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Facts
The assessee did not file an Income Tax Return (ITR) for AY 2011-12, leading to a reassessment notice issued under section 148. The subsequent assessment was set aside by the PCIT under section 263. Crucially, the ITAT had previously annulled the original reassessment order (in ITA No.2884/Del/2022, dated 17.02.2023) on the grounds that the reopening was bad in law.
Held
The Tribunal held that since the foundational reassessment order had been annulled by the ITAT, all subsequent orders, including the PCIT's order under section 263 and the assessment order framed pursuant to it, lacked a valid foundation and must therefore also fall. The appeal was allowed.
Key Issues
Whether assessment and subsequent orders are valid when the underlying reassessment proceedings initiated under section 147 were previously annulled by the ITAT for being bad in law.
Sections Cited
147, 143(3), 143(2), 148, 263, 68, 234A, 234B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: SH. N. K. BILLAIYA & SH. KUL BHARAT
This appeal by the assessee is preferred against the order of the CIT(A)- 2, New Delhi dated 29.07.2019 pertaining to A.Y. 2011-12.
The grievance of the assessee read as under :-
The Id. Commissioner of Income Tax (Appeals) - 2, New Delhi [hereafter the CIT(A)] failed to provide proper opportunity of hearing.
2. The impugned order by the Id. CIT(A) is in violation of the Board's Instruction No. 20/2013 dated 23-12-2003 reiterated on 19-06-2015 vide F.No.279/Misc 53/2003-ITJ, as the appeal was purportedly heard on 08-07-2019 and the impugned order was passed on 29-07- 2019.
3. The assessment order is invalid, inter alia, because the initiation of proceedings u/s 147 of the Act and the original/initial order dated 31-03-2015 passed by the Id. ITO, Ward 5(4), New Delhi u/s 147/ 143(3), being without jurisdiction, is invalid, null and void ab initio.
3.1 The Id. CIT(A) failed to appreciate that the assessment order without jurisdiction renders all consequential orders invalid and can be challenged in collateral proceedings; and the ld. CIT(A) erred in holding that these grounds pertain to the original order and failed to decide the ground.
3.2 The Id. CIT(A) failed to appreciate that the onus to prove the service of notice is on the Id. AO and the ld. CIT(A) erred in observing that the Assessee has not filed any proof to show that notice u/s 143(2) was not issued and notice u/s 148 was not served.
4 The ld. CIT(A) failed to appreciate the fact that the assessment order is invalid, inter alia, because the order u/s 263 by the Id. Pr. CIT is invalid.
5 The Id. CIT(A) erred in upholding addition of Rs. 9,11,61,905 u/s 68 of the Act.
6 The Id. CIT(A) erroneously observed that the ground of appeal No. 4 to 10 are in respect of the addition made in the original/initial assessment order, which has not been set aside by the ld. Pr. CIT and the Id. CIT(A) erred in not deciding the ground of appeal No. 4 to 10.
7 The Id. CIT(A) erred in upholding charging of interest u/s 234A and 234B of the Act and without prejudice the same is excessive.
8 The observations made in the assessment order as well as the impugned appellate order are against the facts of the case as well as law.
9 The assessment order and impugned appellate order is against the facts of the case as well as law.
Briefly stated the peculiar facts of the case in hand are that the assessee did not file its return of income for the year under consideration, therefore, notice u/s. 148 was issued on 21.02.2014 for reassessment. The assessee filed its return of income declaring income of Rs.1679349/- which was assessed at Rs.45,71,040/-. This assessment was set aside by the PCIT-2, Delhi u/s. 263 of the Act.