome final and that cannot be sought to be disturbed by the\nassessee. But, the issue that arises here is that if the original\nassessment order is illegal in terms of its jurisdiction or if the\nsame is null & void in the eyes of law on any jurisdictional\ngrounds, then, whether it can give rise to initiation of further\nproceedings and whether such subsequent proceedings would be\nvalid under the law as contained in Income Tax Act? It has been\nvehemently argued before us that the subsequent proceedings\n(i.e. collateral proceedings) derive strength only from the order\npassed in the original proceedings (i.e. primary proceedings).\nThus, if order passed in the original proceedings is itself illegal,\nthen that cannot give rise to valid revision proceedings.\nTherefore, as per law, the validity of the order passed in the\nprimary (original) proceedings should be allowed to be examined\neven at the subsequent stages, only for the limited purpose of\nexamining whether the collateral (subsequent) proceedings have\nbeen initiated on a valid legal platform or not and for examining\nthe validity of assumption of jurisdiction to initiate the\ncollateral proceedings. If it is not so allowed, then, it may so\nhappen that though order passed in the original proceedings was\nillegal and thus order passed in the subsequent proceedings in\nturn would also be illegal, but in absence of a remedy to contest\nthe same, it may give rise to an 'enforceable' tax liability\nwithout authority of law. Therefore, the Courts have taken this\nview that jurisdictional aspects of the order passed in the\nprimary proceedings can be examined in the collateral\nproceedings also. This issue is not res integra. This issue has\nbeen decided in many judgments by various courts, and some of\nthem have been discussed by us in followings paragraphs.\n8.

2. In a matter that came up before Hon'ble Supreme Court in the\ncase of Kiran Singh & Ors. v. Chaman Paswan & Ors., [1955]\n1 5CR 117 the facts were that the appellant in that case had\nundervalued the suit at Rs.2,950 and laid it in the court of the\nSubordinate Judge, Monghyr for recovery of possession of the\nsuit lands and mesne profits. The suit was dismissed and on\nappeal it was confirmed. In the second appeal in the High Court\nthe Registry raised the objection as to valuation under Section\n11. The value of the appeal was fixed at Rs.9,980. A contention\nthen was raised by the plaintiff in the High Court that on\naccount of the valuation fixed by the High Court the appeal\nagainst the decree of the court of the Subordinate Judge did not\nlie to the District Court, but to the High Court and on that\naccount the decree of the District Court was a nullity.\nAlternatively, it was contended that it caused prejudice to the\nappellant. In considering that contention at page 121, a four\nJudge Bench of Hon'ble Supreme Court speaking through\nVankatarama Ayyar, J. held that:\n\"it is a fundamental principle well-established that a decree\npassed by a Court without jurisdiction is a nullity, and that its\ninvalidity could be set up whenever and wherever it is sought\nto be enforced or relied upon, even at the stage of execution and\neven in collateral proceedings. A defect of jurisdiction, whether\nit is pecuniary or territorial, or whether it is in respect of the\nsubject-matter of the action, strikes at the very authority of the\nCourt to pass any decree and such a defect cannot be cured even\nby consent of parties.\"\n8.

3. This judgment was subsequently followed by Hon'ble Supreme\nCourt in the landmark case of Sushil Kumar Mehta vs Gobind\nRam Bohra, (1990) 1 SCC 193, wherein an issue arose whether\na decree can be challenged at the stage of execution and whether\na decree which remained uncontested operates as res-judicata\nqua the parties affected by it. Hon'ble apex court, taking\nsupport from aforesaid judgment, observed as under:\n\"In the light of this position in law the question for\ndetermination is whether the impugned decree of the Civil Court\ncan be assailed by the appellant in execution. It is already held\nthat it is the Controller under the Act that has exclusive\njurisdiction to order ejectment of a tenant from a building in\nthe urban area leased out by the landlord. Thereby the Civil\nCourt inherently lacks jurisdiction to entertain the suit and\npass a decree of ejectment. Therefore, though the decree was\npassed and the jurisdiction of the Court was gone into in issue\nNos.4 and 5 at the ex-parte trial, the decree there-under is a\nnullity, and does not bind the appellant. Therefore, it does not\noperate as a res judicata. The Courts below have committed\ngrave error of law in holding that the decree in the suit operated\nas res judicata and the appellant cannot raise the same point\nonce again at the execution.\"\n8.

4. Similar view has been taken by Hon'ble Supreme Court by\nfollowing aforesaid judgments recently in the case of Indian\nBank vs Manual Govindji Khona reported in 2015 (3) SCC 712.\nFurther, similar view was emphasized by Hon'ble Bombay High\nCourt (GOA Bench) in the case of Mavany Brothers vs CIT (Tax\nAppeal No 8 of 2007) in its order dt 17th April, 2015 wherein\nit was held that an issue of jurisdiction can be raised at any\ntime even in appeal or execution.\n8.

5. The aforesaid principles, enunciated by the Apex Court in the\ncase of Kiran Singh & Ors. v. Chaman Paswan & Ors, supra\nwere reiterated by the Apex Court in the cases of\nSuperintendent of Taxes vs Onkarmal Nathmal Trust (AIR 1975\nSC 2065) and Dasa Muni Reddy v. Appa Rao (AIR 1974 SC\n2089). In the first of these decisions it was pointed out that\nrevenue statutes protect the public on the one hand and confer\npower upon the State on the other, and the fetter on the\njurisdiction is one meant to protect the public on the broader\nground of public policy and, therefore, jurisdiction to assess or\nreassess a person can never be waived or created by consent.\nThis decision shows that the basic principle recognized in Kiran\nSingh (supra) is applicable even to revenue statutes such as the\nIncome Tax Act. Dasa Muni Reddy (supra) is a judgment where\nthe principle of 'coram non judice' was applied to rent control\nlaw. It was held that neither the rule of estoppel nor the\nprinciple of res ludicata can confer the Court jurisdiction where\nnone exists. Here also the principle that was put into operation\nwas that jurisdiction cannot be conferred by consent or\nagreement where it did not exist, nor can the lack of jurisdiction\nbe waived.\n8.

6. These judgments were subsequently noticed by Hon'ble Gujarat\nHigh Court in the case of P. V. Doshi 113 ITR 22(Gujrat). This\ncase arose under the Income Tax Act with reference to the\nprovisions of Section 147 dealing with re-assessment. The facts\nwere that the assessment was sought to be reopened under\nSection 147 and notice under section 148 was issued. Validity\nof reopening was not challenged upto Tribunal and additions\nwere challenged on merits only. The Tribunal restored the\nmatter to the Assessing Officer with some directions to\nreexamine the issue on merits. When the matter came back to\nthe assessing officer the assessee specifically raised the point of\njurisdiction to reopen the assessment, contending that the\nnotice of reopening was prompted by a mere change of opinion.\nThe AO rejected plea of the assessee but the AAC accepted this\nground and also held the reassessment to be bad in law on\njurisdictional ground. Against the order of the AAC the\nRevenue went in appeal before the Tribunal and specifically\nraised the plea that the question of jurisdiction to reopen the\nassessment having been expressly given up by the assessee in\nthe appeal against the reassessment order in the first round, the\nassessee was debarred from raising that point again before the\nAAC and the AAC was equally wrong in permitting the assessee\nto raise that point which had become final in the first round and\nin adjudicating upon the same. The plea of the Revenue\nimpressed the Tribunal which took the view that after its earlier\norder in the first round of proceedings the matter attained\nfinality with regard to the point of jurisdiction which was given\nup before the AAC and not agitated further and that in the\nremand proceedings what was open before the Assessing Officer\nwas only the question whether the addition was justified on\nmerits and the point regarding the jurisdictional aspect was not\nopen before the Assessing Officer. According to the Tribunal,\nthe assessee having raised the point in the first round and\nhaving given it up could not revive it in the second round of\nproceedings where the issue was limited to the merits of the\nadditions. In this view, the Tribunal accepted the Revenues\nplea. The assessee thereafter carried order of the Tribunal in\nreference before the Gujarat High Court. The High Court after\nconsidering various judgments of the Supreme Court on the\npoint of jurisdiction to reopen the assessment and also after\nspecifically discussing the judgment of the Supreme Court in\nOnkarmal Nathmal Trust (supra) and Dasa Muni Reddy (supra)\nheld that the Tribunal was in error in holding that the question\nof jurisdiction became final when it passed the earlier remand\norder. It was held that neither the question of res judicata nor\nthe rule of estoppel could be invoked where the jurisdiction of\nan authority was under challenge. According to Hon'ble\nGujarat High Court, the rule of res judicata cannot be invoked\nwhere the question involved is the competence of the Court to\nassume jurisdiction, either pecuniary or territorial or over the\nsubject matter of the dispute. Hon'ble High Court further held\nthat since neither consent nor waiver can confer jurisdiction\nupon the Assessing Officer where it did not exist, no importance\ncould be attached to the fact that the assessee, in the first round\nof proceedings, expressly gave up the plea against the erroneous\nassumption of jurisdiction by the assessing authority.\nAccording to the Hon'ble Court, the \"finality or conclusiveness\ncould only arise in respect of orders which are competent orders\nwith jurisdiction and if the proceedings of reassessment are not\nvalidly initiated at all, the order would be a void order as per\nthe settled legal position which could never have any finality or\nconclusiveness. If the original order is without jurisdiction, it\nwould be only a nullity confirmed in further appeals'. In this\nview of the matter, Hon'ble High Court finally answered the\nreference in favour of the assessee.\n8.

by the assessee, the\nadjudication on merits is merely academic and is therefore not\nbeing dealt with by us.\n25. The appeal of the assessee is allowed in above terms.\n21. We have not referred to the other decisions cited by the learned\nAuthorized Representative (Ld. AR) for the sake of brevity, as they\npertain to the same issue. The learned Departmental Representative\n(Ld. DR) has also not brought to our notice any contrary judgment\nrendered either by any High Court or by the Hon'ble Supreme Court on\nthe issue at hand. In the absence of any binding precedent to the\ncontrary, we are bound to follow the decision of the coordinate Bench\nas relied upon by the Ld. AR.\n22. Accordingly, we allowed the appeal of the assessee and struck\ndown the order passed by the ld. PCIT u/s 263 of the Act.\"\n4. I further find that an identical issue was\ndecided by this Bench in C.O. No.41/CHD/2024. The finding of the\nTribunal read as under:\n\

6. We have duly considered the rival contentions and gone through the record\ncarefully. Admittedly, notice under Section 148 was issued after the Notification\nissued by the Ministry of Finance, Government of India on 29.03.2022. The notice\nunder Section 148 has been issued on 29.03.2023 i.e. almost one year from the\nNotification. Thus, facts of other year are squarely applicable. The issue in\ndispute is covered by the judgement of Hon'ble jurisdictional High Court which\nread as under :\n“DEEPAK SIBAL, J. (Oral)\n1. Challenge made through the instant petition is to the notice dated\n01.03.2025 (Annexure P-l) issued to the petitioner by the respondents under Section\n148 of the Income Tax Act, 1961. The primary ground of challenge raised by the\npetitioner is that the impugned notice has been issued by the Jurisdictional Assessing\nOfficer which could not have been done because in terms of the notification dated\n29.03.2022 (Annexure P-2), issued by the Ministry of Finance. Government of India,\nthe impugned notice could have been issued only by way of faceless assessment.\n2. In support of his afore submission, learned counsel for the petitioner places\nreliance on the following two judgments of this Court:-\ni. CWP-15745-2024, titled Jatinder Singh Bhangu Vs. Union of India and\nothers, decided on 19.07.2024; and\nii. CWP-21509-2023, titled Jasjit Singh Vs. Union of India and others,\ndecided on 29.07.2024.\n3. Learned counsel for the respondents does not dispute the fact that the case\nof the petitioner is covered in his favour by the law laid down through the aforesaid\ntwo judgments rendered by two different co-ordinate Benches of this Court in\nJatinder Singh Bhangu and Jasjit Singh's case (supra).\n4. In the light of the above, in terms of the law laid down in Jatinder\nSingh Bhangu's and Jasjit Singh's cases (supra) the impugned notice dated\n01.03.2025 (Annexure P-1) issued by the Jurisdictional Assessing Officer, is hereby\nquashed with liberty to the respondents to proceed against the petitioner in\naccordance with law.\n5. The petition is allowed in the above terms.\n[DEEPAK SIBAL]\n17\n30.04.2025\nJUDGE\n[ LAPITA BANERJI]\nJUDGE\n7. Respectfully following the judgement of the Hon'ble High Court, we allow the ground\nof appeal of Cross Objection and hold that notice issued under Section 148 of the Income\nTax Act in assessment year 2019-20 is bad in the eyes of law. It was without jurisdiction.\nAccordingly, re-assessment order is quashed.\"\n5. Apart from this order, there are large number of judgements\nat the end of the Jurisdictional High Court including in the case of\nDisha Gupta (supra).\n6. Respectfully following the judgement, we quash the re-\nassessment order because notice u/s 148A(1) was issued on\n31.03.2022 as observed by the JAO in the assessment order.\nAccordingly, this plea of the assessee is allowed and re-\nassessment order is quashed.\n7. In the result, appeal of the assessee is allowed.\"\n6. Therefore, following the decisions of Coordinate Bench\nmentioned hereinabove, I find merit in the submissions made\nby the Ld. AR of the Assessee and held that the orders passed\nby the Assessing Officer and sustained by the CIT(A) are not\nsustainable in the eyes of law and are accordingly quashed.\nThe appeal of the Assessee stands allowed.\nOrder pronounced on 17-11-2025.\nSd/-\n( LALIET KUMAR )\nJudicial Member\n“आर.के.”\n18\nआदेश की प्रतिलिपि अग्रेषित /