ACIT, CENTRAL CIRCLE-1(2), HYDERABAD vs. LAXMA REDDY KORPOLU, HYDERABAD

Jaiveer Reddy Nalamada, 55/Hyd/2023 2015-16 Hyderabad [PAN No. AAUPN7364E] निर्धाररती द्वधरध/Assessee by: Shri K.C.Devdas, AR रधजस्‍व द्वधरध/Revenue by: Shri Jeevan Lal Lavidiya, CIT-DR सुिवधई की तधरीख/Date of hearing: 20/02/2023 घोर्णध की तधरीख/Pronouncement on: 28/02/2023 आदेश / ORDER PER K. NARASIMHA CHARY, JM: Aggrieved by the order(s) passed by the learned Commissioner of Income Tax (Appeals)-11, Hyderabad (“Ld. CIT(A)”), in the cases of Laxma Reddy Korpolu, Vijay Bhaskar Reddy Korupolu, Jaideep Reddy Nalamada and Jaiveer Reddy Nalamada (“the assessees”) for the assessment year 2015-16, Revenue preferred these appeals. Facts involved in all these appeals are similar and mostly the grounds of appeal. We, therefore, deem it just and convenient to dispose of these appeals by way of this common order.

2. There was a search and seizure operation in the group cases of M/s. Ashoka Developers and Builders Ltd., and M/s. Cybercity Builders and Developers P. Ltd., on 18/02/2016. Assessment under section 143(3) read with section 153A of the Income Tax Act, 1961 (‘the Act’), was made accepting the return of income filed by the assessee. Subsequently, the PCIT on a perusal of records found that the learned Assessing Officer missed certain income on account of purchase of shares for a consideration less than the aggregate Fair Market Value as on the date of valuation and, therefore, the assessment order was erroneous and prejudicial to the interest of Revenue. He, accordingly by order dated 27/12/2019, revised the assessment order under section 263 of the Act directing the learned Assessing Officer to re-work the assessment taking into account the provisions of section 56(2)(vii)(c)(ii) of the Act. Assessees preferred appeals before the Tribunal challenging the orders passed under section 263 of the Act.

3. Pursuant to the orders under section 263 of the Act, Learned Assessing Officer thereafter passed the assessment orders dated 25/06/2019 under section 143(3) read with section 153A and section 263 of the Act, against which the assessee preferred appeals before the learned CIT(A). In the meanwhile, the Tribunal allowed the plea of the assessee and quashed the orders under section 263 of the Act, by way of order dated 30/08/2022 in to 623/Hyd/2019.

4. Assessee brought this fact to the notice of the learned CIT(A) in the appeals preferred against the assessment orders dated 25/06/2019 under section 143(3) read with section 153A and section 263 of the Act. Learned CIT(A) took cognizance of said fact and observed that on the Tribunal setting aside the orders of the PCIT under section 263 of the Act, all the orders consequent to the section 263 orders have become infructuous and, on that premise, he allowed the appeals of the assessee and quashed the orders under section 143(3) read with section 153A and section 263 of the Act. Revenue challenges such an action of the learned CIT(A) in these appeals.

5. It is an admitted fact that the section 263 orders giving rise to an occasion for passing the assessment order under section 143(3) read with section 153A and section 263 of the Act were quashed and as rightly observed by the learned CIT(A) in the impugned orders, the consequent assessment orders ceased to exist and no steps can be taken basing on that order. We, therefore, do not find any illegality or irregularity in the findings of the learned CIT(A) and accordingly decline to interfere with his findings. Appeals are devoid of merits and consequently dismissed.

Order pronounced in the open court on this the 28th day of February, 2023.