JCIT OSD CIRCLE 16.1, NEW DELHI vs. MORPHEUS DEVELOPERS PRIVATE LIMITED, NEW DELHI

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ITA 3333/DEL/2026Status: DisposedITAT Delhi22 July 2026AY 2016-173 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the underlying revision order under Section 263 was quashed by a coordinate bench, the subsequent assessment order based on it also becomes void. Therefore, the assessment order is quashed.

What were the facts?

The Revenue appealed against the CIT(A)'s order which quashed an assessment order. The assessment order was passed under Section 144 r.w.s. 263 r.w.s 144B after a revision order under Section 263 was initially passed.

What were the issues?

Whether an assessment order passed under Section 144 r.w.s. 263 becomes void if the Section 263 revision order is subsequently quashed. Whether the CIT(A) erred in not adjudicating an addition under Section 68 on merits.

Which sections of the Income-tax Act were involved?

Section 144,Section 263,Section 144B,Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH, A: NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SMT. RENU JAUHRI

For Respondent: Ms. Pooja Swaroop, CIT(DR)
Hearing: 22.07.2026Pronounced: 22.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, A: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No.- 3333/Del/2026 [Assessment Year: 2016-17] JCIT, OSD, Morpheus Developers Pvt. Ltd., Circle 16 .1 1, Main Road, Maujpur, 419, 4th Floor, CR Building, Vs New Delhi-110053. New Delhi-110001. PAN- AAICM1972A Revenue Assessee Assessee by Sh. Yudhishthir Mehtani, CA Revenue by Ms. Pooja Swaroop, CIT(DR) Date of Hearing 22.07.2026 Date of Pronouncement 22.07.2026 ORDER Per Renu Jauhri, Accountant Member:

This appeal by the Revenue is directed against the order dated 29.01.2026 of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Assessment Order dated 30.03.2022 passed under section 144 r.w.s. 263 r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the National Faceless Assessment Centre, Delhi, (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2016-17.

ITA No.- 3333/Del/2026 Morpheus Developers Pvt. Ltd. 2. The Revenue has raised the following grounds of appeal:

“ 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in law and on facts in holding that the assessment 1 order passed u/s 144 r.w.s. 263 r.w.s. 144B automatically becomes void merely because the order w/s 263 was quashed by the Hon'ble ITAT. 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) failed to appreciate that the assessment order was based on independent material and non- compliance by the assessee and was sustainable on merits irrespective of the fate of revision proceedings. 3.Whether on the facts and circumstances of the case, the Ld CIT(A) erred in not adjudicating the addition of Rs.73,92,29,291/- made U/s 68 on merits and in not examining the failure of the assessee to discharge the onus under section 68. 4. That the appellant craves leave to add, amend, alter OR withdraw any of the above grounds of appeal at OR before the time of hearing.”

3.

Brief facts are that the assessee filed its return for A.Y. 2016-17 declaring loss of Rs. 2,91,506/-. The case was selected for scrutiny and assessment u/s 143(3) was completed on 29.12.2018 at an income of Rs. 32,49,960/-. 3.1 Subsequently, the PCIT passed a revision order u/s 263 on 18.03.2021 setting aside the assessment order directing the AO to make a fresh assessment u/s 144 r.w.s. 263 r.w.s. 144B was passed by the AO on 30.03.2022 at total assessed income of Rs. 7,38,93,785. The assessee meaningful challenged the order u/s 263 which was quashed by the coordinate bench vide order dated 20.08.2025. Aggrieved with the assessment order, the assessee also preferred an appeal before the Ld. CIT(A). 3.2 Vide order dated 29.01.2026, Ld. CIT(A) quashed the assessment order on the ground that the underlying order u/s 263 had already been quashed.

ITA No.- 3333/Del/2026 Morpheus Developers Pvt. Ltd. Aggrieved by the order of Ld. CIT(A), the Revenue is in appeal before us. 4. We have heard the rival submissions and perused the material available on record. As the underlying order u/s 263 has been quashed by the coordinate bench, we have no hesitation in quashing the impugned order u/s 143(3) r.w.s. 263 of the Act. 5. In the result, appeal of the Revenue is hereby dismissed. Order pronounced in the open court on 22.07.2026

Sd/- Sd/- [SATBEER SINGH GODARA] [RENU JAUHRI] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated- 27 .07.2026. Pooja, Sr. PS. Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR

Asst. Registrar, ITAT, New Delhi,

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