ACIT,, Chandigarh v. M/s Steel Strips Wheels Ltd.,, Chandigarh

ITA 773/CHANDI/2009 | 2006-2007
Pronouncement Date: 30-04-2010 | Result: Partly Allowed

Appeal Details

RSA Number 77321514 RSA 2009
Bench Chandigarh
Appeal Number ITA 773/CHANDI/2009
Duration Of Justice 9 month(s) 9 day(s)
Appellant ACIT,, Chandigarh
Respondent M/s Steel Strips Wheels Ltd.,, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 30-04-2010
Date Of Final Hearing 13-04-2010
Next Hearing Date 13-04-2010
Assessment Year 2006-2007
Appeal Filed On 21-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH (B) BEFORE SHRI G.S.PANNU ACCOUNTANT MEMBER AND MS.SUSHMA CHOWLA JUDICIAL MEMBER ITA NO.773/CHANDI/2009 ASSESSMENT YEAR 2006-07 A.C.I.T. C-5(1) V M/S STEEL STRIPS WHEELS LT D. CHANDIGARH. CHANDIGARH. PAN : AACCS-3003L & C.O. 55/CHD/2009 IN ITA NO. 773/CHD/2009 M/S STEEL STRIPS WHEELS LTD. V ACIT C-5(1) CHANDIGARH. CHANDIGARH. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI UMESH CHANDRA RESPONDENT BY: SHRI RAJESH GARG ORDER PER G.S.PANNU AM THE CAPTIONED APPEAL IS PREFERRED BY THE REVENUE A ND THE CROSS OBJECTION IS PREFERRED BY THE ASSESSEE W HICH ARISE FROM THE ORDER OF THE CIT(APPEALS) DATED 25.0 5.2009 PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. IN THIS CASE INITIALLY THE ASSESSEE COMPANY FIL ED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 29.11.2006 DECLARING AN INCOME OF RS.1 99 68 172/-. THIS RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX A CT 1961 ( IN SHORT 'THE ACT') ON 11.4.2007. SUBSEQUENTLY ASSESSEE FILED A REVISED RETURN ON 31.3.2008 WHEREBY THE INC OME WAS 2 DECLARED TO THE EXTENT OF RS.93 78 090/-. BEFORE F ILING OF THE REVISED RETURN ON 31.3.2008 THE CASE OF THE ASSESSE E WAS SELECTED FOR SCRUTINY ASSESSMENT BY ISSUANCE OF A N OTICE U/S 143(2) OF THE ACT ON 28.09.2007. SUBSEQUENTLY AN ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED BY T HE ASSESSING OFFICER ON 31.12.2008 WHEREBY THE TOTAL I NCOME WAS DETERMINED AT RS.6 65 50 331/-. IN THE COURSE OF SUCH ASSESSMENT ASSESSING OFFICER HELD THAT THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE ON 31.3.2008 WAS INVAL ID IN VIEW OF PROVISIONS OF SECTION 139(4) AS SUMMARY ASS ESSMENT HAD ALREADY BEEN MADE U/S 143(1) ON 11.4.2007. FOR THE SAID REASON THE ASSESSING OFFICER IGNORED THE REVI SED RETURN FILED BY THE ASSESSEE AND HAS COMPLETED THE ASSESSM ENT BASED ON ORIGINAL RETURN OF INCOME FILED ON 29.11.2 006. THIS ASPECT OF THE ASSESSMENT ALONGWITH VARIOUS OTHER ADDITIONS/DISALLOWANCES WAS CHALLENGED BY THE ASSES SEE IN APPEAL BEFORE THE CIT(APPEALS). REGARDING THE INVA LIDITY OF THE REVISED RETURN OF INCOME THE ASSESSEE PREFERRE D FOLLOWING GROUND OF APPEAL BEFORE THE CIT(APPEALS) : THAT THE ORDER MADE BY THE LEARNED ASSESSING OFFICER IS NOT MAINTAINABLE BEING ISSUED AGAINST TH E LAW AND FACTS. THE ASSESSMENT HAS BEEN MADE ON THE BASIS OF ORIGINAL RETURN FILED ON 29.11.2006 WHERE AS THE ASSESSEE HAS FILED A REVISED RETURN IN TIME IN TERMS OF SECTION 139(5) ON 31.3.2008 DULY ACKNOWLEDGED WHICH HAS OBLITERATED THE ORIGINAL RETURN. THEREFORE THE ASSESSMENT MADE U/S 143(3) ON THE BASIS OF ORIGINAL RETURN INSTEAD OF REVISED RETURN MAY PLEASE BE ANNULLED. 3. BEFORE THE CIT(APPEALS) ASSESSEE SUBMITTED THAT IT WAS ELIGIBLE TO FILE THE REVISED RETURN U/S 139(5) OF THE ACT UPTO 31.3.2008 AND IT WAS CONTENDED THAT THE PROVIS IONS OF SECTION 139(4) OF THE ACT WERE NOT APPLICABLE IN AS SESSEE'S 3 CASE SINCE IT HAD FILED THE ORIGINAL RETURN WITHIN THE PRESCRIBED TIME. THE ASSESSEE ALSO SUBMITTED THAT THE PROCESSING OF RETURN U/S 143(1) OF THE ACT DOES NOT AMOUNT TO ASSESSMENT. THE CIT(APPEALS) UPHELD THE PLEA OF TH E ASSESSEE THAT PROCESSING OF RETURN U/S 143(1) OF TH E ACT DOES NOT AMOUNT TO ASSESSMENT AND IN THIS CONNECTION RE LIED UPON THE JUDGEMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF BALJIT SINGH IN CWP NO. 17854 OF 2007 D ATED 3.12.2007. AFTER NOTICING THE DECISION OF THE HON' BLE PUNJAB & HARYANA HIGH COURT THE CIT(APPEALS) HAS DISPOSED OF THE AFORESAID GROUND IN THE FOLLOWING WORDS : THUS IN VIEW OF THE ABOVE DISCUSSION AND RESPECTFULLY FOLLOWING THE ABOVESAID DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT THIS GROUND OF THE ASSESSEE IS ALLOWED. (UNDERLINED FOR EMPHASIS BY US.) IN TERMS THEREOF THE GROUND OF APPEAL PREFERRED BY THE ASSESSEE WHICH WE HAVE EXTRACTED ABOVE STOOD ALLO WED. IN OTHER WORDS THE GROUND OF APPEAL PREFERRED BY THE ASSESSEE WHICH SOUGHT ANNULMENT OF THE ASSESSMENT MADE U/S 143(3) OF THE ACT ON 7.1.2008 STOOD ALLOWED IN TERMS OF AFORESAID DECISION OF THE CIT(APPEALS). 4. AGAINST SUCH DECISION THE REVENUE HAS PREFERRED AN APPEAL BEFORE US ON THE FOLLOWING LINES : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THAT THE REVISED RETURN FILED BY THE ASSESSEE WAS NOT A VALID RETURN UNDER SECTION 139(4) READ WITH SECTION 139(5) OF THE ACT. 4 5. THE RESPONDENT ASSESSEE HAS ALSO PREFERRED CROSS OBJECTION ON THE AFORESAID DECISION OF THE CIT(APPE ALS) BY WAY OF GROUND NO.1 WHICH READS AS UNDER : THAT THE LEARNED CIT(APPEALS) HAS ERRED IN SUSTAINING THE DISALLOWANCES MADE BY THE ASSESSING OFFICER ON THE BASIS OF ORIGINAL RETURN DATED 29.11.2006 WHEREAS HE HAS ANNULLED THE ASSESSMENT ORDER MADE ON THE BASIS OF ORIGINAL RETURN AND CONSEQUENTLY REVISED RETURN DATED 31.3.2008 DEEMED TO BE ACCEPTED AS RETURNED. 6. BEFORE PROCEEDING TO ADJUDICATE THE PRELIMINARY ISSUE ARISING FROM THE ACTION OF THE ASSESSING OFFICER IN INVALIDATING THE RETURN FILED ON 31.3.2008 IT WOUL D BE APPROPRIATE TO MENTION THAT INITIALLY IN MEMO OF AP PEAL FILED THE REVENUE HAD NOT SPECIFICALLY CHALLENGED THE ABO VE POSITION OF THE CIT(APPEALS) WHICH WAS SOUGHT TO B E CHALLENGED BY WAY OF THE ABOVE GROUND IN THE REVISE D GROUNDS OF APPEAL FILED DURING THE COURSE OF HEARIN G. BE THAT AS IT MAY THE LEARNED COUNSEL FOR THE ASSESSE E HAS NOT OBJECTED TO THE REVISION OF GROUNDS OF APPEAL BY TH E REVENUE AND ACCORDINGLY WE PROCEED TO ADJUDICATE THE SAME. 7. BEFORE US LEARNED DR APPEARING FOR THE REVENUE HAS SUBMITTED THAT THE CIT(APPEALS) WAS NOT JUSTIFIED I N ALLOWING GROUND NO.1 RAISED BY THE ASSESSEE BEFORE IT WITHOU T APPRECIATING THAT THE REVISED RETURN FILED BY THE A SSESSEE WAS NOT A VALID RETURN U/S 139(4) READ WITH SECTION 139(5) OF THE ACT. THE LEARNED COUNSEL FOR THE RESPONDENT AS SESSEE HAS DEFENDED THE ORDER OF THE CIT(APPEALS) IN ANNUL LING THE ASSESSMENT. ACCORDING TO HIM THE ASSESSING OFFICE R WRONGLY REFERRED TO SECTION 139(4) OF THE ACT WHER EAS THE REVISED RETURN WAS VALIDLY FILED AS PER SECTION 139 (5) OF THE 5 ACT. FURTHER LEARNED COUNSEL FOR THE RESPONDENT A SSESSEE HAS SUBMITTED THAT THE CIT(APPEALS) AFTER HAVING AN NULLED THE ASSESSMENT MADE ON THE BASIS OF THE ORIGINAL RE TURN ERRED IN SUSTAINING CERTAIN DISALLOWANCES MADE IN A N ASSESSMENT BASED ON ORIGINAL RETURN AND THEREFORE ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO ACCEPT THE R EVISED RETURN DATED 31.3.2008 AS RETURNED. 8. WE HAVE CONSIDERED THE ENTIRE GAMUT OF FACTS AR ISING FROM THE ACTION OF THE ASSESSING OFFICER IN INVALID ATING THE REVISED RETURN FILED BY THE ASSESSEE ON 31.3.2008 A ND PROCEEDING TO FINALIZE THE ASSESSMENT DATED 31.12.2 008 ON THE BASIS OF THE ORIGINAL RETURN OF INCOME. IN OUR VIEW THE AFORESAID ISSUE GOES TO THE ROOT OF THE MATTER AND THE SUBSEQUENT DISALLOWANCES/ADDITIONS MADE IN THE ASSE SSMENT WHICH HAVE BEEN ALSO DELIBERATED BY THE CIT(APPEALS ) ARE TO BE TAKEN UP ONLY IN CASE THE ASSESSMENT MADE BY THE ASSESSING OFFICER IS HELD TO BE VALID. 9. SECTION 139(4) HAS BEEN REFERRED TO BY THE ASSES SING OFFICER IN THE ASSESSMENT ORDER TO INVALIDATE THE R ETURN AND NOW IN THE REVISED GROUND OF APPEAL THE REVENUE CO NTENDS THAT THE REVISED RETURN OF INCOME FILED ON 31.3.200 8 IS INVALID IN TERMS OF SECTION 139(4) READ WITH SECTION 139(5) OF THE ACT. SINCE SECTIONS 139(4) & 139(5) HAVE BEEN REF ERRED TO BY THE REVENUE AT DIFFERENT STAGES IT WOULD BE APP ROPRIATE TO REFER THE SAME WHICH READ AS UNDER :- 139[(4) ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED 29 TO HIM UNDER SUB-SECTION (1) OR WITHIN THE TIME A LLOWED UNDER A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME 29 BEFORE THE EXPIRY OF ONE YEAR FROM THE 6 END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE C OMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER : PROVIDED THAT WHERE THE RETURN RELATES TO A PREVIOUS YEAR R ELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL 1988 OR ANY EARLIER ASSESSMENT YEAR THE REFERENCE TO ONE YEAR AFORESAI D SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR.] [(5) IF ANY PERSON HAVING FURNISHED A RETURN UNDER SUB-SECTION (1) OR IN PURSUANCE OF A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT THEREIN HE MAY FURNISH A REVISED RETURN AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FR OM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION O F THE ASSESSMENT WHICHEVER IS EARLIER : PROVIDED THAT WHERE THE RETURN RELATES TO THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL 1988 OR ANY EARLIER ASSESSMENT YEAR THE REFERENCE TO ONE YEAR AFORESAI D SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. SECTION 139 IS A PART OF CHAPTER IV OF THE ACT DEAL ING WITH PROCEDURE FOR ASSESSMENT. SECTION 139(1) OF THE AC T PRESCRIBES THAT EVERY PERSON IF HIS TOTAL INCOME O R THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE I S ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO TAX HE SHALL FURNISH RETURN OF INCOME IN THE PRESCRIBED MANNER O N OR BEFORE THE DUE DATE STATED THEREIN. SECTION 139(4) OF THE ACT PERMITS A PERSON WHO HAS NOT FURNISHED A RETURN WI THIN THE TIME ALLOWED TO HIM U/S 139(1) OR WITHIN THE TIME A LLOWED UNDER A NOTICE ISSUED U/S 142(1) TO FURNISH SUCH RE TURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEF ORE THE COMPLETION OF ASSESSMENT WHICHEVER IS EARLIER. SEC TION 139(5) OF THE ACT PERMITS A PERSON WHO HAS FURNISH ED A RETURN U/S 139(1) OR IN PURSUANCE OF A NOTICE ISSUE D U/S 142(1) OF THE ACT TO FURNISH A REVISED RETURN AT A NY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE R ELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF ASSESSM ENT 7 WHICHEVER IS EARLIER IF SUCH A PERSON DISCOVERS AN Y OMISSION OR ANY WRONG STATEMENT IN THE RETURN OF INCOME INIT IALLY FILED. 10. A PERUSAL OF THE AFORESAID TWO SUB-SECTIONS OF SECTION 139 NAMELY SUB-SECTION (4) AND (5) REVEAL THAT THE Y OPERATE IN DIFFERENT SITUATIONS. SECTION 139(4) ENTITLES A PERSON TO FILE A RETURN OF INCOME EVEN BEYOND THE PERIOD PERM ISSIBLE U/S 139(1) OR AS PER NOTICE ISSUED U/S 142(1) OF TH E ACT. ON THE OTHER HAND SECTION 139(5) OPERATES IN A CASE W HERE AN ASSESSEE HAS FILED A RETURN OF INCOME EITHER WITHIN THE PERIOD PRESCRIBED U/S 139(1) OR IN PURSUANCE TO A NOTICE U /S 142(1) OF THE ACT WHERE SUCH AN ASSESSEE DISCOVERS ANY OM ISSION OR ANY WRONG STATEMENT IN THE RETURN SO FILED SECT ION 139(5) PERMITS HIM TO FURNISH A REVISED RETURN WITHIN THE PERIOD PRESCRIBED THEREIN. 11. IN THE AFORESAID BACKGROUND WE MAY NOW CONSIDE R THE FACTS OF THE PRESENT CASE. IN THIS CASE ASSESSEE FILED ITS INITIAL RETURN OF INCOME FOR THE ASSESSMENT YEAR 20 06-07 ON 29.11.2006 WHICH IS A RETURN OF INCOME FILED WITHI N THE DUE DATE PRESCRIBED IN SECTION 139(1) OF THE ACT READ W ITH CBDT CIRCULAR F.NO. 133/38/2006-TPL(PT) DATED 24.10.2006 . THE ASSESSEE FILED A REVISED RETURN ON 31.3.2008 WHICH IS CLAIMED TO BE A RETURN FILED IN TERMS OF SECTION 13 9(5) OF THE ACT. UNDISPUTEDLY THE INITIAL RETURN OF INCOME FIL ED BY THE ASSESSEE IS WITHIN THE TIME ALLOWED U/S 139(1) OF T HE ACT AND THEREFORE IN OUR VIEW SUBSEQUENT RETURN FILED ON 3 1.3.2008 CANNOT BE EXAMINED WITH REFERENCE TO SECTION 139(4) OF THE ACT. THE FACTUM OF THE INITIAL RETURN OF INCOME BE ING WITHIN THE TIME ALLOWED U/S 139(1) OF THE ACT IS NOT IN DI SPUTE. 8 THEREFORE IN THIS FACTUAL REALM IT IS INEXPLICABL E AS TO WHY THE ASSESSING OFFICER REFERRED TO THE PROVISIONS OF SECTION 139(4) OF THE ACT TO INVALIDATE THE RETURN OF INCOM E FILED BY THE ASSESSEE ON 31.3.2008. QUITE CLEARLY IN SUCH A SITUATION THE PROVISIONS OF SECTION 139(5) OF THE ACT COME INTO PLAY. IN TERMS OF SECTION 139(5) AS NOTED EA RLIER THE ASSESSEE HAVING FILED A RETURN WITHIN THE TIME ALLO WED U/S 139(1) WAS COMPETENT TO FURNISH A REVISED RETURN O F INCOME IF HE DISCOVERED ANY OMISSION OR ANY WRONG STATEMEN T IN THE RETURN OF INCOME ORIGINALLY FILED. THUS THE REFER ENCE MADE BY THE ASSESSING OFFICER TO SECTION 139(4) OF THE A CT IS MISPLACED. 12. NOW THE OTHER OBJECTION TAKEN BY THE ASSESSING OFFICER IS THAT THE RETURN OF INCOME FILED ON 31.3 .2008 WAS AFTER THE SUMMARY ASSESSMENT MADE U/S 143(1) ON 11.4.2007. IN THIS CONTEXT IT WOULD BE PERTINENT T O NOTE THAT SECTION 139(4) CONTAINS A CONDITION THAT THE RETURN MAY BE FURNISHED AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE C OMPLETION OF ASSESSMENT WHICHEVER IS EARLIER. SIMILAR CONDI TION IS PLACED IN SECTION 139(5) WHEREBY A PERSON IS PERMI TTED TO FURNISH REVISED RETURN AT ANY TIME BEFORE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEF ORE THE COMPLETION OF ASSESSMENT WHICHEVER IS EARLIER. NO W THE PLEA OF THE REVENUE IS THAT THE RETURN FILED ON 29. 11.2006 WAS SUBJECTED TO A SUMMARY ASSESSMENT U/S 143(1) ON 11.4.2007 AND THEREFORE AFTER SUCH DATE THE ASSESS EE COULD NOT HAVE FILED A REVISED RETURN OF INCOME WHICH TH E ASSESSEE FILED ON 31.3.2008. THIS PLEA IS FOUNDED ON THE RE ASONING 9 THAT PROCESSING OF RETURN U/S 143(1) OF THE ACT TAN TAMOUNTS TO COMPLETION OF THE ASSESSMENT AS UNDERSTOOD IN THE CONTEXT OF SECTION 139(5) OF THE ACT. ON THIS POINT IN OU R VIEW THE JUDGEMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COUR T IN THE CASE OF BALJIT SINGH (SUPRA) CLEARLY NEGATES THE ST AND OF THE REVENUE. AS PER THE HON'BLE HIGH COURT U/S 143(1) OF THE ACT ONLY RETURN OF INCOME IS PROCESSED AND THERE IS NO APPLICATION OF MIND TO CONCLUDE THAT ANY ASSESSMENT ORDER IS PASSED AND IN THIS CONTEXT REFERENCE WAS MADE BY T HE HON'BLE COURT TO THE JUDGEMENT OF THE HON'BLE APEX COURT IN THE CASE OF ACITV RAJESH JHAVERI STOCK BROKERS P.LT D. 291 ITR 500 (S.C). FOLLOWING THE AFORESAID PARITY OF RE ASONING PROCESSING OF THE RETURN MADE UNDER SECTION 143(1) OF THE ACT ON 11.4.2007 CANNOT BE CONSTRUED AS COMPLETION OF THE ASSESSMENT FOR THE PURPOSES OF SECTION 139(5) OF THE ACT. IN ANY CASE THE STAND OF THE REVENUE IS QUITE QUEER AS THE FOLLOWING DISCUSSION WOULD SHOW. ON 28.9.2007 THE ASSESSING OFFICER ISSUED A NOTICE U/S 143(2) OF THE ACT ASSUMING JURISDICTION TO MAKE A SCRUTINY ASSESSMENT AND DURING THE PENDENCY OF SUCH SCRUTINY ASSESSMENT AS SESSEE FILED A REVISED RETURN ON 31.3.2008. STRANGELY THE ASSESSING OFFICER CONTENDS COMPLETION OF THE ASSESSMENT FO R THE PURPOSES OF SECTION 139(4) [ SIC .139(5)] OF THE ACT ON 11.4.2007 ITSELF WHILE THE SCRUTINY ASSESSMENT WAS STILL OPEN AND CAME TO BE FINALIZED ONLY ON 31.12.2008. IN SU CH A SITUATION WE FIND NO JUSTIFICATION FOR THE ASSESSI NG OFFICER TO TREAT THE RETURN FILED ON 31.3.2008 AS INVALID FOR THE REASON THAT THE ASSESSMENT WAS ALREADY COMPLETED ON ACCOUN T OF PROCESSING DONE U/S 143(1) ON 11.04.2007 IN THE FA CE OF THE 10 FACT SITUATION THAT THE SCRUTINY ASSESSMENT U/S 143 (3) WAS GOING ON AT THE RELEVANT POINT OF TIME. 13. IN VIEW OF THE AFORESAID IT IS SAFE TO DEDUCE THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INVALIDATING THE RETURN OF INCOME FILED BY THE ASSESSEE ON 31.3.2008 AND HI S ACTION OF FINALIZING THE ASSESSMENT BASED ON ORIGINAL RETU RN OF INCOME FILED ON 29.11.2006 IS INFIRM IN THE EYES OF LAW. 14. AS A CONSEQUENCE OF THE ABOVE CONCLUSION THE N EXT POINT THAT ARISES FOR CONSIDERATION IS THAT IN THE BACKGROUND OF THE ABOVE INFIRMITY WAS THE CIT(APPEALS) JUSTIF IED IN ANNULLING THE ASSESSMENT MADE BY THE ASSESSING OFFI CER U/S 143(3) OF THE ACT ON 31.12.2008 ? THOUGH THE CIT(A PPEALS) IN HIS OPERATIVE PORTION OF THE ORDER WHICH WE HAV E REPRODUCED EARLIER HAS NOT SAID SO IN AS MANY WORD S BUT HE HAS CLEARLY CONCLUDED IN FAVOUR OF THE ASSESSEE BY ALLOWING THE GROUND OF APPEAL AS PREFERRED BY THE ASSESSEE WHICH SOUGHT ANNULMENT OF THE ASSESSMENT AND THEREFORE W E PROCEED ON THE PREMISE THAT THE CIT(APPEALS) ANNULL ED THE ASSESSMENT FOR THE REASON THAT THE ASSESSING OFFICE R WRONGLY INVALIDATED THE REVISED RETURN FILED ON 31.3.2008 A ND INSTEAD FRAMED ASSESSMENT ON THE BASIS OF THE INITIAL RETUR N OF INCOME FILED ON 28.11.2006. IN THIS REGARD THOUGH THE CIT(APPEALS) WAS CORRECT IN NOTICING A LEGAL INFIRM ITY IN THE ACTION OF THE ASSESSING OFFICER HOWEVER IN OUR CO NSIDERED OPINION HE ERRED IN ANNULLING THE ASSESSMENT ALL T OGETHER. WE SAY SO FOR THE REASON THAT IN THIS CASE THE ASSE SSING OFFICER DID NOT LACK IN JURISDICTION TO MAKE THE AS SESSMENT. IT IS NOT A CASE WHERE THE ASSESSING OFFICER HAD NO JU RISDICTION 11 ABINITIO TO PASS AN ORDER OF ASSESSMENT U/S 143(3) OF THE ACT. IT IS ONLY IN CASES WHERE AN ORDER HAS BEEN PASSED BY AN AUTHORITY WHO HAD NO JURISDICTION ABINITIO TO PASS AN ORDER OR TO TAKE THE PROCEEDINGS THAT AN ORDER IS LIABLE TO BE ANNULLED. IN CASES WHERE THE AUTHORITY CONCERNED D OES NOT LACK JURISDICTION ALL TOGETHER BUT AN IRREGULARITY OR ANY OTHER ERROR CREEPS IN THE PASSING OF THE ORDER SUCH ORDE R IS NOT LIABLE TO BE ANNULLED BUT IS LIABLE TO BE MERELY SE T ASIDE. A LACK OR ABSENCE OF JURISDICTION IS TO BE DISTINGUIS HED FROM THE POWER OF AN AUTHORITY TO DECIDE A QUESTION RIGHTLY OR WRONGLY. THE ORDER WHICH IS PASSED BY AN AUTHORITY LACKING J URISDICTION IS A NULLITY IN THE EYES OF LAW BUT AN ORDER PASSE D BY AN AUTHORITY WHICH HAS VALID JURISDICTION BUT IN EXERC ISE OF SUCH JURISDICTION ERROR OR IRREGULARITIES HAVE CREPT IN SUCH ORDER CANNOT BE DECLARED AS NULLITY IN THE EYES OF LAW OR ANNULLED. A GAINFUL REFERENCE CAN BE MADE TO THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF DELHI CLOTH & GENERAL MILLS CO. LTD. V R.R.GUPTA (1976) 38 STC 1123 (S.C) AND ALSO THE JUDGEMENT OF ALLAHABAD HIGH COURT IN THE C ASE OF SANT BABA MOHAN SINGH V CIT 90 ITR 197 AND THAT OF THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF SI TA RAM RATHORE V CIT (1994) 77 TAXMAN 265 (MP) IN THIS REG ARD. 15. IN THE PRESENT CASE THE ASSESSING OFFICER HAD SEISIN OVER THE ASSESSMENT PROCEEDINGS WHICH WERE INITIATE D BY WAY OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT ON 28.9 .2007 AND THE ACTION OF THE ASSESSING OFFICER IN WRONGLY INVA LIDATING THE REVISED RETURN FILED ON 31.3.2008 AND FINALIZING TH E ASSESSMENT THEREAFTER U/S 143(3) ON THE BASIS OF TH E ORIGINAL RETURN OF INCOME WAS MERELY AN IRREGULARITY. THE ACTION OF 12 NOT CONSIDERING THE REVISED RETURN OF INCOME FILED ON 31.3.2008 WAS A MERE IRREGULARITY WHICH HAD OCCURRE D IN AN OTHERWISE VALIDLY ASSUMED JURISDICTION AND THE CONS EQUENT ORDER U/S 143(3) PASSED ON 31.12.2008 CANNOT BE TRE ATED AS A NULLITY IN THE EYES OF LAW OR ANNULLED. THE CIT(A PPEALS) IN OUR VIEW GRAVELY ERRED IN UPHOLDING THE PLEA OF TH E ASSESSEE OF ANNULMENT OF ASSESSMENT ORDER. AT BEST DUE TO THE IRREGULARITY COMMITTED BY THE ASSESSING OFFICER BY WAY OF IGNORING THE REVISED RETURN FILED ON 31.3.2008 THE ASSESSMENT OUGHT TO HAVE BEEN SET ASIDE BACK TO THE ASSESSING OFFICER TO RECTIFY THE IRREGULARITY. 16. AT THIS STAGE WE MAY ALSO TAKE UP THE CROSS OB JECTION PREFERRED BY THE ASSESSEE ON THIS ASPECT. AS PER T HE ASSESSEE THE CIT(APPEALS) AFTER HAVING ANNULLED TH E ASSESSMENT SUSTAINED CERTAIN DISALLOWANCES MADE BY THE ASSESSING OFFICER WHICH WERE ON THE BASIS OF THE OR IGINAL RETURN OF INCOME AND AS PER THE ASSESSEE THE REVISE D RETURN DATED 31.3.2008 SHOULD DEEMED TO BE ACCEPTED AS RET URNED. IN OUR VIEW THE PLEA SET UP BY THE ASSESSEE IS TO BE DISPOSED-OFF IN THE LIGHT OF OUR AFORESAID DISCUSSI ON IN THE CONTEXT OF GROUND NO.2 RAISED IN THE APPEAL OF THE REVENUE. ONCE THE ANNULMENT DONE BY THE CIT (A) IS HELD UNSUSTAINABLE THE ASSESSEE HAS TO FAIL IN THE AFOR ESAID PLEA RAISED IN THE CROSS-OBJECTION. IN THE BACKGROUND OF THE AFORESAID DISCUSSION IN OUR VIEW IN THIS CASE IT IS APPROPRIATE THAT THE ASSESSMENT ORDER DATED 31.12.2 008 IS SET ASIDE AND THE MATTER IS RESTORED BACK TO THE FI LE OF THE ASSESSING OFFICER TO FINALIZE THE ASSESSMENT AFRESH AFTER TAKING INTO CONSIDERATION THE REVISED RETURNED FILE D BY THE 13 ASSESSEE ON 31.03.2008. NEEDLESS TO SAY THE ASSESS ING OFFICER SHALL ALLOW THE ASSESSEE A REASONABLE OPPOR TUNITY OF BEING HEARD AND THEREAFTER FINALIZE THE ASSESSMENT IN ACCORDANCE WITH LAW. 17. IN VIEW OF THE AFORESAID DISCUSSION ALL OTHER GROUNDS RAISED ARE RENDERED ACADEMIC SINCE THE SAME ARISE F ROM AN ASSESSMENT WHICH HAS BEEN SET ASIDE BY US IN THE FO REGOING PARAGRAPHS. 18. IN THE FINAL ANALYSIS THE ORDER OF THE CIT(APP EALS) IS SET ASIDE AND THE MATTER IS RESTORED BACK TO THE FI LE OF THE ASSESSING OFFICER FOR FRESH ASSESSMENT IN ACCORDANC E WITH LAW IN VIEW OF OUR AFORESAID DISCUSSION. 20. IN THE RESULT THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED AND THE CROSS OBJECTION FILED BY THE ASSESS EE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL 2010. SD/- SD/- (SUSHMA CHOWLA) ( G.S.PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED :30 TH APRIL 2010. POONAM COPY TO : THE APPELLANT/THE RESPONDENT/THE CIT (A)/ THE CIT/THE DR.