DCIT (E)-2(1), MUMBAI vs. SIR DORABJI TATA TRUST, MUMBAI

This is an appeal preferred by the revenue against the order of the Commissioner of Income Tax (Appeals)/NFAC, Delhi dated 13.01.2023 for assessment year 2014-15.

The main grievance of the revenue is against the action of the Ld. CIT(A) allowing the appeal of the assessee. 3. Brief facts are that the assessee trust filed its return of income on 30.09.2014 for AY 2014-15 declaring total income at Rs. Nil. The assessee trust is registered as a Charitable Organization with DIT(Exemption), Mumbai u/s 12A of the Income Tax Act, 1961 (hereinafter “the Act”) dated 07.10.2009. Later, the return of income was taken up for scrutiny and original assessment u/s 143(3) of the Act was completed by AO by passing the assessment order dated 30.12.2019 which was set aside by the Ld. CIT(E) exercising his revisional jurisdiction u/s 263 of the Act vide order dated 29.03.2019. 2 A.Y. 2014-15 Sir Dorabji Tata Trust And pursuant to the revision order u/s 263 of the Act dated 29.03.2019, the AO gave effect to it on 31.12.2019 u/s 143(3) r.w. section 263 of the Act by framing re-assessment of total income at Rs.128,08,46,000/-. 4. Meanwhile, the assessee trust had preferred an appeal before this Tribunal against the revision order passed by the Ld. CIT(E) u/s 263 of the Act dated 29.03.2019 which was allowed by the Tribunal in for AY 2014-15 by order dated 28.12.2020 wherein the Tribunal was pleased to quash the revision order of the Ld. CIT(E). This important fact the assessee brought to the notice of the Ld. CIT(A)/NFAC that the Tribunal has quashed the Ld. CIT(E)’s revision order u/s 263 of the Act, which was the basis for re- assessment order that has been passed by AO and pleaded that re- assessment order of AO cannot survive in the light of the Tribunal quashing Ld. CIT(E)’s section 263 revision order; and the Ld. CIT(A)/NFAC appreciating the same has upheld the plea and passed the impugned order holding that the re-assessment order dated 31.12.2019 u/s 143(3) r.w. section 263 of the Act has become infructuous. And resultantly, he allowed the appeal of the assessee. Aggrieved by the aforesaid action of the Ld. CIT(A)/NFAC, the revenue is before us. 5. We have heard both the parties and perused the records. We note that the AO has framed the re-assessment order u/s 143(3) r.w. section 263 of the Act dated 31.12.2019, pursuant to the revision order passed by Ld. CIT(E) u/s 263 of the Act dated 29.03.2019, which has been quashed by this Tribunal vide order dated 28.12.2020 (supra), 3 A.Y. 2014-15 Sir Dorabji Tata Trust and therefore, the impugned action of the Ld. CIT(A) holding the action of the AO framing re-assessment as infructuous is valid because the case of the assessee trust is squarely covered by the legal Maxim “Sublato Fundamento credit opus” meaning in case foundation is removed, the super-structure falls. In the case of Badarinath Vs. Tamilnadu AIR 2000 (SC) 3243 SC the Hon’ble Supreme Court has held that once the basis of proceeding is gone, all consequential order and acts would fall on the ground automatically which is applicable to judicial and quasi-judicial proceedings. Therefore, the action of the Ld. CIT(A)/NFAC is legally correct. And therefore, the revenue appeal stands dismissed.