VALIANT GLASS WORKS P.LTD, MUMBAI V. ASST CIT CEN CIR 38, MUMBAI

ITA 1612/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2284 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 09-04-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 27-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G M DOSSCIT
• Keywords: Reopening of assessment; Business income; Rectification of order; Question of law; Difference of opinion; Block assessment; Change of opinion; Reassessment proceedings
• Section: 143(3); 80HHC; 153A; 80IB; 147; 148; 263; 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUM BAI BEFORE SRI G. S. PANNU, ACCOUNTANT MEMBER AND SRI SANJAY GARG, JUDICIAL MEMBER ITA NO.1612/MUM/2013 (A.Y.:2002-03) VALIANT GLASS WORKS PVT. LTD., C/O. SHANKARLAL JAIN & ASSOCIATES, 12, ENGINEER BUILDING, 265, PRINCESS STREET, MUMBAI 400 002 VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-38, MUMBAI PAN:AAACV 1224 E APPELLANT .. RESPONDENT APPELLANT BY: SHRI S. L. JAIN, AR RESPONDENT BY: SHRI G. M. DOSS, (CIT& DR) DATE OF HEARING: 30-06-2016 DATE OF PRONOUNCEMENT: 27-07-2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-41, MUMBAI DATED 23-01-2013 FOR ASSESSMEN T YEAR 2002-03. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUN DS OF APPEAL:- 1. THE LD. CIT (A) ERRED IN CONFIRMING THE ORDER A S PASSED BY THE LD. ASSESSING OFFICER U/S 143(3) WITHOUT PROPERLY A PPRECIATING THE FACT THAT ORDER IS BEING SET ASIDE BY LD. COMMI SSIONER OF INCOME TAX U/S AS IN THE ORIGINAL ASSESSMENT PROCEE DINGS NOTICE ISSUED U/S 148 AND ISSUES ARISING THEREIN WE RE NOT CONSIDERED. THE LD. CIT (A) ERRED IN HOLDING THAT V ALIDITY OF NOTICE U/S 148 CANNOT BE CONSIDERED IN APPEAL. 2. LD. CIT (A) ERRED IN NOT CONSIDERING THE FACT TH AT NOTICE ISSUED U/S 148 BEING ISSUED AFTER LAPSE OF FOUR YEARS FROM ASSESSMENT YEAR WHILE THE ORIGINAL ASSESSMENT WAS COMPLETED U/ S 143(3) NOTICE BEING INVALID, NO ISSUE ARISING OUT OF SUCH NOTICE CAN BE CONSIDERED UNDER ASSESSMENT ORDER UNDER APPEAL. 3. APPELLANT PRAY THAT ORDER AS PASSED BY LD. ASSES SING OFFICER BE CANCELLED. ITA NO.1612/MUM/2013 2 4. APPELLANT CRAVE YOUR HONOURS LEAVE TO ADD, ALTE R OR AMEND ANY GROUND OF APPEAL AT THE TIME OF HEARING OR BEFO RE. 2. APART FROM THAT, THE ASSESSEE HAS TAKEN THE FOLL OWING ADDITIONAL LEGAL GROUNDS OF APPEAL:- 1. NO INCREMENTAL MATERIAL BEING FOUND DURING THE COURSE OF SEARCH; THERE WAS NO ABETMENT OF ASSESSMENT ORDER O RIGINALLY PASSED U/S 143(2) DTD. 28.2.05; HENCE ORDER PASSED U/S. 153A R. W. SEC. 143(3) DTD. 22.12.09 IS WITHOUT JURISDIC TION. HENCE, ORDER PASSED BY LD. CIT U/S. 263 DTD.2.11.10 IS WIT HOUT JURISDICTION. THE CONSEQUENTIAL ORDER PASSED U/S. 1 433) R. W. SEC. 263 DTD. 30.12.11 IS BAD IN LAW AND VOID. 2. APPELLANT PRAY THAT ORDER PASSED U/S. 143(3) R. W. SEC. 263 DTD. 30.12.11 BE CANCELLED. 3. THE BRIEF FACTS OF THE CASE AS DERIVED FROM THE ORDER OF THE LEARNED CIT (A) ARE AS UNDER:- THE APPELLANT FILED ITS RETURN OF INCOME ON 31-10- 2002 DECLARING INCOME OF RS.85,30,400/- AFTER CLAIMING D EDUCTION UNDER THE FOLLOWING SECTIONS:- (I) 80 HHC - RS.1,90,61,155/- (II) 80 IB - RS.1,18,24,950/- ASSESSMENT ORDER U/S 143(3) WAS PASSED BY THE ASSES SING OFFICER ON 28-02-2005. IN THIS ASSESSMENT ORDER, CLAIM OF D EDUCTION UNDER SECTION 80IB WAS ALLOWED WITHOUT ANY VARIATION. HOW EVER, DEDUCTION U/S. 80 HHC WAS MODIFIED AND RECOMPUTED B Y EXCLUDING FROM BUSINESS INCOME DEDUCTION CLAIMED U/S 80IB OF THE INCOME- TAX ACT. THEREAFTER, ASSESSING OFFICER PASSED RECTIFICATION U/S. 154 OF THE INCOME-TAX ACT ON 02-05-2005. IN THIS ORDER, AS SESSING OFFICER RE-COMPUTED THE DEDUCTION U/S. 80HHC OF THE INCOME- TAX ACT HOLDING THAT DEPB RECEIPTS WERE COVERED BY PROVISIO NS OF SECTION 28(IV) OF THE INCOME-TAX ACT AND THE SAME WOULD NOT QUALIFY FOR PROPORTIONATE AMOUNT OF 90% TO BE ALLOWED AS DEDUCT ION. IN THE ITA NO.1612/MUM/2013 3 SAID RECTIFICATION ORDER, THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 80HHC WAS REDUCED TO RS.588/-. HOWEVER, WHILE ALLOW ING THE CLAIM OF ASSESSEE FOR DEDUCTION U/S. 80IB OF THE IN COME-TAX ACT, THE ASSESSING OFFICER CONSIDERED THE DEPB RECEIPTS AS PROFIT DERIVED FROM INDUSTRIAL UNDERTAKING AND, THEREFORE, HE DID NOT EXCLUDE THESE RECEIPTS WHILE COMPUTING DEDUCTION U/ S. 80IB OF THE INCOME-TAX ACT. LATER ON, ASSESSING OFFICER FORMED THE OPINION THA T DEDUCTION U/S. 80IB IS NOT TO BE ALLOWED ON THE DEP B RECEIPTS. SINCE ASSESSEE WAS ALLOWED EXCESS DEDUCTION U/S. 80 IB OF THE INCOME-TAX ACT, HE ISSUED NOTICE U/S 148 OF THE INC OME-TAX ACT ON 14-02-2007 ON THIS ISSUE, AFTER OBTAINING APPROVAL OF ADDITIONAL CIT. WHILE RE-ASSESSMENT PROCEEDINGS WERE IN PROGRESS, SEARCH WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASS ESSEE ON 10-10- 2007. AS PER PROVISO TO SECTION 153A OF THE INCOME- TAX ACT, THE RE-ASSESSMENT PROCEEDINGS, PENDING ON THE DATE OF S EARCH STOOD ABATED. THE ASSESSING OFFICER ALSO NOTED THIS FACT OF ABATEMENT OF REASSESSMENT PROCEEDINGS VIDE ORDER SHEET ENTRY DAT ED 22-11-2007. CONSEQUENT TO SEARCH U/S. 132 OF THE INCOME-TAX AC T, NOTICE U/S. 153A WAS ISSUED TO THE ASSESSEE ON 11-03-2008 REQUIRING IT TO FILE THE RETURN OF INCOME WITHIN 15 DAYS. THE APPEL LANT FILED THE RETURN OF INCOME ON 17-11-2008 DECLARING INCOME OF RS.85,30,400/- WHICH WAS THE SAME INCOME DECLARED B Y IT IN THE RETURN OF INCOME FILED ON 31-10-2002. THE ASSESSING OFFICER PASSED THE ORDER U/S. 143(3) R. W. S. 153A ON 22-12 -2009 ASSESSING THE TOTAL INCOME AT RS.2,67,38,960/- AFTER ALLOWING THE DEDUCTION U/S. 80HHC OF RS.9,27,588/- AND U/S. 80IB OF RS.1, 18,24,950/-. THE LD. CIT (A) VIDE ORDER DATED 06-12-2010 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. ITA NO.1612/MUM/2013 4 4. THEREAFTER, LD. CIT, CENTRAL-III, MUMBAI EXAMINE D THE RECORDS AND FOUND THAT THE ASSESSING OFFICER SHOULD HAVE CONSIDERED THE ISSUES WHICH WERE ARISING IN THE RE- ASSESSMENT PROCEEDINGS BUT HE FAILED TO CONSIDER THESE ISSUES IN THE ORDER PASSED U/S. 153A OF THE I. T. ACT, 1961. FOR THIS R EASON, THE LD. CIT WAS OF THE OPINION THAT THE ORDER PASSED BY THE ASS ESSING OFFICER U/S. 153A OF THE I. T. ACT, 1961 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, LD. CIT OBSERVED AS FOLLOWS IN PARA 3 OF HIS ORDER U/S. 263 OF THE ACT DATED 02-11-2010:- I HAVE CONSIDERED THE FACTS OF THE CASE. FROM THE P ERUSAL OF THE FACTS IT IS SEEN THAT ASSESSING OFFICER HAS ISSUED NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT TO THE ASSESSEE ON 11-10-2007 . FROM THE REASONS RECORDED BY THE ASSESSING OFFICER AT THE TI ME OF ISSUE OF NOTICE, IT IS NOTICED THAT REASSESSMENT PROCEEDINGS WERE INITIATED FOR WITHDRAWING EXCESS DEDUCTION ALLOWED U/S. 80IB OF T HE INCOME-TAX ACT AS ACCORDING TO ASSESSING OFFICER DEPB RECEIPTS ARE NOT PROFITS DERIVED FROM THE ELIGIBLE UNDERTAKING AND DEDUCTION U/S. 80IB IS TO BE WORKED OUT AFTER EXCLUDING DEPB RECEIPTS AMOUNTING TO RS.2,19,47,989/- FROM THE BUSINESS INCOME. THE ASSE SSING OFFICER HAS ALSO ISSUED QUESTIONNAIRE DATED 06.07.2007 IN THE C OURSE OF RE- ASSESSMENT PROCEEDINGS REQUIRING ASSESSEE TO EXPLAI N WHY DEDUCTION ALLOWED ON DEPB RECEIPTS SHOULD NOT BE WITHDRAWN. H OWEVER, AS ALREADY EXPLAINED THESE PROCEEDINGS WERE ABATED IN VIEW OF PROVISO TO SECTION 153A OF THE INCOME-TAX ACT. THUS WHILE P ASSING ORDER U/S. 153A OF THE INCOME-TAX ACT DATED 22.12.2009, ASSESS ING OFFICER SHOULD HAVE TAKEN INTO CONSIDERATION ISSUES WHICH W ERE PENDING BEFORE HIM IN THE ABATED REASSESSMENT PROCEEDINGS A ND SHOULD HAVE ADJUDICATED THESE ISSUES IN THE ORDER PASSED U/S. 1 53A OF THE INCOME- TAX ACT. HOWEVER, IN THE 153A ORDER, ASSESSING OFFI CER HAS FAILED TO CONSIDER THESE ISSUES. THEREFORE, IN THE 153A ORDER , ASSESSING OFFICER HAS FAILED TO CONSIDER THESE ISSUES. THEREFORE, THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 153A OF T HE INCOME-TAX ACT IS ERRONEOUS AS ASSESSING OFFICER HAS NOT DECIDED WHETHER DEPB RECE IPTS CAN BE CONSIDERED AS PROFIT DERIVED FROM INDUSTRIAL UNDERT AKING. SIMILAR ISSUE HAS NOW BEEN DECIDED BY THE SUPREME COURT IN THE CA SE OF LIBERTY INDIA 317 ITR 218 WHEREIN IT WAS HELD THAT DEPB REC EIPTS ARE NOT DERIVED FROM INDUSTRIAL UNDERTAKING AND HENCE, THES E RECEIPTS ARE NOT TO BE TAKEN INTO CONSIDERATION IN COMPUTING DEDUCTI ON U/S. 80 IB OF THE INCOME-TAX ACT. THUS, THE ORDER OF ASSESSING OF FICER IS NOT ONLY ERRONEOUS, BUT IT IS ALSO PREJUDICIAL TO THE INTERE ST OF REVENUE AS THE ITA NO.1612/MUM/2013 5 ASSESSEE HAS BEEN ALLOWED EXCESS CLAIM OF RS.87,14, 396/- UNDER SECTION 80IB OF THE INCOME-TAX ACT. 5. IN VIEW OF THE ABOVE, THE LD. CIT SET-ASIDE THE ORDER PASSED BY THE AO U/S. 143(3) R. W. S. 153A OF THE I. T. AC T, 1961 AND DIRECTED THE ASSESSING OFFICER TO PASS FRESH ORDER AFTER TAKING INTO CONSIDERATION THE ISSUES RAISED IN THE RE-ASSESSMEN T PROCEEDINGS WHICH WERE ABATED BY HIM ON 22-11-2007. HE, FURTHER DIRECTED THAT THE AO WILL PASS FRESH ORDER AND WILL DECIDE AS TO WHETHER THE ASSESSEE IS ENTITLED TO DEDUCTION U/S. 80IB ON THE DEPB RECEIPTS AND WILL TAKE INTO CONSIDERATION THE RATIO LAID DOW N BY THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA 317 ITR 218 AND APPLY THE SAME TO THE FACTS OF THE CASE. GIVING EFFECT TO THE DIRECTIONS ISSUED BY LD. CIT U/S. 263 OF THE I. T. ACT, 1961, THE ASSESSING OFFICER PROCEEDE D TO PASS THE FRESH ASSESSMENT ORDER. DURING THESE PROCEEDINGS, T HE LD. AR OF THE ASSESSEE RAISED OBJECTIONS THAT THE ORIGINAL VERY R EASSESSMENT PROCEEDINGS INITIATED BY NOTICE UNDER SECTION 148 D ATED 14.02.2007 WERE BAD IN LAW BEING WITHOUT JURISDICTION, HENCE, IS TO BE TREATED AS NON-EST, THEREFORE THE ORIGINAL ASSESSMENT PROCE EDINGS WILL BE DEEMED TO BE COMPLETED AND NOT PENDING ON THE DATE OF SEARCH. HE THEREFORE, PLEADED THAT HIS OBJECTIONS AS TO THE VA LIDITY OF THE REOPENING OF THE ASSESSMENT BE CONSIDERED AND DECID ED. THE ASSESSING OFFICER, HOWEVER DISMISSED THE OBJECTIONS OF THE ASSESSEE AND PASSED THE FRESH ASSESSMENT ORDER DATED 30.12.2 011 RE- COMPUTING THE DEDUCTION U/S. 80IB AT RS.31,10,554/- EXCLUDING THE DEDUCTION EARLIER ALLOWED ON THE DEPB RECEIPTS. 6. BEING AGGRIEVED BY THE SAID ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) AND REIT ERATED ITS SUBMISSIONS AS WERE MADE BEFORE THE AO AND REQUESTE D FOR CONSIDERATION OF THE OBJECTIONS REGARDING THE VALID ITY OF THE ITA NO.1612/MUM/2013 6 REOPENING OF THE ASSESSMENT U/S 147 OF THE ACT. T HE LEARNED CIT (A), HOWEVER, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL OF THE ASSESSEE BY OBSERVING A S UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SU BMISSIONS MADE BY THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT THE ORD ER APPEALED AGAINST IS AN ORDER PASSED BY THE ASSESSING OFFICER GIVING EFFECT TO THE ORDER U/S. 263 OF LD. CIT. AS PER THE PROVISIONS OF THE A CT, THE ASSESSING OFFICER IS REQUIRED TO FOLLOW THE DIRECTIONS OF LD. CIT. THIS IS WHAT THE ASSESSING OFFICER HAS DONE. THE ORDER UNDER APPEAL IS NOT AN ORDER PASSED U/S 147 OF THE I. T. ACT, 1961. THE PROCEEDI NGS INITIATED BY THE ASSESSING OFFICER BY THE ISSUE OF NOTICE U/S. 148 H AD ALREADY ABATED ON THE INITIATION OF SEARCH U/S. 132 IN THE CASE OF THE ASSESSEE IN VIEW OF THE PROVISIONS OF SECTION 153A OF THE I. T. ACT, 1961. HENCE, THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WH ICH HAS BEEN APPEALED AGAINST BY THE ASSESSEE IS NOT IN RELATION TO THE PROCEEDINGS INITIATED U/S. 148. THE LD. AR OF THE ASSESSEE HAS ALSO INFORMED DURING THE COURSE OF THE APPELLATE PROCEEDINGS THAT NO APP EAL HAD BEEN FILED BEFORE THE HONBLE ITAT BY THE APPELLANT AGAINST TH E ORDER U/S. 263 PASSED BY THE LD. CIT. ONCE, THE ORDER APPEALED AGA INST IS NOT AN ORDER PASSED U/S 147, THE QUESTION OF EXAMINING THE JURIS DICTION OF THE ASSESSING OFFICER UNDER THE PROVISO THE SECTION 147 DOES NOT ARISE. THE LEGAL VALIDITY OF THE NOTICE U/S. 148 ALSO CANN OT BE QUESTIONED AT THIS STAGE SINCE THE PROCEEDINGS INFLATED AS A RESU LT OF T HE ISSUANCE OF NOTICE HAS LONG SINCE ABATED AND THE PRESENT ORDER HAS BEEN PASSED U/S. 153A R. W. S. 263. IN THE ORDER U/S. 263, LD. CIT HAD, WHILE SETTING ASIDE THE ORDER U/S. 153A SPECIFICALLY DIRECTED THE ASSESSING OFFICER TO PASS FRESH ORDER IN WHICH HE WILL DECIDE AS TO WHET HER THE ASSESSEE IS ENTITLED TO DEDUCTION U/S. 80IB ON DEPB RECEIPTS AF TER TAKING INTO CONSIDERATION THE RATIO LAID DOWN BY T HE HONBLE S UPREME COURT IN THE CASE OF LIBERTY INDIA 317 ITR 218. THIS IS WHAT THE ASSESSING OFFICER HAS DONE. HENCE, NO FAULT CAN BE FOUND WITH HIS ACTION OF PASSING THE ORDER WHICH IS AS PER LAW. THE ACTION O F THE ASSESSING OFFICER OF REJECTING THE APPELLANTS SUBMISSIONS TH AT NOTICE U/S. 148 DATED 10.11.2007 WAS INVALID AND WITHOUT ANY AUTHOR ITY OF LAW IS, THEREFORE, CORRECT. THE GROUND OF APPEAL FILED BY T HE ASSESSEE IS DISMISSED. 7. BEING AGGRIEVED BY THE ABOVE ORDER OF THE LEARNE D CIT(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O GONE THROUGH THE RECORDS. THE LD. AR FOR THE ASSESSEE SU BMITTED BEFORE US THAT WHILE GIVING EFFECT TO THE ORDER OF THE LEA RNED CIT PASSED U/S 263 OF THE ACT, THE AO HAD FAILED TO CONSIDER T HE OBJECTIONS OF ITA NO.1612/MUM/2013 7 THE ASSESSEE REGARDING VALIDITY OF THE REOPENING OF THE ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT. THE SUBMISSION OF T HE ASSESSEE WAS THAT IT WAS NOT THE ORIGINAL ASSESSMENT PROCEEDINGS WHICH WERE ABATED BUT ONLY THE REOPENED ASSESSMENT PROCEEDINGS . IF, THE AO HAD TO CONSIDER AND MAKE THE ADDITIONS WHICH WERE T HE SUBJECT MATTER OF CONSIDERATION IN THE REOPENED ASSESSMENT PROCEEDINGS, THE AO WAS ALSO LEGALLY DUTY BOUND TO CONSIDER THE OBJECTIONS OF THE ASSESSEE IN RELATION TO THE VERY VALIDITY OF TH E INITIATION OF SUCH REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT. IN CAS E, THE SAID REOPENED ASSESSMENT PROCEEDINGS WERE HELD TO BE INV ALID, THEN THE AO WAS PRECLUDED FROM GOING INTO THE MERITS AND IN SUCH CIRCUMSTANCES, SUCH PROCEEDINGS BEING VOID AND AB I NITIO COULD NOT BE CONSIDERED TO BE PENDING OR ABATED FOR THE PURPO SE OF ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT. THUS, T HE ORIGINAL ASSESSMENT PROCEEDINGS WOULD BE DEEMED TO BE COMPLE TED AND NOT ABATED AS ON THE DATE OF SEARCH OPERATION. THE ASSE SSEE ALSO FURTHER PLEADED THAT THE NOTICE ISSUED U/S 148 OF THE ACT I N THOSE PROCEEDINGS WAS HIT BY THE PROVISO TO SECTION 147 O F THE ACT. THE ASSESSEE HAD DULY DISCLOSED ALL THE MATERIAL FACTS RELEVANT FOR COMPLETING THE ASSESSMENT AND THE NOTICE WAS ISSUED AFTER A LAPSE OF FOUR YEARS AND THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO TRULY AND FULLY DISCLOSE ALL THE RELEVANT MATERIAL FACTS BEFORE THE AO FOR COMPLETING THE ASSESSMENT. SECONDLY, AT THE TIME OF REOPENING ASSESSMENT PROCEEDINGS, THE AO HAD NO REA SON TO BELIEVE THAT ANY INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. IT WAS FURTHER SUBMITTED THAT SINCE NO INCRIMINATING M ATERIAL WAS FOUND DURING THE SEARCH ACTION, HENCE, IN THE LIGHT OF THE DECISIONS OF VARIOUS COURTS INCLUDING THAT OF THE HONBLE BOM BAY HIGH COURT IN THE CASES OF ALL CARGO LOGISTICS ITA NO .1969 OF 2013 AND IN THE CASE OF CONTINENTAL WAREHOUSING CORPORA TION ITA ITA NO.1612/MUM/2013 8 NO. 523 OF 2013 REPORTED IN (2015) 279 CTR 0389 (BO MBAY), IN RELATION TO THE ASSESSMENTS WHICH HAVE ALREADY BEEN CONCLUDED, THE AO WAS PRECLUDED FROM MAKING ADDITIONS ON ANY O THER ISSUE EXCEPT RELATING OR CONCERNING TO THE INCRIMINATING MATERIAL FOUND DURING THE SEARCH ACTION . HE THEREFORE, HAS SUBMIT TED THAT SINCE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH ACTION, HENCE ANY ADDITIONS MADE BY THE AO IN ASSESSMENT PROCEEDI NGS ON OTHER ISSUES INCLUDING THE DEPB RECEIPTS WERE ILLEGAL AND BEYOND HIS JURISDICTION. IN SUPPORT OF HIS CONTENTIONS, THE LE ARNED AR RELIED UPON THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2004-05 AND 2005-06 PASSED IN ITA NO.5077 AND 6123/MUM/2010 VIDE ORDER DATED 11-12-2015 WHEREIN, THE TRIBUNAL WHILE RELYING UPON THE ABOVE STATED DECISI ONS OF THE HONBLE BOMBAY HIGH COURT(SUPRA) HAS HELD THAT SINC E THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE O F SEARCH ACTION IN THE CASE OF THE ASSESSEE AND FURTHER NO ADDITION WAS MADE BY THE REVENUE ON THE BASIS OF ANY MATERIAL FOUND DURING T HE TIME OF SEARCH AND SINCE THE ASSESSMENT FOR THE ABOVE SAID ASSESSMENT YEARS HAD ATTAINED FINALITY; HENCE, IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ALL CA RGO GLOBAL LOGISTICS (SUPRA) THE ADDITIONS MADE BY THE AO WERE NOT SUSTAINABLE. THE LD. AR HAS FURTHER CONTENDED THAT SINCE THE VERY REOPENING OF THE ASSESSMENT U/S 147 OF THE ACT WAS INVALID HENCE, THE ORDER PASSED BY THE LEARNED CIT U/S 263 OF THE ACT WAS ALSO ILLEGAL AND FURTHER THAT THE ORDER PASSED BY THE AO IN COMPLYING WITH THE DIRECTIONS GIVEN BY THE LEARNED CIT(A) WAS ALSO INVALID. THE ORIGINAL ASSESSMENT PROCEEDINGS FOR THE YEAR UN DER CONSIDERATION HAD THUS, ALREADY ATTAINED FINALITY. HE HAS FURTHER SUBMITTED THAT EVEN OTHERWISE IN THE FIRST ROUND OF THE ASSESSMENT PROCEEDINGS CARRIED OUT U/S 153A OF THE ACT, THE AO HAD NOT ITA NO.1612/MUM/2013 9 CONSIDERED ANY ISSUE RELATING TO THE ALLOWANCE OR D ISALLOWANCE OF DEDUCTION U/S 80IB AND HENCE, THERE WAS NO REASON F OR THE ASSESSEE TO AGITATE THE VALIDITY OF THE ABATED PROCEEDINGS U /S 147 OF THE ACT. HOWEVER, SINCE THE LEARNED CIT HAD DIRECTED WHILE P ASSING REVISION ORDER U/S 263 OF THE ACT TO CONSIDER THE A SSESSMENT RELATING TO THE PROCEEDINGS U/S 147 OF THE ACT, UND ER CIRCUMSTANCES THE ASSESSEE WAS ALSO ENTITLED TO RAISE THE QUESTIO N OF THE VERY VALIDITY OF INITIATION OF SUCH PROCEEDINGS U/S 147 OF THE ACT AND THAT THE AO WAS DUTY BOUND TO CONSIDER THE OBJECTIO NS OF THE ASSESSEE IN THIS REGARD. IF, THE VERY VALIDITY OF T HE PROCEEDINGS U/S 147 OF THE ACT IS HELD TO BE ILLEGAL, THEN THERE WA S NO QUESTION OF MAKING ANY ADDITION RELATING TO THE ISSUE UNDER CON SIDERATION DURING THE PROCEEDINGS U/S 147 OF THE ACT. HE HAS F URTHER SUBMITTED THAT THE AO COULD NOT HAVE MADE THE ADDITION RELATI NG TO THE ISSUE OF DEDUCTION OF DEPB LICENSE U/S 80 IB OF THE ACT B ECAUSE THAT ISSUE HAD ALREADY BEEN CLOSED AND ATTAINED FINALITY DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. 9. ON THE OTHER HAND THE LEARNED DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. HE HAS FURTHER CONTENDED T HAT THE ISSUE RELATING TO THE VALIDITY OF THE PROCEEDINGS U/S 147 OF THE ACT WOULD HAVE BEEN AGITATED IN THOSE PROCEEDINGS ONLY. HE HA S FURTHER CONTENDED THAT ONCE THE PROCEEDINGS U/S 147 OF THE ACT HAVE BEEN ABATED IN VIEW OF THE SEARCH ACTION CARRIED OUT U/S 132 OF THE ACT IN THE CASE OF THE ASSESSEE, THE ASSESSEE HAS GOT NO R IGHT TO RAISE OBJECTION REGARDING VALIDITY OF THE PROCEEDINGS U/S 147 DURING THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT AND IT W AS OPEN TO THE AO TO ASSESS THE INCOME OF THE ASSESSEE AFRESH CONS IDERING THE DEDUCTION IF ANY WRONGLY ALLOWED TO THE ASSESSEE EA RLIER. THERE WAS INFORMATION AVAILABLE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT THAT THE ASSESSEE H AD BEEN ITA NO.1612/MUM/2013 10 ORIGINALLY WRONGLY ALLOWED DEDUCTION IN RESPECT OF DEPB LICENSES WHICH WAS ALSO THE SUBJECT MATTER IN THE REOPENED A SSESSMENT PROCEEDINGS U/S 147 OF THE ACT, HENCE, THE AO HAD R IGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE IN THIS RESPEC T. HE FURTHER CONTENDED THAT EVEN OTHERWISE, THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE LEARNED CIT PASSED U/S 263 OF THE ACT, HENCE, THE ORDER OF THE LEARNED CIT HAS BECOME FINAL VIDE WHICH HE HAS DIRECTED THE AO TO REVISE THE ASSESSME NT ORDER CONSIDERING THE ISSUE OF GRANT OF 80 IB DEDUCTION T O THE ASSESSEE IN RESPECT OF DEPB RECEIPTS. NOW, THE ASSESSEE HAS BEE N ESTOPPED FROM AGITATING THIS ISSUE DURING THE PROCEEDINGS OF ORDER GIVING EFFECT TO THE ORDER OF THE LEARNED CIT. THEREFORE, IT HAS BEEN SUBMITTED THAT THE LEARNED CIT(A) HAS RIGHTLY DISMI SSED THE APPEAL OF THE ASSESSEE. 10. AFTER CONSIDERING THE RIVAL CONTENTIONS AND CAR EFUL PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT THE CRUCIAL ISSUES RAISED BEFORE US ARE:- 1. AS TO WHETHER THE PLEA THAT REOPENING OF THE AS SESSMENT U/S 147 OF THE ACT WAS INVALID AND BAD IN LAW, CAN BE L OOKED INTO THE CONSEQUENTIAL ASSESSMENT PROCEEDINGS CARRIED OUT AS PER THE DIRECTIONS OF THE LEARNED CIT IN THE ORDER PASSED U/S 263 OF THE ACT; 2. WHETHER THE ASSESSEE IS ESTOPPED FROM TAKING THE PLEA OF THE VALIDITY OF INITIATION OF THE REOPENING OF THE ASSE SSMENT U/S 147 OF THE ACT BECAUSE OF THE FACT THAT THE ASSESSEE HAD NOT C HALLENGED BEFORE THE HIGHER COURT THE VIRES OF THE ORDER OF THE LEAR NED CIT PASSED U/S 263 OF THE ACT VIDE WHICH HE DIRECTED THE AO TO CON SIDER THE ISSUES INVOLVED IN REASSESSMENT PROCEEDINGS WHICH STOOD AB ATED AND PASS FRESH ORDER U/S 153A. 3. IF THE INITIATION OF THE REOPENING OF THE ASSESS MENT U/S 147 IS HELD TO BE ILLEGAL OR NULLITY IN THE EYES OF LAW, T HEN, WHETHER THE AO STILL COULD TAKE INTO CONSIDERATION THE INFORMATION RELATING TO THE ISSUES WHICH WERE THE SUBJECT MATTER SUCH PROCEEDIN GS U/S 147 AND MAKE ADDITIONS IN THAT RESPECT DURING THE FRESH ASS ESSMENT PROCEEDINGS U/S 153A OF THE ACT IN THE ABSENCE OF A NY INCRIMINATING MATERIAL FOUND IN THE SEARCH ACTION. 4. WHETHER THE AO WAS JUSTIFIED IN MAKING THE ADDIT ION IN RESPECT OF DEPB RECEIPTS IN PURSUANCE TO THE DIRECT ION OF THE LEARNED ITA NO.1612/MUM/2013 11 CIT VIDE ORDER PASSED U/S 263 OF THE ACT, WHEN THER E WAS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH ACTI ON. SO FAR AS THE ISSUE AS TO WHETHER THE ASSESSEE COUL D RAISE THE PLEA BEFORE THE AO DURING THE FRESH ASSESSMENT PROCEEDIN GS U/S 153A OF THE ACT PURSUANT TO THE DIRECTION OF THE LEARNED CIT GIVEN IN THE REVISION ORDER PASSED U/S 263 OF THE ACT REGARDING THE VALIDITY OF INITIATION OF THE REOPENING PROCEEDINGS U/S 147 OF THE ACT IS CONCERNED, WE FIND THAT VARIOUS COURTS OF LAW HAVE BEEN UNANIMOUS ON THE PROPOSITION THAT JURISDICTIONAL AS PECT OF AN ORDER PASSED IN A PRIMARY PROCEEDINGS CAN BE EXAMINED IN THE COLLATERAL PROCEEDINGS ALSO. THE VALIDITY OF AN ASSESSMENT ORD ER CAN BE CHALLENGED DURING THE APPELLATE PROCEEDINGS PERTAIN ING TO EXAMINATION OF VALIDITY OF THE ORDER PASSED U/S 263 OF THE ACT. 11. IN A RECENT DECISION IN THE CASE OF THE CASE OF M/S WESTLIFE DEVELOPMENT LTD VS. PRINCIPAL COMMISSIONER OF INCOM E TAX [ITA NO.688/MUM/2016 DECIDED VIDE ORDER DATED 10-06 -2016, THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAS THOROUGHLY E XAMINED THE ISSUE AS TO WHETHER IF THE INITIATION OF THE PRIMAR Y PROCEEDINGS IS INVALID WITHOUT JURISDICTION BUT, THE SAME HAS NOT BEEN AGITATED BY WAY OF ANY APPEAL OR OTHERWISE AND THEREAFTER ON TH E BASIS OF THOSE PRIMARY PROCEEDINGS, CERTAIN SECONDARY PROCEEDINGS SUCH AS REOPENING OF THE ASSESSMENT U/S 147 OF THE ACT OR R EVISION OF THE ASSESSMENT U/S 263 OF THE ACT IS DONE, IN SUCH CIRC UMSTANCES, WHETHER THE ASSESSEE HAS A RIGHT TO CHALLENGE THE V ERY VALIDITY OF THE PRIMARY PROCEEDINGS IN AN APPEAL FILED AGAINST ANY ORDER PASSED IN SUCH SUBSEQUENT/COLLATERAL PROCEEDINGS. THE TRIB UNAL HAS DISCUSSED VARIOUS CASE LAWS IN THIS RESPECT. THE RE LEVANT PART OF THE FINDINGS OF THE TRIBUNAL IS REPRODUCED HEREUNDER:- 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL O F THE ASSESSEE INTER-ALIA STATED THAT IN THIS CASE THE IMPUGNED OR DER PASSED U/S 263 IS BAD IN LAW ON THE JURISDICTIONAL GROUND, THAT IS TO SAY THAT THE ITA NO.1612/MUM/2013 12 ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) DATED 2 440-2013 WHICH HAS BEEN SOUGHT TO BE REVISED BY THE ID.CIT WAS A N ULLITY IN THE EYES OF LAW, AND THEREFORE AN ORDER, WHICH WAS A NULLITY IN THE EYES OF LAW HAD NO EXISTENCE IN THE EYES OF LAW AND, THEREFORE, THE SAME COULD NOT HAVE BEEN REVISED BY THE LD.CIT, THEREBY GIVING FRE SH LIFE TO THE PROCEEDINGS WHICH HAD NO LEGAL EXISTENCE IN THE EYE S OF LAW. IN THIS REGARD, IT HAS BEEN FURTHER EXPLAINED BY THE ID. CO UNSEL THAT THE ORIGINAL ASSESSMENT WAS FRAMED U/S 143(3) UPON AN E RSTWHILE COMPANY, VIZ. M/S 'WESTPOINT LEISUREPARKS PVT LTD' (HEREINAFTER CALLED WLPL), WHICH HAD ALREADY GOT AMALGAMATED INTO ANOTH ER COMPANY NAMELY M/S 'WESTLIFE DEVELOPMENT LTD' (HEREINAFTER CALLED WDL) AND THEREFORE, ON THE DATE OF FRAMING OF THE ASSESSMENT ORDER, WLPL WAS NOT IN EXISTENCE. IT WAS FURTHER SUBMITTED THAT THI S FACT WAS BROUGHT TO THE KNOWLEDGE OF THE ASSESSING OFFICER; DESPITE THAT, THE ASSESSING OFFICER FRAMED THE ASSESSMENT UPON A NON-EXISTING E NTITY. IT WAS SUBMITTED BY HIM THAT FRAMING OF AN ASSESSMENT UPON A COMPANY WHICH HAS ALREADY BEEN AMALGAMATED BY WAY OF AN ORD ER OF THE HIGH COURT IS NULLITY IN THE EYES OF LAW AND IN SUPPORT OF HIS ARGUMENTS HE PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS: 1. JUDGMENT OF DELHI HIGH COURT IN THE CASE OF SPICE INFOTAINMENT LTD. VS. COMMISSIONER OF SERVICE TAX I N ITA 475 & 476 OF 2011, DATED 03.08.2011 2. CIT V. DIMENSION APPARELS P. LTD. [370 ITR 288 (DEL )] 3. I. K. AGENCIES P. LTD. V CIT [347 ITR 664 (CAL)] 4. CIT V EXPRESS NEWSPAPERS LTD. [40 ITR 38 (MAD)] 5. JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT V M ICRA INDIA P. LTD. (2015) 57 TAXMANN.COM 163 (DEL) 6. ORDER OF THE TRIBUNAL MUMBAI BENCH, IN THE CASE OF INSTANT HOLDINGS LTD. ACIT IN ITA NO. 4593, 4748/MU M/2011 ORDER DATED 09.03.2016. 7. ORDER OF THE TRIBUNAL KOLKATA BENCH, IN THE CASE OF EMERALD COMPANY LTD IN ITA NO. 428/KO1/2015 ORDER DATED 13. 01.2016 8. JUDGMENT OF KARNATAKA HIGH COURT IN THE CASE OF CIT V INTEL TECHNO INDIA P. LTD. (2015) 57 TAXMANN.COM 15 9 (KAR) 9. ORDER OF THE TRIBUNAL KOLKATA BENCH, IN THE CASE OF GESTENER (INDIA) ACIT IN 1TA NO. 275/KO1/2007 ' 4. IT WAS FURTHER ARGUED BY HIM THAT THE IMPUGNED A SSESSMENT ORDER WAS NON EST IN THE EYES OF LAW AND, THEREFORE , THE SAME COULD NOT HAVE BEEN REVISED BY THE ID.CIT. IN THIS REGARD , HE RELIED UPON THE JUDGMENT OF HON'BLE DELHI HIGH IN CIT VS ESCORTS FA RMS PVT LTD 180 ITR 80 (DEL) AND UPON THE DECISION OF THE CO-ORDINATE B ENCH IN THE CASE OF KRISHNA KUMAR SARAF VS CIT ITA NO.4562/DE1/2011 DAT ED 24-09-32015 AND STEEL STRIPS LTD V ACIT 53 ITD 553 (CHD). HE TH US REQUESTED THAT THE IMPUGNED REVISION ORDER PASSED BY THE ID.CIT IS ILLEGAL ON THIS PRIMARY JURISDICTIONAL GROUND ITSELF. 5. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE VEHEMENTLY OPPOSED THE ARGUMENTS OF THE ID. COUNSEL . IT WAS ITA NO.1612/MUM/2013 13 SUBMITTED BY THE ID. CIT-DR THAT EVEN IF THE ORIGIN AL ASSESSMENT ORDER WAS FRAMED IN THE NAME OF AN ERSTWHILE COMPANY, THE SAME WAS ONLY A MERE IRREGULARITY AND THAT DOES NOT MAKE THE ASSE SSMENT AS NULLITY IN THE EYES OF LAW. IT WAS SUBMITTED THAT SUCH LAPS ES WERE PROTECTED U/S 292B OF THE ACT. 6. IN ADDITION TO THE ABOVE, IT WAS FURTHER SUBMITT ED BY HIM THAT THE ISSUE WITH REGARD TO ILLEGALITY IN THE ORIGINAL ASSESSMENT ORDER CANNOT BE RAISED HERE DURING THE PROCEEDINGS CHALLE NGING THE ORDER U/S 263. IT WAS FURTHER SUBMITTED BY HIM THAT IN AN Y CASE, THE LD.CIT HAD PROPER JURISDICTION TO MAKE REVISION OF THE IMP UGNED ASSESSMENT ORDER. 7. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AND ALSO GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES AS WELL AS THE JUDGMENTS RELIED UPON BEFORE US. IN OUR VIEW, WE NE ED TO DECIDE FOLLOWING ISSUES, BEFORE WE GO INTO ANY OTHER ISSUE S OR MERITS OF THE IMPUGNED ORDER: 1. WHETHER THE ASSESSEE CAN CHALLENGE THE VALIDITY OF AN ASSESSMENT ORDER DURING THE APPELLATE PROCEEDINGS PERTAINING TO EXAMINATION OF VALIDITY OF ORDER PASS ED U/S 263? 2. WHETHER THE IMPUGNED ASSESSMENT ORDER PASSED U/S 143(3) DATED 24-10-2013 WAS VALID IN THE EYES OF LA W OR A NULLITY AS HAS BEEN CLAIMED BY THE ASSESSEE? 3. IF THE IMPUGNED ASSESSMENT ORDER PASSED U/S 143(3) WAS ILLEGAL OR NULLITY IN THE EYES OF LAW, THEN, WHETHER THE CIT H AD A VALID JURISDICTION TO PASS THE IMPUGNED ORDER U/S 263 TO REVISE THE NON EST ASSESSMENT ORDER? IN OUR CONSIDERED VIEW, SINCE THESE ISSUES ARE JURI SDICTIONAL ISSUES AND GO TO THE ROOT OF THE MATTER, THEREFORE BEFORE DEAL ING WITH ANY OTHER ISSUE, WE SHALL FIRST DEAL WITH ALL ABOVE THREE ISS UES ONE BY ONE, AS UNDER: 8. CHALLENGING THE JURISDICTIONAL DEFECTS OF ASSESS MENT ORDER FOR ASSAILING THE JURISDICTIONAL VALIDITY OF THE REVISI ON ORDER PASSED U/S 263: THE FIRST ISSUE THAT ARISES FOR OUR CONSIDERATION I S - WHETHER THE ASSESSEE CAN CHALLENGE THE JURISDICTIONAL VALID ITY OF ORDER PASSED U/S 143(3) IN THE APPELLATE PROCEEDINGS TAKEN UP FO R CHALLENGING THE ORDER PASSED U/S 263? IF WE ANALYSE THE NATURE OF B OTH OF THESE PROCEEDINGS, WHICH ARE UNDER CONSIDERATION BEFORE U S, WE FIND THAT THE ORIGINAL ASSESSMENT PROCEEDINGS CAN BE CLASSIFI ED IN A WAY AS 'PRIMARY PROCEEDINGS'. THESE ARE, IN EFFECT, BASIC / FOUNDATIONAL PROCEEDINGS AND AKIN TO A PLATFORM UPON WHICH ANY S UBSEQUENT PROCEEDINGS CONNECTED THEREWITH CAN REST UPON. THE PROCEEDINGS ITA NO.1612/MUM/2013 14 INITIATED U/S 263 SEEKING TO REVISE THE ORIGINAL AS SESSMENT ORDER IS OFF SHOOT OF THE PRIMARY PROCEEDINGS AND THEREFORE, THE SE MAY BE TERMED AS 'COLLATERAL PROCEEDINGS' IN THE LEGAL FRAMEWORK. THE ISSUE THAT ARISES HERE IS WHETHER ANY ILLEGALITY/INVALIDI TY IN THE ORDER PASSED IN THE 'PRIMARY PROCEEDINGS' CAN BE SET UP IN THE ' COLLATERAL PROCEEDINGS' AND IF YES, THEN OF WHAT NATURE? 8.1. WE HAVE ANALYSED THIS ISSUE CAREFULLY. THERE I S NO DOUBT THAT AFTER PASSING OF THE ORIGINAL ASSESSMENT ORDER, THE PRIMARY (I.E. ORIGINAL PROCEEDINGS) HAD COME TO AN END AND ATTAIN ED FINALITY AND, THEREFORE, OUTCOME OF THE SAME CANNOT BE DISTURBED, AND THEREFORE, THE ORIGINAL ASSESSMENT ORDER FRAMED TO CONCLUDE TH E PRIMARY PROCEEDINGS HAD ALSO ATTAINED FINALITY AND IT ALSO CANNOT BE DISTURBED AT THE INSTANCE OF THE ASSESSEE, EXCEPT AS PERMITTE D UNDER THE LAW AND BY FOLLOWING THE DUE PROCESS OF LAW. UNDER THES E CIRCUMSTANCES, IT CAN BE SAID THAT EFFECT OF THE ORIGINAL ASSESSME NT ORDER CANNOT BE ERASED OR MODIFIED SUBSEQUENTLY. IN OTHER WORDS, WH ATEVER TAX LIABILITY HAD BEEN DETERMINED IN THE ORIGINAL ASSES SMENT ORDER THAT HAD ALREADY BECOME FINAL AND THAT CANNOT BE SOUGHT TO BE DISTURBED BY THE ASSESSEE. BUT, THE ISSUE THAT ARISES HERE IS THAT IF THE ORIGINAL ASSESSMENT ORDER IS ILLEGAL IN TERMS OF ITS JURISDI CTION OR IF THE SAME IS NULL & VOID IN THE EYES OF LAW ON ANY JURISDICTIONA L GROUNDS, THEN, WHETHER IT CAN GIVE RISE TO INITIATION OF FURTHER P ROCEEDINGS AND WHETHER SUCH SUBSEQUENT PROCEEDINGS WOULD BE VALID UNDER THE LAW AS CONTAINED IN INCOME TAX ACT? IT HAS BEEN VEHEMEN TLY ARGUED BEFORE US THAT THE SUBSEQUENT PROCEEDINGS (I.E. COL LATERAL PROCEEDINGS) DERIVE STRENGTH ONLY FROM THE ORDER PA SSED IN THE ORIGINAL PROCEEDINGS (I.E. PRIMARY PROCEEDINGS). TH US, IF ORDER PASSED IN THE ORIGINAL PROCEEDINGS IS ITSELF ILLEGAL, THEN THAT CANNOT GIVE RISE TO VALID REVISION PROCEEDINGS. THEREFORE, AS PER LAW, THE VALIDITY OF THE ORDER PASSED IN THE PRIMARY (ORIGINAL) PROCEEDINGS SHOULD BE ALLOWED TO BE EXAMINED EVEN AT THE SUBSEQUENT STAGES, ONLY FOR THE LIMITED PURPOSE OF EXAMINING WHETHER THE COLLATERAL (SUBSEQ UENT) PROCEEDINGS HAVE BEEN INITIATED ON A VALID LEGAL PL ATFORM OR NOT AND FOR EXAMINING THE VALIDITY OF ASSUMPTION OF JURISDI CTION TO INITIATE THE COLLATERAL PROCEEDINGS. IF IT IS NOT SO ALLOWED, TH EN, IT MAY SO HAPPEN THAT THOUGH ORDER PASSED IN THE ORIGINAL PROCEEDING S WAS ILLEGAL AND THUS ORDER PASSED IN THE SUBSEQUENT PROCEEDINGS IN TURN WOULD ALSO BE ILLEGAL, BUT IN ABSENCE OF A REMEDY TO CONTEST T HE SAME, IT MAY GIVE RISE TO AN 'ENFORCEABLE' TAX LIABILITY WITHOUT AUTH ORITY OF LAW. THEREFORE, THE COURTS HAVE TAKEN THIS VIEW THAT JUR ISDICTIONAL ASPECTS OF THE ORDER PASSED IN THE PRIMARY PROCEEDI NGS CAN BE EXAMINED IN THE COLLATERAL PROCEEDINGS ALSO. THIS ISSUE IS NOT RES INTEGRA. THIS ISSUE HAS BEEN DECIDED IN MANY JUDGME NTS 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 SUPREM E COURT IN THE CASE OF KIRAN SINGH & ORS. V. CHAMAN PASWAN & ORS., [1955] 1 5CR 117 THE FACTS WERE THAT THE APPELLANT IN THAT CASE HAD UNDE RVALUED ITA NO.1612/MUM/2013 15 THE SUIT AT RS.2,950 AND LAID IT IN THE COURT OF TH E SUBORDINATE JUDGE, MONGHYR FOR RECOVERY OF POSSESSION OF THE SUIT LAND S AND MESNE PROFITS. THE SUIT WAS DISMISSED AND ON APPEAL IT WA S CONFIRMED. IN THE SECOND APPEAL IN THE HIGH COURT THE REGISTRY RAISED THE OBJECTION AS TO VALUATION UNDER SECTION 11. THE VALUE OF THE APP EAL WAS FIXED AT RS.9,980. A CONTENTION THEN WAS RAISED BY THE PLAIN TIFF 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 SUBOR DINATE JUDGE DID NOT LIE TO THE DISTRICT COURT, BUT TO THE HIGH COUR T AND ON THAT ACCOUNT THE DECREE OF THE DISTRICT COURT WAS A NULLITY. ALT ERNATIVELY, IT WAS CONTENDED THAT IT CAUSED PREJUDICE TO THE APPELLANT . IN CONSIDERING THAT CONTENTION AT PAGE 121, A FOUR JUDGE BENCH OF HON'BLE SUPREME COURT SPEAKING THROUGH VANKATARAMA AYYAR, J. HELD T HAT: IT IS A FUNDAMENTAL PRINCIPLE WELL-ESTABLISHED THA T A DECREE PASSED BY A COURT WITHOUT JURISDICTION IS A NULLITY , AND THAT ITS INVALIDITY COULD BE SET UP WHENEVER AND WHEREVER IT IS SOUGHT TO BE ENFORCED OR RELIED UPON, EVEN AT THE STAGE OF EXECUTION AND EVEN IN COLLATERAL PROCEEDINGS. A DEFECT OF JUR ISDICTION, WHETHER IT IS PECUNIARY OR TERRITORIAL, OR WHETHER IT IS IN RESPECT OF THE SUBJECT-MATTER OF THE ACTION, STRIKE S AT THE VERY AUTHORITY OF THE COURT TO PASS ANY DECREE AND SUCH A DEFECT CANNOT BE CURED EVEN BY CONSENT OF PARTIES.' 8.3. THIS JUDGMENT WAS SUBSEQUENTLY FOLLOWED BY HON 'BLE SUPREME COURT IN THE LANDMARK CASE OF SUSHIL KUMAR MEHTA VS GOBIND RAM BOHRA, (1990) 1 SCC 193 , WHEREIN AN ISSUE AROSE WHETHER A DECREE CAN BE CHALLENGED AT THE STAGE OF EXECUTION AND WHE THER A DECREE WHICH REMAINED UNCONTESTED OPERATES AS RES-JUDICATA QUA THE PARTIES AFFECTED BY IT. HON'BLE APEX COURT, TAKING SUPPORT FROM AFORESAID JUDGMENT, OBSERVED AS UNDER: 'IN THE LIGHT OF THIS POSITION IN LAW THE QUESTION FOR DETERMINATION IS WHETHER THE IMPUGNED DECREE OF THE CIVIL COURT CAN BE ASSAILED BY THE APPELLANT IN EXECUTION . IT IS ALREADY HELD THAT IT IS THE CONTROLLER UNDER THE AC T THAT HAS EXCLUSIVE JURISDICTION TO ORDER EJECTMENT OF A TENA NT FROM A BUILDING IN THE URBAN AREA LEASED OUT BY THE LANDLO RD. THEREBY THE CIVIL COURT INHERENTLY LACKS JURISDICTI ON TO ENTERTAIN THE SUIT AND PASS A DECREE OF EJECTMENT. THEREFORE, THOUGH THE DECREE WAS PASSED AND THE JURISDICTION O F THE COURT WAS GONE INTO IN ISSUE NOS. 4 AND 5 AT THE EX -PARTE TRIAL, THE DECREE THERE-UNDER IS A NULLITY, AND DOE S NOT BIND THE APPELLANT. THEREFORE, IT DOES NOT OPERATE AS A RES JUDICATA. THE COURTS BELOW HAVE COMMITTED GRAVE ERR OR OF LAW IN HOLDING THAT THE DECREE IN THE SUIT OPERATED AS RES JUDICATA AND THE APPELLANT CANNOT RAISE THE SAME PO INT ONCE AGAIN AT THE EXECUTION.' 8.4. SIMILAR VIEW HAS BEEN TAKEN BY HON'BLE SUPREME COU RT BY ITA NO.1612/MUM/2013 16 FOLLOWING AFORESAID JUDGMENTS RECENTLY IN THE CASE OF INDIAN BANK VS MANUAL GOVINDJI KHONA REPORTED IN 2015 (3) SCC 712 . FURTHER, SIMILAR VIEW WAS EMPHASIZED BY HON'BLE BOMBAY HIGH COURT (GOA BENCH) IN THE CASE OF MAVANY BROTHERS VS CIT (TAX APPEAL NO 8 OF 2007) IN ITS ORDER DT 17TH APRIL, 2015 WHEREIN IT WAS HELD THAT AN ISSUE OF JURISDICTION CAN BE RAISED AT ANY TIME EVEN IN APPE AL OR EXECUTION. 8.5. THE AFORESAID PRINCIPLES, ENUNCIATED BY THE APEX C OURT 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 DA SA MUNI REDDY V. APPA RAO (AIR 1974 SC 2089). IN THE FIRST OF THESE DECISIONS IT WAS POINTED OUT THAT REVENUE STATUTES PROTECT TH E 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, JURISDICTIO N 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 R ES LUDICATA CAN CONFER THE COURT JURISDICTION WHERE NONE EXISTS. HERE ALSO THE PRINCIPLE THAT WAS PUT INTO OPERATION WAS THAT JURI SDICTION CANNOT BE CONFERRED BY CONSENT OR AGREEMENT WHERE IT DID NOT EXIST, NOR CAN THE LACK OF JURISDICTION BE WAIVED. 8.6. THESE JUDGMENTS WERE SUBSEQUENTLY NOTICED BY HON'BLE GUJARAT HIGH COURT IN THE CASE OF P. V. DOSHI 113 ITR 22(GU JRAT) . THIS CASE AROSE UNDER THE INCOME TAX ACT WITH REFERENCE TO TH E PROVISIONS OF SECTION 147 DEALING WITH RE-ASSESSMENT. THE FACTS W ERE THAT THE ASSESSMENT WAS SOUGHT TO BE REOPENED UNDER SECTION 147 AND NOTICE UNDER SECTION 148 WAS ISSUED. VALIDITY OF REOPENING WAS NOT CHALLENGED UPTO TRIBUNAL AND ADDITIONS WERE CHALLEN GED ON MERITS ONLY. THE TRIBUNAL RESTORED THE MATTER TO THE ASSES SING OFFICER WITH SOME DIRECTIONS TO REEXAMINE THE ISSUE ON MERITS. W HEN THE MATTER CAME BACK TO THE ASSESSING OFFICER THE ASSESSEE SPE CIFICALLY RAISED THE POINT OF JURISDICTION TO REOPEN THE ASSESSMENT, CON TENDING THAT THE NOTICE OF REOPENING WAS PROMPTED BY A MERE CHANGE O F OPINION. THE AO REJECTED PLEA OF THE ASSESSEE BUT THE AAC ACCEPT ED THIS GROUND AND ALSO HELD THE REASSESSMENT TO BE BAD IN LAW ON JURISDICTIONAL GROUND. AGAINST THE ORDER OF THE AAC THE REVENUE WE NT IN APPEAL BEFORE THE TRIBUNAL AND SPECIFICALLY RAISED THE PLE A THAT THE QUESTION OF JURISDICTION TO REOPEN THE ASSESSMENT HAVING BEE N EXPRESSLY GIVEN UP BY THE ASSESSEE IN THE APPEAL AGAINST THE REASSE SSMENT ORDER IN THE FIRST ROUND, THE ASSESSEE WAS DEBARRED FROM RAI SING THAT POINT AGAIN BEFORE THE AAC AND THE AAC WAS EQUALLY WRONG IN PERMITTING THE ASSESSEE TO RAISE THAT POINT WHICH HAD BECOME F INAL IN THE FIRST ROUND AND IN ADJUDICATING UPON THE SAME. THE PLEA O F THE REVENUE IMPRESSED THE TRIBUNAL WHICH TOOK THE VIEW THAT AFT ER ITS EARLIER ORDER ITA NO.1612/MUM/2013 17 IN THE FIRST ROUND OF PROCEEDINGS THE MATTER ATTAIN ED FINALITY WITH REGARD TO THE POINT OF JURISDICTION WHICH WAS GIVEN UP BEFORE THE AAC AND NOT AGITATED FURTHER AND THAT IN THE REMAND PRO CEEDINGS WHAT WAS OPEN BEFORE THE ASSESSING OFFICER WAS ONLY THE QUESTION WHETHER THE ADDITION WAS JUSTIFIED ON MERITS AND THE POINT REGARDING THE JURISDICTIONAL ASPECT WAS NOT OPEN BEFORE THE ASSES SING OFFICER. ACCORDING TO THE TRIBUNAL, THE ASSESSEE HAVING RAIS ED THE POINT IN THE FIRST ROUND AND HAVING GIVEN IT UP COULD NOT REVIVE IT IN THE SECOND ROUND OF PROCEEDINGS WHERE THE ISSUE WAS LIMITED TO THE MERITS OF THE ADDITIONS. IN THIS VIEW, THE TRIBUNAL ACCEPTED THE REVENUES PLEA. THE ASSESSEE THEREAFTER CARRIED ORDER OF THE TRIBUNAL I N REFERENCE BEFORE THE GUJARAT HIGH COURT. THE HIGH COURT AFTER CONSID ERING VARIOUS JUDGMENTS OF THE SUPREME COURT ON THE POINT OF JURI SDICTION TO REOPEN THE ASSESSMENT AND ALSO AFTER SPECIFICALLY D ISCUSSING THE JUDGMENT OF THE SUPREME COURT IN ONKARMAL NATHMAL TRUST (SUPRA) AND DASA MUNI REDDY (SUPRA) HELD THAT THE TRIBUNAL WAS IN ERROR IN HOLDING THAT THE QUESTION OF JURISDICTION BECAME FI NAL 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 JUDICAT A CANNOT BE INVOKED WHERE THE QUESTION INVOLVED IS THE COMPETEN CE OF THE COURT TO ASSUME JURISDICTION, EITHER PECUNIARY OR TERRITO RIAL OR OVER THE SUBJECT MATTER OF THE DISPUTE. HON'BLE HIGH COURT FURTHER HELD THAT SINCE NEITHER CONSENT NOR WAIVER CAN CONFER JURISDI CTION UPON THE ASSESSING OFFICER WHERE IT DID NOT EXIST, NO IMPORT ANCE COULD BE ATTACHED TO THE FACT THAT THE ASSESSEE, IN THE FIRS T ROUND OF PROCEEDINGS, EXPRESSLY GAVE UP THE PLEA AGAINST THE ERRONEOUS ASSUMPTION OF JURISDICTION BY THE ASSESSING AUTHORI TY. ACCORDING TO THE HON'BLE COURT, THE 'FINALITY OR CONCLUSIVENESS COULD ONLY ARISE IN RESPECT OF ORDERS WHICH ARE COMPETENT ORDERS WITH J URISDICTION AND IF THE PROCEEDINGS OF REASSESSMENT ARE NOT VALIDLY INITIATED AT ALL, THE ORDER WOULD BE A VOID ORDER AS PER THE SETTLED LEGA L POSITION WHICH COULD NEVER HAVE ANY FINALITY OR CONCLUSIVENESS. IF THE ORIGINAL ORDER IS WITHOUT JURISDICTION, IT WOULD BE ONLY A NULLITY CONFIRMED IN FURTHER APPEALS'. IN THIS VIEW OF THE MATTER, HON'BLE HIGH COURT FIN ALLY ANSWERED THE REFERENCE IN FAVOUR OF THE ASSESSEE. 8.7. IT IS FURTHER NOTED THAT MANY OF THESE JUDGMENTS W ERE DISCUSSED AND FOLLOWED BY THE CO-ORDINATE BENCH OF THE TRIBUN AL IN THE CASE OF INDIAN FARMERS FERTILIZERS CO-OPERATIVE LTD VS KIT 105 LTD 33 (DEL) , WHEREIN A SIMILAR ISSUE HAD ARISEN. IN THIS CASE, T HE ISSUE RAISED BEFORE THE BENCH WAS WHETHER IT IS OPEN TO THE ASSESSEE, N OT HAVING APPEALED AGAINST THE REASSESSMENT ORDER, TO SET UP OR CANVASS ITS CORRECTNESS IN COLLATERAL PROCEEDINGS TAKEN FOR REC TIFICATION THEREOF U/S 154 . THE BENCH MINUTELY ANALYSED LAW IN THIS REGARD AN D APPLYING THE PRINCIPLE OF 'CORAM NON JUDICE' AND FOLLOWING AFORESAID JUDGMENTS OF THE SUPREME COURT, IT WAS HELD THAT IF AN ASSESSEE SEEKS TO CHALLENGE THE REASSESSMENT PROCEEDINGS AS BEING WIT HOUT JURISDICTION, WHEN ACTION FOR RECTIFICATION IS SOUG HT TO BE TAKEN ON ITA NO.1612/MUM/2013 18 THE ASSUMPTION OF THE VALIDITY OF THE REASSESSMENT ORDER, THEN THE ASSESSEE HAS TO STEP IN AND PROTECT ITS INTERESTS A ND THE LIBERTY TO QUESTION EVEN THE VALIDITY OF THE REASSESSMENT PROC EEDINGS OUGHT TO BE GIVEN TO IT.......' (EMPHASIS SUPPLIED) 8.8. SIMILAR VIEW WAS TAKEN IN ANOTHER DECISION OF THE TRIBUNAL IN THE CASE OF DHIRAJ SURI VS ACIT 98 LTD 87 (DEL) . IN THE SAID CASE, APPEAL WAS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL AGAIN ST THE LEVY OF PENALTY. IN THE APPEAL CHALLENGING THE PENALTY ORDE R, THE ASSESSEE CHALLENGED THE VALIDITY OF BLOCK ASSESSMENT ORDER W HICH HAD DETERMINED THE TAX LIABILITY OF THE ASSESSEE ON THE BASIS OF WHICH PENALTY WAS LEVIED SUBSEQUENTLY. THE REVENUE OBJECT ED WITH RESPECT TO THE GROUND OF THE ASSESSEE RAISING JURISDICTIONA L ISSUES OF ASSESSMENT PROCEEDINGS IN THE APPEAL AGAINST THE PE NALTY ORDER. AFTER ANALYSING THE LEGAL POSITION, AS CLARIFIED BY HON'B LE GUJRAT HIGH COURT IN THE CASE OF P.V. DOSHI, SUPRA AND HON'BLE BOMBAY HIGH COURT IN THE CASE OF JAINARAVAN BABULAL VS CIT. 170 ITR 399 , THE BENCH HELD AS THAT IF THE BLOCK ASSESSMENT ITSELF IS WITHOUT JURISDICT ION 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 V ALIDITY OF THE ASSESSMENT IN THE APPEAL AGAINST THE LEVY OF PENALT Y. 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 A O TO INITIATE RE- ASSESSMENT PROCEEDINGS BEFORE THE CIT(A) IN THE SEC OND ROUND OF PROCEEDINGS, EVEN THOUGH HE HAD NOT RAISED IT IN EA RLIER PROCEEDINGS BEFORE THE ASSESSING OFFICER OR IN THE EARLIER APPE AL. 8.10. THUS, ON THE BASIS OF AFORESAID DISCUSSION WE CAN SAFELY HOLD THAT AS PER LAW, THE ASSESSEE SHOULD BE PERMITTED T O CHALLENGE THE VALIDITY OF ORDER PASSED U/S 263 ON THE GROUND THAT THE IMPUGNED ASSESSMENT ORDER WAS NON EST AND WE HOLD ACCORDINGL Y. THE TRIBUNAL FURTHER IN PARA 10 & 11 OF THE ORDER H AS OBSERVED AS UNDER: 10. IF THE IMPUGNED ASSESSMENT ORDER PASSED U/S 14 3(3) WAS ILLEGAL OR NULLITY IN THE EYES OF LAW, THEN, WHETHER THE CIT HAD A VALID JURISDICTION TO PASS THE IM P U G NED ORDER U/S 263 TO REVISE THE NON EST ASSESSMENT ORDER: HAVING DECIDED THE AFORESAID TWO ISSUES, THE NEXT ISSUE THAT IS TO BE DECIDED BY US IS ABOUT THE VALIDITY OF ORDER PASSED U/S 263 BY THE LD. CIT SEEKING TO REVISE THE ASSESSMENT ORDER WHICH WAS NU LLITY IN THE EYES OF LAW. 10.1. WE HAVE DISCUSSED IN DETAIL IN EARLIER PART OF OUR ORDER THAT AN INVALID ORDER CANNOT GIVE BIRTH TO LE GALLY VALID ITA NO.1612/MUM/2013 19 PROCEEDINGS. IT IS FURTHER NOTICED BY US THAT SOME OF THE JUDGMENTS RELIED UPON BY THE LD. COUNSEL HAVE ALREA DY ADDRESSED THIS ISSUE. THIS ISSUE HAS ALSO BEEN DECIDED BY THE CO-ORDINATE BENCH (DELHI BENCH OF TRIBUNAL) IN THE CASE OF KRISHNA KUMAR SARAF VS CIT (SUPRA). THE RELEVANT PART OF THE ORDER IS REPRODUCED BELOW: '17. THERE IS NO QUARREL WITH THE PROPOSITION ADVAN CED BY ID. DR THAT THE PROCEEDINGS U/S 263 ARE FOR THE BENEFIT OF REVENUE AND NOT FOR ASSESSEE. 18. HOWEVER, U/S 263 THE ID. COMMISSIONER CANNOT RE VISE A NON EST ORDER IN THE EYE OF LAW. SINCE THE ASSESSME NT ORDER WAS PASSED IN PURSUANCE TO THE NOTICE U/S 143(2), W HICH WAS BEYOND TIME, THEREFORE, THE ASSESSMENT ORDER PASSED IN PURSUANCE TO THE BARRED NOTICE HAD NO LEGS TO STAND AS THE SOME WAS NON EST IN THE EYES OF LAW. ALL PROCEEDING S SUBSEQUENT TO THE SAID NOTICE ARE OF NO CONSEQUENCE . FURTHER, THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CA SE OF CIT VS. GITSONS ENGINEERING CO. 370 ITR 87 (MAD) CLEARL Y HOLDS THAT THE OBJECTION IN RELATION TO NON SERVICE OF NOTICE COULD BE RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL AS TH E SOME WAS LEGAL, WHICH WENT TO THE ROOT OF THE MATTER. 19. WHILE EXERCISING POWERS U/S 263 ID. COMMISSIONE R CANNOT REVISE AN ASSESSMENT ORDER WHICH IS NON EST IN THE EYE OF LAW BECAUSE IT WOULD PREJUDICE THE RIGHT OF ASSESSEE WH ICH HAS ACCRUED IN FAVOUR OF ASSESSEE ON ACCOUNT OF ITS INC OME BEING DETERMINED. IF ID. COMMISSIONER REVISES SUCH AN ASSESSMENT ORDER, THEN IT WOULD IMPLY EXTENDING/ GRANTING FRES H LIMITATION FOR PASSING FRESH ASSESSMENT ORDER. IT IS SETTLED L AW THAT BY THE ACTION OF THE AUTHORITIES THE LIMITATION CANNOT BE EXTENDED, BECAUSE THE PROVISIONS OF LIMITATION ARE PROVIDED I N THE SAME. 20. IN VIEW OF ABOVE DISCUSSION, GROUND NO.3 IS ALLOWED AND REVISION ORDER PASSED U/S 263 IS QUASHE D.' 10.2 . IT IS FURTHER NOTICED BY US THAT SIMILAR VIEW HAS BEEN TAKEN BY CHANDIGARH BENCH OF THE TRIBUNAL IN THE CA SE OF STEEL STRIPS LTD (SUPRA) . 11. THUS, AFTER TAKING INTO ACCOUNT ALL THE FACTS A ND CIRCUMSTANCES OF THE CASE, WE FIND THAT IN THIS CAS E, THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) DT 24-1 0-2013 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 IMP UGNED ORDER PASSED U/S 263 BY THE LD.CIT IS ALSO NULLITY IN THE EYES OF LAW AND THEREFORE THE SAME IS HEREBY QUASHED. 12. A PERUSAL OF THE ABOVE ORDER REVEALS THAT V ARIOUS COURTS OF LAW INCLUDING THE HONBLE SUPREME COURT HAS HELD THAT A DEFECT OF ITA NO.1612/MUM/2013 20 JURISDICTION WHETHER ITS PECUNIARY OR TERRITORIAL O R WHETHER IT IS A SUBJECT- MATTER OF THE ACTION, STRIKES AT THE VERY VALIDITY OF THE COURT TO PASS ANY DECREE AND SUCH A DEFECT CANNOT BE CURED E VEN BY CONSENT OF THE PARTIES. THAT A DECREE PASSED BY A COURT WITHOU T JURISDICTION IS A NULLITY AND THAT ITS INVALIDITY CAN BE SET UP WHENE VER AND WHEREVER IT IS SOUGHT TO BE ENFORCED OR RELIED UPON, EVEN AT TH E STAGE OF EXECUTION AND EVEN IN COLLATERAL PROCEEDINGS. THAT THE ISSUE OF JURISDICTION CAN BE RAISED AT ANY STAGE EVEN IN APPELLATE OR EXECUTI ON STAGE. NEITHER THE RULE OF ESTOPPELS NOR THE PRINCIPLE OF RES-JUDICATA CAN CONFER THE JURISDICTION WHERE NONE EXISTS. THE FACTS IN THE CA SE OF P. B. DOSHI (SUPRA) ARE VERY MUCH RELEVANT WHEREIN RE-ASSESSMEN T PROCEEDINGS WERE INITIATED AGAINST ASSESSEE AND AN ADDITION WAS MADE TO HIS INCOME. BEFORE AAC, CONTENTION ABOUT VALIDITY OF NO TICE FOR RE- ASSESSMENT WAS GIVEN UP BY THE ASSESSEE AND ON MERI TS APPEAL WAS DISMISSED. ON FURTHER APPEAL, TRIBUNAL REMANDED MA TTER TO FILE OF ITO WITH DIRECTION TO ON RE-EXAMINE WITNESS AND THEN CO MPLETE ASSESSMENT. ITO ON REMAND COMPLETED ASSESSMENT AND AGAIN MADE ADDITION. ON APPEAL, ASSESSEE RE-AGITATED POINT OF VALIDITY OF RE- ASSESSMENT PROCEEDINGS ON GROUND THAT THERE WAS MER E CHANGE OF OPINION. AAC FOUND THAT NO REASONS WERE RECORDED B Y ITO BEFORE ISSUING NOTICE FOR RE-ASSESSMENT AND, THEREFORE, HE LD THAT ITO HAD NO JURISDICTION TO RE-OPEN ASSESSMENT. TRIBUNAL HELD T HAT IN RESTORING CASE TO FILE OF ITO BY EARLIER ORDER, ONLY POINT LEFT OP EN WAS IN RESPECT OF ADDITION OF ON MERITS AND THAT LEGAL OR JURISDICTIO NAL ASPECT WHETHER RE- ASSESSMENT PROCEEDINGS WERE LEGALLY INITIATED WAS N OT KEPT OPEN; IT ALSO HELD THAT EVEN THOUGH THIS POINT WENT TO ROOT OF JURISDICTION AND WAS PURE QUESTION OF LAW, MERELY BECAUSE POINT WAS INITIALLY RAISED AND NOT PRESSED WHEN MATTER WAS TAKEN UP BEFORE AAC , IT COULD BE WAIVED AND IT COULD NOT BE REAGITATED ; THE THE HON BLE GUJARAT HIGH COURT REVERSING THE ORDER OF THE TRIBUNAL HELD THAT IF THE JURISDICTION ITA NO.1612/MUM/2013 21 CANNOT BE CONFERRED BY CONSENT, THERE WOULD BE NO Q UESTION OF WAIVER, ACQUIESCENCE OR ESTOPPEL OR THE BAR OF RES JUDICATA BEING ATTRACTED BECAUSE THE ORDER IN SUCH CASES WOULD LACK INHERENT JURISDICTION UNLESS THE CONDITIONS PRECEDENT ARE FULFILLED AND IT WOULD BE A VOID ORDER OR A NULLITY. THE ABOVE DECISION OF THE HONBLE GUJRAT H IGH COURT HAS ALSO BEEN FOLLOWED BY THE CO-ORDINATE BENCH OF THE TRIBU NAL IN THE CASE OF INDIAN FARMERS FERTILIZERS CO-OPERATIVE LTD VS KIT ( SUPRA) AS DISCUSSED ABOVE. EVEN, THE TRIBUNAL IN THE CASE OR DHIRAJ SURI ( SUPRA) IN AN APPEAL AGAINST THE PENALTY ORDER HAS HELD THAT IF THE ASSE SSMENT ORDER WAS WITHOUT JURISDICTION, THERE WAS NO QUESTION OF LEVY OF PENALTY, THEREFORE, IT WAS OPEN TO THE ASSESSEE TO SET UP TH E QUESTION OF VALIDITY OF THE ASSESSMENT IN THE APPEAL AGAINST LEVY OF PEN ALTY. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF INVESTORS INDUSTRI AL CORPORATION (SUPRA) HAS HELD THAT THE ASSESSEE WAS ENTITLED TO CHALLENGE THE JURISDICTION OF THE AO TO INITIATE REOPENING OF ASS ESSMENT PROCEEDINGS BEFORE THE CIT (A) IN THE SECOND ROUND OF PROCEEDIN GS EVEN THOUGH IT HAS NOT RAISED THE SAME BEFORE EARLIER PROCEEDINGS BEFORE THE AO OR IN THE EARLIER APPEAL. 13. IN THE LIGHT OF VARIOUS CASE LAWS AS CITED ABOVE, THE PROPOSITION THAT IS COMING OUT IS THAT THE JURISDICTION OR THE LEGALITY OF THE PROCEEDINGS CAN BE AGITATED IN A SUBSEQUENT PROCEED INGS OR EVEN IN A COLLATERAL PROCEEDINGS OR AN EXECUTION PROCEEDINGS ALSO. IF, THE ORIGINAL ORDER IS ILLEGAL OR WITHOUT JURISDICTION, THE SUBSEQUENT OR COLLATERAL PROCEEDINGS ARISEN OUT OF SUCH ORDERS OR PROCEEDINGS, CANNOT BE HELD TO BE VALID. 14. COMING TO THE FACTS OF THE PRESENT CASE, TH E ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT HAD ALREADY BEEN COMPLETED AND ATTAINED FINALITY. AT THE TIME OF SEARCH, THE REOPE NED ASSESSMENT ITA NO.1612/MUM/2013 22 PROCEEDINGS U/S 147 OF THE ACT WERE PENDING. SO, WH AT WERE ABATED DUE TO THE SEARCH ACTION WERE THE REASSESSMENT PROC EEDINGS U/S 147 OF THE ACT (IN WHICH THE ISSUE OF SECTION 80IB DEDUCTI ON ON DEPB RECEIPT WAS PENDING) AND NOT THE ORIGINAL ASSESSMEN T PROCEEDINGS U/S 143(3) OF THE ACT. NOW, SUBSEQUENT TO THE SEARCH AC TION, THE FRESH ASSESSMENT ORDER WAS PASSED BY THE AO U/S 153A OF T HE ACT. IN THIS ASSESSMENT ORDER THE AO DID NOT CONSIDER THE ISSUE RELATING TO THE CLAIM OF DEDUCTION IN RELATION TO DEPB RECEIPTS. A DMITTEDLY, NO INCRIMINATING MATERIAL DURING THE SEARCH ACTION WAS FOUND IN RELATION TO ANY OF THE ISSUE AND NO ADDITIONS WERE MADE. UN DER THE CIRCUMSTANCES, THE LEARNED CIT INVOKED HIS REVISION JURISDICTION U/S 263 OF THE ACT AND DIRECTED THE AO TO CONSIDER THE ISSUES WHICH WERE PENDING IN THE REASSESSMENT PROCEEDINGS REGARDING T HE ALLOWANCE OF DEDUCTION OF DEPB RECEIPTS. CLEARLY, INDEPENDENT O F THE REASSESSMENT PROCEEDINGS UNDER SECTION 147, THE AO COULD NOT HAV E CONSIDERED THE ISSUE OF THE CLAIM OF SECTION 80IB ON DEPB RECEIPTS IN THE SECTION 153A PROCEEDINGS AS NO INCRIMINATING MATERIAL WAS F OUND IN THE SEARCH ON THIS ISSUE. NOW, THE QUESTION ARISES WHETHER THE ASSESSEE HAS A RIGHT TO AGITATE THE VERY VALIDITY OF THAT REOPENING OF ASSESSMENT/S 147 , WHICH STOOD ABATED, IN THE FRESH ASSESSMENT PROCEEDINGS U/S 15 3A CARRIED OUT BY THE AO PURSUANT TO THE DIRECTION GIVEN BY THE CIT V IDE HIS REVISION ORDER PASSED U/S 263 OF THE ACT. AS OBSERVED ABOVE, THE VARIOUS HIGH COURTS INCLUDING THE APEX COURT OF THE COUNTRY HAVE HELD THAT JURISDICTIONAL ASPECT OF THE PRIMARY PROCEEDINGS CA N ALWAYS BE AGITATED BY THE ASSESSEE IN THE SUBSEQUENT PROCEEDI NGS. THE FRESH ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT CARRIED OUT PURSUANT TO THE SEARCH ACTION WERE THE OFF SHOOT OF THE SEARCH ACTION U/S 132 OF THE ACT. HOWEVER, THE VARIOUS COURTS OF LAW ON THIS ISS UE HAVE HELD THAT IN THE CASE OF CONCLUDED ASSESSMENT PROCEEDINGS, TH E AO CANNOT RAISE ITA NO.1612/MUM/2013 23 OR TAKE INTO CONSIDERATION THE ISSUE FOR THE PURPOS E OF ADDITION DURING THE ASSESSMENT PROCEEDINGS U/S 153A WHICH HAS ALREA DY BEEN CONCLUDED OR DECIDED IN THE ORIGINAL ASSESSMENT PRO CEEDINGS AND THAT ADDITION CANNOT BE MADE ON ANY OTHER ISSUE IF NO IN CRIMINATING MATERIAL IS FOUND DURING SEARCH ACTION. THE AO CANN OT DISTURB THE ASSESSMENT ORDER OR REASSESSMENT ORDER WHICH HAS AT TAINED FINALITY, UNLESS THE MATERIAL GATHERED IN THE COURSE OF PROCE EDINGS U/S 153A OF THE ACT ESTABLISHES THAT RELIEF GRANTED UNDER THE F INAL ASSESSMENT/REASSESSMENT WAS CONTRARY TO THE FACT U NEARTHED DURING THE COURSE OF 153A PROCEEDINGS. RELIANCE CAN BE PLA CED IN THIS RESPECT ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT I N THE CASE OF ALL CARGO GLOBAL LOGISTICS (SUPRA) AND CONTINENTAL WARE HOUSING CORPORATION (SUPRA). IDENTICAL VIEW HAS BEEN TAKEN BY THE JURISDICTIONAL HONBLE BOMBAY HIGH COURT IN THE CAS E OF CIT VS. MURLI AGRO PRODUCTS LTD. ITA NO.36 OF 2009 DECIDED VIDE ORDER DATED 29-10-2010. 15. NOW, COMING TO THE FACTS OF THE CASE, WE FIND THAT THE AO COULD HAVE MADE THE ADDITION IN THE PROCEEDINGS U/S 147 O F THE ACT IN RELATION TO THE DEPB RECEIPTS IF THE SAID REASSESSM ENT PROCEEDINGS U/S 147 OF THE ACT WERE HELD TO BE VALID. IF, THE SAID PROCEEDINGS WERE HELD TO BE INVALID, ILLEGAL OR WITHOUT JURISDICTION , THEN THE AO COULD NOT HAVE MADE ANY ADDITION IN RELATION TO DEPB RECE IPTS. HOWEVER, AS OBSERVED, THE SAID REOPENED ASSESSMENT PROCEEDINGS ABATED WITHOUT DECISION ON THE QUESTION OF THE VALIDITY OF INITIAT ION OF REOPENING OF THE SAID ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT. THE LEARNED CIT UNDER HIS REVISION JURISDICTION U/S 263 OF THE ACT HAS DIRECTED THE AO TO CONSIDER THE ADDITION IN RESPECT OF DEPB RECEIPT S, THE ISSUE WHICH WAS UNDER CONSIDERATION IN THE RE-ASSESSMENT PROCEE DINGS. AS HELD BY VARIOUS HIGHER COURTS THAT IF THE INITIATION OF THE PROCEEDINGS ARE HELD TO BE WITHOUT JURISDICTION, THEN, SUBSEQUENTLY NO A DDITION CAN BE MADE ITA NO.1612/MUM/2013 24 EVEN IN THE COLLATERAL PROCEEDINGS. IN VIEW OF THE ABOVE, IF THE ASSESSEE PROVES THAT THE VERY INITIATION OF THE REO PENING OF THE ASSESSMENT U/S 147 OF THE ACT WAS INVALID OR BAD IN LAW, THEN, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH ACTION, THE AO COULD NOT HAVE JURISDICTION TO CONSIDER OR M AKE ADDITION IN RESPECT OF DEPB RECEIPTS DURING THE FRESH ASSESSMEN T PROCEEDINGS U/S 153A DONE IN PURSUANCE TO THE DIRECTION OF THE CIT GIVEN U/S 263 OF THE ACT. THE PRINCIPLE BEHIND THAT IS IF, THE VERY REOPENING OF THE ASSESSMENT IS TREATED AS INVALID OR WITHOUT JURISDI CTION THEN, IN SUCH CIRCUMSTANCES, THE ORIGINAL ASSESSMENT PROCEEDINGS U/S 143 (3) OF THE ACT WILL BE DEEMED TO BE CONCLUDED PROCEEDINGS. WHE N THE REOPENED PROCEEDINGS U/S 147 OF THE ACT BEING NULLITY OR VOI D AB-INITIO WILL NOT BE CONSIDERED AS EXISTING AND WILL BE TREATED AS NO N-EST, THEN, IN SUCH CIRCUMSTANCES, IN THE ASSESSMENT PROCEEDINGS U/S 15 3A OF THE ACT, THE AO IS PRECLUDED FROM MAKING ANY ADDITION IN RESPECT OF ANY ISSUE WHICH HAS ALREADY ATTAINED FINALITY DURING THE ORIG INAL ASSESSMENT PROCEEDINGS, AND FOR WHICH NO INCRIMINATING MATERIA L HAS BEEN FOUND DURING SEARCH ACTION, AS HAS BEEN HELD BY VARIOUS C OURTS OF LAW AS DISCUSSED ABOVE. THE ASSESSEE, THUS, IN THIS REGARD HAS RIGHTLY AGITATED THE JURISDICTION ISSUE REGARDING VALIDITY OF INITIA TION OF REASSESSMENT PROCEEDINGS U/S 147 DURING THE FRESH ASSESSMENT PRO CEEDINGS U/S 153A OF THE ACT CARRIED OUT BY THE AO PURSUANT TO THE DI RECTION OF THE LEARNED CIT GIVEN VIDE HIS ORDER PASSED U/S 263 OF THE ACT. SINCE, THE VERY VALIDITY OF REOPENING OF THE ASSESSMENT PROCEE DINGS STRIKES TO THE VERY BASE OF SUCH ADDITION, THE LEARNED CIT(A) WAS SUPPOSED TO DECIDE THE SAME. ADMITTEDLY, THE AO HAD REJECTED TH E OBJECTIONS OF THE ASSESSEE REGARDING THE VALIDITY OF THE REASSESS MENT PROCEEDINGS U/S 147 OF THE ACT DURING THE FRESH ASSESSMENT PROCEEDI NGS U/S 153A OF THE ACT. THE ASSESSEE HAS RAISED THIS GROUND BEFORE THE LEARNED CIT (A), WHO HAS DISMISSED THE SAID GROUND HOLDING THAT THE SAME CANNOT ITA NO.1612/MUM/2013 25 BE TAKEN BY THE ASSESSEE AT THIS STAGE. THE LEARNED CIT (A) THUS HAS WRONGLY TAKEN A VIEW THAT THE ASSESSEE WAS ESTOPPED AT THIS STAGE TO RAISE THIS ISSUE AS HE HAS NOT FILED ANY APPEAL AGA INST THE ORDER OF THE CIT PASSED U/S 263 OF THE ACT. AS DISCUSSED ABOVE, SUCH FINDING OF THE LEARNED CIT (A) IS NOT SUSTAINABLE IN THE EYES OF LAW. HENCE, WE DIRECT THE LEARNED CIT (A) TO CONSIDER THE ISSUE OF THE VALIDITY OF THE JURISDICTION U/S 147 OF THE ACT RAISED BY THE ASSES SEE AND DECIDE THE SAME AFRESH. NEEDLESS TO SAY THAT SINCE IT IS A LEG AL ISSUE THE ASSESSEE WILL BE AT LIBERTY TO CHALLENGE ALL ASPECTS REGARDI NG VALIDITY AND LEGALITY OF THE PROCEEDINGS U/S 147 OF THE ACT. THE LEARNED CIT (A) WILL CONSIDER THE SAME AND DECIDE THE SAID ISSUE AS PER LAW. IF, THE VERY VALIDITY OF THE REASSESSMENT PROCEEDINGS U/S 1 47 OF THE ACT IS HELD TO BE WITHOUT JURISDICTION, THEN THE ORIGINAL ASSESSMENT PROCEEDINGS WILL BE DEEMED TO BE CONCLUDED AND ATTA INED FINALITY. THE SUBSEQUENT REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT THUS, IF, BEING HELD AS NON-EST OR VOID ABINITIO , THE AO WILL HAVE NO JURISDICTION IN THE FRESH ASSESSMENT PROCEEDINGS U/S 153A TO MAKE A NY ADDITION IN RESPECT OF ISSUES ALREADY CONCLUDED IN ORIGINAL ASS ESSMENT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF ACTION. WITH THE ABOVE OBSERVATION THE APPEAL OF TH E ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 JULY, 2016 SD/- SD/- (G. S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 27 JULY, 2016 LAKSHMIKANTA DEKA/SR.PS ITA NO.1612/MUM/2013 26 COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//