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When assessment by Addl CIT as AO in absence of valid order u/s 120(4)(b) is quashed on legal issue, Tribunal's comment on invocation of powers u/s 263 is not necessary: ITAT

By TIOL News Service

MUMBAI, DEC 07, 2017: THE issue before the Bench is - Whether when the assessment order passed by the Addl CIT as AO in the absence of a valid order u/s 120(4)(b) is found to be without jurisdiction, then there is any need for the Tribunal to comment on the invocation of powers u/s 263. And the ITAT verdict is NO.

Facts of the case

The Assessee, a holding company of the Tata Group, preferred an appeal challenging the order passed by the CIT u/s 263.

Having heard the parties, the Tribunal held that,

++ the Supreme Court in the case of Shelly Products & Another clearly held that taxes paid by the Assessee on the returned income cannot be refunded. We, therefore, following the principle of judicial discipline hold that in the facts of the present case, the Additional CIT in the absence of a valid order u/s 120(4)(b) has well as section 127(1) would not have exercised power of a AO to pass the said assessment order. Accordingly, the same was passed is without jurisdiction would have no show and, therefore, quash the same;

++ the CIT has invoked his jurisdiction u/s 263 in respect of the order passed u/s 154 with respect to the assessment completed u/s 143(3) on 15.03.2005. We have already quashed the order passed by the AO u/s 143(3) therefore, the order passed by the AO u/s 154 with reference to the assessment order passed u/s 143(3) has also become infructuous and in consequence thereof the order passed by the CIT by invoking jurisdiction u/s 263 has become invalid. We, accordingly, quash the order passed u/s 263.

(See 2017-TIOL-1682-ITAT-MUM)


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