Income Tax Appellate Tribunal - Hyderabad
Late Etti Sriramulu Reddy L/R By ... vs Income Tax Officer, Ward-1(2), ... on 30 September, 2021
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "B": HYDERABAD
(THROUGH VIRTUAL CONFERENCE)
BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER &
SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
ITA No. 761/Hyd/2019
Assessment Year: 2008-09
Late Etti Sriramulu Vs. Income Tax Officer
Reddy L/R by Ward 1(2)
Smt.B.Vani and Tirupathi
Smt.M. Vijaya
Lakshmi
Tirupathi
[PAN: AADPE6367R]
(Appellant) (Respondent)
Assessee by: Sri E. Phalguna Kumar
Revenue by: Shri D.J. Prabhakar Anand,
DR
Date of hearing: 13/09/2021
Date of pronouncement: 30/09/2021
O R D E R
PER S.S. GODARA, J.M.:
This asessee's appeal is directed against the CIT(A), Tirupathi's order dated 23/04/2019 in case no. 10199/2017- 18/CIT(A)/TPT involving proceedings u/s 143(3) r.w.s. 263 of the Income Tax Act, 1961 [in short "the Act"].
Heard both the parties. Case file perused.
It transpires during the course of hearing that the assessee's sole substantive grievance raised in the instant lis seeks to reverse both the lower authorities' action making unexplained investment addition of Rs. 2,01,98,400/- in the course of sec 143(3) r.w.s. 263 proceedings.
ITA No. 761/H/19 AY 2008-09[Late Etti Sriramulu Reddy] L/R by : Smt B Vani and Smt M Vijaya Lakshmi A few facts going to the root of the matter are noticed.
2. Case file suggests that the Assessing Officer had framed sec. 143(3) r.w.s. 147 assessment on 31.3.2016 which stood revised by the Pr.CIT in his order dated 9.3.2017 as an erroneous one causing prejudice to the interest of Revenue. It is in the instant round of consequential proceedings that both the lower authorities have made unexplained investment addition in assessee's hands.
3. Now comes the crux of the legal issue regarding validity of sec. 143(3) rws 147 assessment framed in assessee's case. The Revenue's vehement stand before us is that mere non-issuance of sec. 143(2) notice therein after filing of return assessee's return ought not form the subject matter before us in the instant consequential proceedings. We find no merit in Revenue's instant argument in light of Kiran Singh and others vs. Chaman Pawan AIR 1954 SC 340 wherein their lordships held that a decree by the court having no jurisdiction is a nullity which could be challenged in execution proceedings. Case law Deepchand Kothari vs CIT (1988) 179 ITR 381 (Raj.) holds that the very reasoning applies in income tax proceedings as well. Coupled with this, this Tribunal's coordinate bench in M/s Classic Flour and Food Processing Private Ltd. Vs. CIT in ITA 764 to 767/Kol/2017 holds that an assessment is primary and sec. 263 revision is in the nature of collateral proceedings wherein the former's validity could always be challenged in latter round. We also deem it appropriate to quote PV Doshi vs CIT (1978) 113 ITR 221 (Guj.) that no waiver applies in case of a pure legal issue going to the root of the matter.
4. We take into account the foregoing legal proposition and notice that the Assessing officer's re-assessment herein dated 31.03.2015 had been framed without issuing any notice u/s 143(2) of the Act despite the fact that the assessee's corresponding return filed in response to sec.148 notice had been treated as a valid one. We thus quote case law ACIT vs Hotel Blue Moon 2 ITA No. 761/H/19 AY 2008-09 [Late Etti Sriramulu Reddy] L/R by : Smt B Vani and Smt M Vijaya Lakshmi (2010) 321 ITR 362 (SC) that an assessment framed in absence of sec.143(2) notice is a nullity and adopt the same reasoning herein as well to treat the impugned re-assessment dated 31.03.2015 as not sustainable in law. The same stands quashed to the limited extent of correctness of the impugned proceedings arising under sec. 263 revision directions which also follow the suit. It is made clear that as a matter of adequate caution that any addition or disallowance made in the said assessment dated 31.03.2015 shall continue to hold good. All other pleadings on merits are renderred infructuous since we have quashed the impugned proceedings in above terms.
This assessee's appeal is allowed in above terms.
Order pronounced in the open court on 30th September, 2021.
Sd/- Sd/-
(L.P. SAHU) (S.S. GODARA)
Accountant Member Judicial Member
Hyderabad, Dt. 30.09.2021.
*gmv
Copy to :
1. Late Sri Etti Sriramulu Reddy, Represented by L/Rs : Smt. B. Vani and Smt. M. Vijaya Lakshmi Door no. 9-52, Damineedu (V), Tiruchanoor Post, Tirupati
2. I T O, Ward 1(2), Tirupathi, A.P.
3. JCIT, Range - 1, Tirupathi .
4. CIT(A), Tirupathi.
5. Pr.CIT, Tirupathi.
6. Chief CITT, Vijayawada
7. DR, ITAT, Hyderabad.
8. Guard File.
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