Section 120 of the Income Tax Act

This case outlines the fundamental tests for invoking Section 263, holding that an assessment order is 'erroneous' if based on incorrect facts or incorrect application of law, or passed without due inquiry. For revision, both the conditions of being erroneous and prejudicial to the interest of the Revenue must be fulfilled.

An assessee who participates in assessment proceedings without challenging the Assessing Officer's jurisdiction, particularly concerning a Section 148 notice for reassessment, cannot subsequently dispute that jurisdiction.

Section 292BB of the Income Tax Act, 1961, is a rule of evidence that validates service of notice in certain circumstances. It introduces a deeming fiction that if an assessee appears in any proceeding or cooperates in any inquiry relating to assessment or reassessment, it shall be deemed that any required notice was duly served, precluding objection to such service.

A question of law concerning the root of jurisdiction can be raised for the first time before the Income Tax Appellate Tribunal. A defect of jurisdiction is incurable, and jurisdiction, which cannot be conferred by default or agreement, is determined by its initiation date and operates prospectively, not retrospectively.

A District Valuation Officer (DVO) report, by itself, is not sufficient incriminating evidence to make additions for unexplained investments in a block assessment under Section 158BC. The revenue bears the primary burden of proof to establish undisclosed income, and a DVO opinion alone is also insufficient information for reopening an assessment under Section 147.

The exercise of a power must be referable to a jurisdiction that validates it, not one that would render it nugatory. Provisions concerning the machinery for assessment must be interpreted to make the tax charge effective.

An assessment notice issued under section 143(2) is invalid if it is not issued by the Income Tax Officer (ITO) as per CBDT Instruction No. 1/2011, even if issued by an Assistant Commissioner of Income Tax (ACIT). Such an invalid notice renders the subsequent assessment void.

An assessee has no fundamental right to be assessed by a particular Assessing Officer or at a specific place. Orders transferring a case are administrative, for better revenue administration, and are not justiciable unless mala fides or clear prejudice is proven, with inconvenience not being a valid ground.

A Departmental Valuation Officer's (DVO) report, by itself, is not sufficient information to conclude understatement of consideration or make additions to income. The Revenue must discharge the burden of proving actual receipt of higher consideration, beyond merely relying on a DVO's opinion, especially in the absence of incriminating evidence.

An assessment order is invalid if it is based on a notice issued under section 143(2) by an Assessing Officer who lacked jurisdiction at the time the notice was issued, even if the case was subsequently transferred to an officer with jurisdiction.