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Teena Gupta vs. CIT (Allahabad High Court)
April, 12th 2017

A question relating to jurisdiction which goes to the root of the matter can always be raised at any stage. Issues relating to initiation of s. 147 proceedings and/or service of notice are questions relating to assumption of jurisdiction. If an issue has not been decided in appeal and has simply been remanded, the same can be raised again notwithstanding with the fact that no further appeal has been preferred (Sun Engineering Works 198 ITR 297 (SC) explained)

(a) From the aforesaid decisions, it follows that

(i) a question relating to jurisdiction which goes to the root of the matter can always be raised at any stage, be in appeal or revision,

(ii) initiation of proceedings under section 147 of the Act and/or service of notice are all questions relating to assumption of jurisdiction to assess escaped income,

(iii) if an issue has not been decided in appeal and the matter has simply been remanded, the same can be raised again notwithstanding with the fact that no further appeal has been preferred,

(iv) in the reassessment proceedings, relief in respect of item which was not originally claimed can not be claimed again as the reassessment proceedings are for the benefit of the Revenue and

(v) relief can only be claimed in respect of the escaped income.

(b) Applying the principles laid down in the aforesaid cases to the facts of the present case, we find that in the first round of proceedings before the Commissioner of Income Tax (Appeals), the appellant had specifically questioned the validity of the proceedings initiated under section 148 of the Act. That issue was not decided by the Commissioner (Appeals) who had remanded the matter for fresh assessment after providing opportunity of hearing. The question relating to the jurisdiction assumed under section 147/148 of the Act goes to the very root of the matter and it can be raised in appeal for the first time. The appellant had raised this question again in appeal and, therefore, it was incumbent upon the Commissioner of Income Tax (Appeals) to adjudicate upon the grounds taken before him. In fact, he had casually observed that the proceedings under section 148 of the Act had been validly initiated but, wrongly applied the principles laid down by the Apex Court in the case of Sun Engineering Works P. Ltd. [1992] 198 ITR 297 (SC).

(c) The principles laid down by the Apex Court in the case of Sun Engineering Works P. Ltd. (supra) would not apply as the appellant is not claiming any deduction or relief on the taxibility of any item in the reopened assessment proceedings which had not been claimed in the original assessment.

 

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