Brief of the Case
Supreme Court held In the case of M/s. Standard Chartered Finance Ltd. vs. CIT that the question of reassessment arises only when there is an assessment in the first instance i.e. no reassessment is possible without original assessment order passed. The High Court has wrongly not acted upon the ratio laid down in Trustees of H.E.H. The Nizam’s Supplemental Family Trust’s  242 ITR 381 SC which squarely applies in the instant case in favour of the assessee.
Facts of the Case
The admitted facts are that on the return filed by the assessee for this Assessment Year, no assessment order was passed. However, much after the last date of the Assessment Year is over, the Assessing Officer sought to re-open the assessment by issuing notice under Section 10 of the Act and thereafter proceeded to re-assess the interest chargeable under the aforesaid Act. The matter was carried in appeal by the assessee.
Contention of the Assessee
The ld counsel of the assessee submitted that when there was no assessment order even passed in the original proceedings there was no question of re-opening the so-called assessment and make the re-assessment.
Held by CIT (A)
CIT (A) accepted the contention of assessee that no reassessment is valid where no original assessment order passed and set aside the re-assessment order.
Held by ITAT
ITAT upheld the order of CIT (A).
Held by High Court
High Court has reversed the view taken by the Tribunal holding that even if there was no original assessment order passed under Section 10 of the Act, there could be re-assessment.
Held by Supreme Court
Supreme Court held that the High Court has wrongly not acted upon the ratio laid down in Trustees of H.E.H. The Nizam’s Supplemental Family Trust’s  242 ITR 381 SC which squarely applies in the instant case in favour of the assessee. The ration of the said judgment is that in those situations where there is no assessment order passed, there cannot be a notice for reassessment inasmuch as the question of reassessment arises only when there is an assessment in the first instance.
Accordingly, appeal of the assessee allowed.
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