DEEPAK STEEL AND POWER LTD,BARBIL vs. DCIT-ROURKELA CIRCLE.ROURKELA., ROURKELA

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK (VIRTUAL HEARING AT KOLKATA) SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER SHRI SONJOY SARMA, JUDICIAL MEMBER

ITA Nos. 577 & 578/CTK/2025 Assessment Years : 2008-09 & 2009-10

Deepak Steel and Power Ltd., Vs. DCIT, Rourkela Circle, C/o Kadmawala & Co., Rourkela, Chartered Accountants, Aayakar Bhawan, Udit Budhram, Oram Market, Nagar, Rourkela, Odisha Kachery Road, Rourkela, – 769012, Raurkela Odisha – 769012, Rourkela [PAN: AABCD8224D] APPELLANT RESPONDENT

Assessee by : Shri M.R. Sahu Shri Rajesh Agarwal, ARs Revenue by : None (Adjournment application filed)

Date of hearing : 13.04.2026 & (final date of hearing)16.04.2026 Date of Pronouncement : 22.05.2026

O R D E R PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

These two appeals filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”)

2 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. by the Ld. Commissioner of Income Tax (Appeals), Bhubaneshwar-2 [hereinafter referred to as “the Ld. CIT(A)] dated 02.09.2025 for AY 2008- 09, DIN & order No. ITBA/APL/S/250/2025-26/1080283299(1) and order dated 02.09.2025 for AY 2009-10, DIN & order No. ITBA/APL/S/250/2025-26/1080283484(1) on the following grounds of appeal:

ITA No. 577/CTK/2025

“1. That on the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in dismissing the legal and jurisdictional grounds of appeal raised towards the lack of jurisdiction of the Pr. CIT-Sambalpur u/s 263 of the Act, to review/revise a search assessment order framed u/s 153A r.w. 143(3) of the Act in the case of an unabated/completed assessment without referring to any incriminating maternal unearthed by the search team. accordingly the jurisdiction assumed by the Pr.CIT towards revision u/s 263 of the Act is defective and bad in law, thus the revision order u/s 263 of the Act passed by the Pr.CIT Sambalpur vitiated in law and liable to quashed. 2. That on the facts, and in the circumstances of the case and in law, the Ld CIT (A) erred in dismissing the legal and jurisdictional grounds of appeal raised towards the lack of jurisdiction of the Pr.CIT-Sambalpur u/s.263 of the Act, to review/revise a search assessment order framed u/s 153A r.w.s 143(3) of the Act which itself is illegal and bad in law in the case of an unabated/completed assessment in absence of any incriminating material unearthed by the search team, accordingly the jurisdiction assumed by the Pr. CIT towards revision u/s 263 is defective and bad in law, thus the revision order u/s 263 of the Act passed by the Pr.CIT-Sambalpur is unsustainable in the eyes of law and liable to quashed 3. That on the facts, and in the circumstances of the case and in law, the Ld CITIA) erred in dismissing the legal and jurisdictional grounds of appeal used towards the lack of jurisdiction of the Pr.CIT-Sambalpur u/s 263 of the Act, to review/revise a search assessment order framed u/s 153A r.ws 143/3) without revising the approval u/s 1530 of the Act and finding that the approval u/s 1530 of the Act to be erroneous and prejudicial to the interest of revenue, the revisionary powers u/s.263 of the Act invoked by the Pr.CIT, Sambalpur for the assessment order framed u/s 153A r.wis 143A of the Act after getting approval u/s 1530 of the Act

3 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. is bad in law, thus the revision order passed u/s 263 of the Act is unsustainable in the eye's of law liable to be quashed. 2. The assessee has also raised additional legal and jurisdictional grounds of appeal: That on the facts and circumstances of the case and in law, the AO erred in passing the impugned order dated 23/03/2016 under a wrong section le section 263/143(3) whereas it should have been passed u/s. 263/143 (3) r.w.s 153A of the IT Act and failed to appreciate the legal principle that the once the order passed u/s 153A is revised or set aside u/s 263 by the Pr.CIT, the assessment order u/s 153A still continues to hold its original character of assessment a/s. .534, thus the order u/s.263/143(3) is bad in law and is nullity 2 That on the facts and circumstances of the case and in law, the AO erred in passing the impugned order dated 23/03/2016 น/ร.263/143(3) without taking approval u/s 1530 and failed to consider the legal principle that the revision effect order also partake and continue to hold its original character of order u/s.153A and that too completed/unabated assessment, accordingly the assessment order passed in consequence to the revision order in absence of incriminating material and approval u/s 1530 is vitiated in law and deserves to be quashed". (B) Additional legal grounds of appeal raised above are purely legal in nature goes to the root of the matter can be taken as additional grounds at any stage of proceeding and even before the Hon'ble ITAT for the 1 time and are emanating from the records available before the Tribunal. The legal grounds do not require any investigation and all materials are already on record before the Tribunal. (C). it is humbly prayed before your honour to admit and adjudicate the additional legal jurisdictional grounds of appeal raised above. Reliance in this regard is placed upon the decisions in the cases of "National Thermal Power Corporation vs. CIT (1998) 229 ITR 383 (SC), Sikska "O" Anusadhan Vs. CIT (2011) 336 ITR 112 (Orissa.HC).”

578/CTK/2025

“1. That on the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in dismissing the legal and jurisdictional grounds of appeal raised towards the lack of jurisdiction of the Pr. CIT-Sambalpur u/s 263 of the Act, to review/revise a search assessment order framed u/s 153A r.w. 143(3) of the Act in the case of an unabated/completed assessment without referring to any incriminating maternal unearthed by the search team. accordingly the jurisdiction assumed by the Pr.CIT towards revision u/s 263 of the Act is defective and bad in law, thus the revision order u/s 263 of the Act passed by the Pr.CIT Sambalpur vitiated in law and liable to quashed.

4 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. 2. That on the facts, and in the circumstances of the case and in law, the Ld CIT (A) erred in dismissing the legal and jurisdictional grounds of appeal raised towards the lack of jurisdiction of the Pr.CIT-Sambalpur u/s.263 of the Act, to review/revise a search assessment order framed u/s 153A r.w.s 143(3) of the Act which itself is illegal and bad in law in the case of an unabated/completed assessment in absence of any incriminating material unearthed by the search team, accordingly the jurisdiction assumed by the Pr. CIT towards revision u/s 263 is defective and bad in law, thus the revision order u/s 263 of the Act passed by the Pr.CIT-Sambalpur is unsustainable in the eyes of law and liable to quashed 3. That on the facts, and in the circumstances of the case and in law, the Ld CITIA) erred in dismissing the legal and jurisdictional grounds of appeal used towards the lack of jurisdiction of the Pr.CIT-Sambalpur u/s 263 of the Act, to review/revise a search assessment order framed u/s 153A r.ws 143/3) without revising the approval u/s 1530 of the Act and finding that the approval u/s 1530 of the Act to be erroneous and prejudicial to the interest of revenue, the revisionary powers u/s.263 of the Act invoked by the Pr.CIT, Sambalpur for the assessment order framed u/s 153A r.wis 143A of the Act after getting approval u/s 1530 of the Act is bad in law, thus the revision order passed u/s 263 of the Act is unsustainable in the eye's of law liable to be quashed. 2.1 The assessee has also raised additional legal and jurisdictional grounds of appeal:

“1. That on the facts and circumstances of the case and in law, the AO erred in passing the impugned order dated 23/03/2016 under a wrong section ie section 263/14313) whereas it should have been passed u/s 263/143 (3) r.w.s. 153A of the IT Act and failed to appreciate the legal principle that the once the order passed u/s 153A is revised or set aside u/s 263 by the Pr.CIT, the assessment order u/s 153A still continues to hold its original character of assessment u/s 153A, thus the order u/s 263/143(3) is bad in law and is nullity. 2. That on the facts and circumstances of the case and in law, the AO erred in passing the impugned order dated 23/03/2016 u/s 263/143(3) without taking approval u/s.1530 and failed to consider the legal principle that the revision effect order also partake and continue to hold its original character of order u/s.153A and that too completed/unabated assessment, accordingly the assessment order passed in consequence to the revision order in absence of incriminating material and approval u/s 153D is vitiated in law and deserves to be quashed" (B) Additional legal grounds of appeal raised above are purely legal in nature goes to the root of the matter can be taken as additional grounds at any stage of proceeding and even before the Hon'ble ITAT for the 1 time and are emanating from the records available before the Tribunal. The legal grounds do not require any investigation and all materials are already on record before the Tribunal.

5 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. (C) It is humbly prayed before your honour to admit and adjudicate the additional legal jurisdictional grounds of appeal raised above. Reliance in this regard is placed upon the decisions in the cases of "National Thermal Power Corporation vs. CIT (1998) 229 ITR 383 (SC)", Sikska "O" Anusadhan Vs. CIT (2011) 336 ITR 112 (Orissa.HC).”

3 On going through the above grounds, it is clear that the grounds are identical accept the difference in figures, therefore, the cases were heard together. For the sake of convenience, we take up first for ITA No. 577/CTK/2025 for AY 2008-09.

ITA No. 577/CTK/2025

6 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. read with section 143(3) of the Act dated 28.03.2013 determining assessed income at Rs. 66,60,10,150/- without referring to any incriminating materials, the AO has mentioned in the assessment order that “the assessment order has passed after obtaining the necessary approval from Joint Commissioner of Income Tax, Rourkela for provision of section 153D of the Act has communicated vide letter No. 3757 dated 28.03.2013.

“On perusal of the written submissions / details submitted by the assessee during the course of hearing, it is found that the trading stock of Rs.7,17,07,182/-is duly credited in the P & L account. Hence, no adverse Inference is drawn on this aspect/issue. So far the claim of depreciation on power plant to the tune of Rs. 15,58,38,049/, for the F.Y.2007-08, relevant to A.Y.2008-09 and the assessee's reply to the query of the A.O. during the assessment proceedings that there was no addition of power plant during the year, the written submission of the A.R. of the assessee is as under - "Further, your honour has asked that assessee has stated in reply during earlier assessment proceedings that there was no addition of power plant during the F.Y.2007-08 in regards of query about addition/deletion of fixed

7 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. assets, hence, on the basis of same your honour has intend to disallow depreciation claimed on such Power Plant. In this regards, with due respect we have state that we clarify the same and found that such reply was made inadvertently due to repetitive queries in all years of assessment proceedings. We express our apology to your honour in this regards and state that the mistake was not intentional. Further, we have to state that the assessee has showing the cost of Power Plant Project in W.LP. till the A.Y.2008-09 and initially recognized to asset during the A.Y.2008-09 in the books. Some small amount of additions has been made in A. Y.2009-10 onward, toward it. Further, we have to state that we can produce any other documents as your honour may ask for your satisfaction." From the reply of the A.R. of the assessee it is apparent that the A.O. during the scrutiny proceedings has not called for the details regarding the addition of power plants and failed to examine the genuineness of claim of such huge depreciation by simply accepting the submission of the assessee. Reference is made to the rulings given by the Hon'ble Supreme Court in the case of Ramapyari Devi Sarogi Vrs. CIT (1968) 67 ITR 84 (SC) and Smt. Tara Devi Aggarwal Vrs. CIT reported in 88 ITR 323 (SC) (1973) in which the Hon'ble Apex Court has held that lack of enquiry or verification at the relevant time by the Assessing Officer would constitute prejudice to the interest of revenue and would involve error of facts and law. It was held by the jurisdictional High Court in the case of Umashankar Rice Mills Vs. CIT reported in 187 ITR 638(Ori)that, where the Commissioner felt that proper enquiry was not made by the AO during assessment proceedings, he was justified in invoking provisions of Section 263 in respect of the order passed by the AO. Similarly, in the case of Gee Vee Enterprises Vs. Addl. CIT report in 99 ITR 375(Del), the Hon'ble Court has held that the Commissioner can regard the order of the AO as erroneous on the ground that, in the circumstances of the case, the AO should have made further enquiries before accepting the statement filed by the assessee. In the instant case, on the issue pointed out in show cause notice proper enquiries and verifications were not made by the AO. Because of such failure on the part of the AO, the order passed by him is considered to be erroneous as well as prejudicial to the interests of revenue. As held by various courts in the cases mentioned above, the Pr.Commissioner of Income Tax can regard an order as erroneous on the ground that in the circumstances of the case, the AO should have made further enquires before accepting the statements given by the assessee in his return. In view of the above, the assessment order framed u/s.143(3) rws 153A of the I.T.Act, 1961 on 28.03.2013 for being erroneous in so far as the same is prejudicial to the interest of revenue is hereby set aside to the 'Assessing Officer for fresh adjudication of facts and proper application of law in fresh assessment proceeding after giving proper opportunity to the assessee. The Assessing Officer has to call for audited books of account relating to the financial year: 2007-08, relevant to A.Y.2008-09 and examine the genuineness of claim of addition of power plant and claim of depreciation

8 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. thereon. On the basis of such examination of facts, fresh finding has to be recorded for the A.Y.2008-09.” 6. After receipt of the order of the Ld. Pr. CIT, the AO issued notice u/s 142(1) of the Act on 01.05.2015 to ascertain whether the depreciation claimed by the assessee is correctly charged or not, in support of questionnaire the assessee furnished reply and stated that the project was started production before 31.03.2008 and accordingly the assessee is eligible for depreciation on the plant and machinery AS PER SECTION 32(1) OF THE Act. During the course of assessment proceedings, the assessee produced a copy of letter dated 24.11.2015 issued by the Superintending Engineer (Project)-Cum-Electrical Inspector, Circle No. 1, Baniapat Keonjhar evidencing that the power plant was commissioned on 10.03.2008. In this connection, a letter was issued to the Superintending Engineer (Project)-Cum-Electrical Inspector, Circle No. 1, Baniapat ((Siripur Road), Keonjhar seeking confirmation that the power plant was commissioned on 10.03.2008 as mentioned vide letter dated 24.11.2015, which was produced by the assessee. During the course of hearing, in response the Superintending Engineer (Project)-Cum-Electrical Inspector, Keonjhar vide letter No. 419, dated 27.02.2016 stated that the date of commission of 10MW power plant on M/s Deepak Steel and Power Ltd., Topaihi , Guali, Distt: Keonjhar was on 02.12.2009. In view of the above confirmation by Superintending Engineer (Project)-Cum-Electrical Inspector a show

9 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. cause notice was issued dated 02.03.2016 to explain why the depreciation claim for power plant for AY 2008-09 and 2009-10 should not be disallowed as the machineries were not put to use in AYs 2008- 09 and 2009-10. In this regard, the assessee furnished reply on 09.03.2016 stating as under:

“In view of the above, the assessment order framed U/s.143(3) r.w.s.153A of the I.T. Act, 1961 on 28-03-2013 for being erroneous in so far as the same is prejudicial to the interest of revenue is hereby set aside to the Assessing Officer for fresh adjudication of facts and proper application of law in fresh assessment proceeding after giving proper opportunity to the assessee. The Assessing Officer has to call for audited books of account relating to the fin.yr.2007-08 relevant to the Asst. Yr. 2000-09 and examine the genuineness of claim of addition of power pleat and claim of depreciation thereon. On the basis of-such examination of Rets, fresh finding has to be recorded for the Asst. Yr. 2008-09." 7. From the above submissions, the AO was not satisfied and he strictly rely on the letter issued by Superintending Engineer (Project)- Cum-Electrical Inspector, Keonjhar vide letter No. 419, dated 27.02.2016 which reveal that the power plant was commissioned on 02.12.2019 and it was not put to use for the relevant & subsequent assessment year. Accordingly, he disallowed the depreciation claimed of Rs. 15,58,38,049/- and income was assessed at Rs. 82,18,48,200/- and passing the order u/s 263/143(3) of the Act on 23.03.2016 without referring to any seized material and without obtaining approval u/s 153D of the Act.

10 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. various grounds and later on the assessee also filed revised grounds of appeal, the grounds of appeal taken by the assessee before the Ld. CIT(A) is as under:

“1. That the A.O was wrong in passing order u/s 263/143(3) of the I. Tax Act whereas the original assessment was completed u/s 143(3) read with 153A dt 28.03.2013 As such, the order passed u/s 263/143(3)/153A of the I. Tax Act without the prior approval of the Jt. Commissioner of I. Tax u/s 153D of the L. Tax Act, makes the assessment order is bad in law which needs to be cancelled/quashed. 2. That the A.O was wrong in disallowing depreciation on the power plant amounting to Rs.15,58,38,049/- based on misconception of facts that power plant has not been put to use during the Financial Year. The plant was put to use is evident from commission certificate from turbine manufacturer, one boiler supplier as well as Inspector report of OSPCB. Hence, the A.O may be directed to allow the depreciation on the power plant during the year, which has been correctly claimed by the assessee but wrongly disallowed by the AO. 3. That the A.O was wrong in charging interest u/s 2348 & 234C of the I Tax Act. 4. That the A.O was wrong in initiating penalty proceedings u/s 271(1)(c) of the 1. Tax Act. 5. That the assessee craves to leave, add, alter, amend or withdraw any ground of appeals or appeal before or at the time of hearing." 2.3 Revised Grounds of Appeal: 2.3.1 It is seen that vide submission dated 8.08.2025 submitted on 14.08.2025, the appellant has filed Revised Grounds of Appeal and requested their admittance. The appellant has stated that these revised grounds of appeal replace the original grounds of appeal filed. The Revised Grounds of appeal are reproduced as under: (A). Additional legal and jurisdictional grounds of appeal: "1. That based on facts and circumstances of the case and in law, the AO erred in making addition of Rs. 15,58,38,049/- on account of depreciation under the 1. Tax Act, 1961 claimed for on Power Plant being kept for use in the revision effect order dated 23/03/2016 us. 263 r.w.s 143(3)/1534 relying upon the revision order passed by the Pr.CIT. Sambalpur u/s 263, dated 25/02/2015 without considering the legal principle that in absence of incriminating materials unearthed by the search team no addition can be made in the case of Court binding decision in the case of "Pr.CIT Vs. Abhisar Buildwell (P) Ltd [2023] unabated completed assessments and having regard to the ratio of the Supreme

11 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. 454 ITR 212 (SC)", thus it is prayed that the addition of Rs. 16,58,38,049/- may kindly to deleted in full. 2. That without prejudice to the grounds of appeal no 1 raised above, that based on facts and circumstances of the case and in law, the AO erred passing the revision effect order, dated 23/03/2016 u/s 263 r.w.s 143(3)/153A relying upon the revision order u/s 263 dated 25/02/2015 passed by the Pr.CIT, Sambalpur by reviewing/revising the assessment order, dated 28/03/2013 passed u/s 153A/143/3), which itself is invalid and bad in law, having regard to the legal principles that in absence of incriminating materials unearthed by the search team no addition can be made in the case of unabated/completed assessments pronounced by the Supreme Court in the case of "Pr CIT Vs. Abhisar Buildwell (P) Ltd (2023) 454 ITR 212 (SC)", thus the assessee prays that revision effect order, dated 23/03/2016 u/s 263 r.ws 143(3)/153A passed by the AO may kindly be quashed 3. Without prejudice to the grounds of appeal no. 182 raised above, that based on facts and circumstances of the case and in law, the AQ erred passing the revision effect order, dated 23/03/2016 w/s.263 r.w.s 143(3)/153A relying upon the revision order u/s 263 dated 25/02/2015 passed by the Pr. CIT, Sambalpur by reviewing/revising the assessment order, dated 28/03/2013 passed u/s. 153A/143(3), which it self is invalid and bad in law, having regard to the legal principles that the search assessment order passed u/s. 153A r.w.s 143(3) after taking approval from the Addi CIT cannot be subject matter of revision u/s.263 as the approval of the Add.CIT was not revised by the Pr.CIT, thus the assessee prays that revision effect order, dated 23/03/2016 u/s.263 143(3)/153A passed by the AO may kindly be quashed" (B) Revised/Replaced grounds of appeal on facts and merits of the case 4. That based on facts of the case and provisions of law AO erred in passing revision effect order u/s. 263/143(3) rw.s 153A, dated 23/03/2016 by making addition of Rs. 15.58,38,049/-on account of depreciation under the 1. Tax Act. 1961 claimed for on Power Plant u/s 32 being kept for use under the concept of passive use, thus the assessee prays that the addition of Rs. 15,58,38,049/- may kindly be deleted in full. 5. That without prejudice to the grounds of appeal no.3 raised above, that based on facts of the case and provisions of law AO ered in passing revision effect order u/s, 143(3)/263 r.ws 153A dated 23/03/2016 by making the deduction of Rs 15.58.38,049/- an account of depreciation u/s 32 of the 1.T Act, 1961 claimed on Power Plant under the concept of passive use/ready for use and accepting the capitalized value including allowing the depreciation in later years when the asset was actually used, thus the AO is just making deferment of allowability of the depreciation which in fact is revenue neutral, accordingly the assessee prays that the addition of Rs. 15.58,38.049/-may kindly be deleted in full 6. That the assessee craves leave to add, alter, replace, amend, delete either all or any of the grounds of appeal at the time of final hearing with the permission of the CIT(A)"

12 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. (B). Revised/Replaced and additional legal and jurisdictional grounds of appeal raised above by the assessee are emanating from revision effect order and connected orders including from the records available before the CIT (A) and all the issues are raised before the AO during the assessment/consequential proceedings. (C). That in the absence of admission of above revised and additional grounds of appeal, the assessee may suffer irreparable loss. (D) Sec 251(1)(a) has given wide power to CIT(A) to accept the revised and additional grounds of appeal raised during the course of hearing before him. The power of the CIT(A) is co-terminus with that of AO, the CIT(A) can do every thing which the AO can do during the assessment proceedings. Accordingly having regard to the ratio of the decisions of the Hon'ble Supreme Court in the case of CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 (SC), Addl CIT v Gurjargravures (P) Ltd (1978) 111 ITR 1 (SC), Jute Corpn. of India Ltd Vs CIT [1991] 187 ITR 688 (SC), it is humbly prayed before the CIT(A) to admit and adjudicate the revised/replaced grounds of appeal.”

ITA No. 578/CTK/2025 2.2 Grounds of Appeal: The Grounds of Appeal filed by the appellant are as under: Grounds of appeal 1) That the A.O was wrong in passing order u/s 263/143(3) of the I. Tax Act whereas the original assessment was completed u/s 143(3) read with 153A dt. 28.03.2013. As such, the order passed u/s 263/143(3)/153A of the I. Tax Act without the prior approval of the Jt Commissioner of I. Tax u/s 153D of the Tax Act, makes the assessment order is bad in law which needs to be cancelled/quashed 2) That the A.O was wrong in passing order u/s 263/143(3) of the I. Tax Act 1.23.03.2016 based on the order u/s 263 dt. 25.02.2015 which set aside the order passed u/s 153A/143(3) dt. 28.03.2015, which does not exist on the date of initiation/passing of order u/s 263 on 25.02.2015, as the same was merged with the order u/s 147/143(3) dt. 30.06.2014. As the base of setting aside of non-existing order by the Ld. CIT is bad in law, the consequential order passed u/s 263/143(3) dt. 23.03.2016 is also bad in law which needs to be quashed. 3) That the A.O was wrong in disallowing depreciation on the power plant amounting to Rs.1 8,87,82,513/- based on misconception of facts that power plant has not been put to use during the Financial Year The plant was put to use is evident from commission certificate from turbine manufacturer, one boiler supplier as well as Inspector report of OSPCB. Hence, the A.O may be directed to allow the depreciation on the power plant during the year, which has been correctly claimed by the assessee but wrongly disallowed by the Α.Ο.

13 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. 4) That the A.O was wrong in charging interest u/s 234B of the I. Tax Act 5) That the A.O was wrong in initiating penalty proceedings u/s 271(1)(c) of the 1. Tax Act 6) That the assessee craves to leave, add, alter, amend or withdraw any ground of appeals or appeal before or at the time of hearing." 2.3 Revised Grounds of Appeal: 2.3.1 is seen that vide submission dated 8.08 2025 submitted on 14.08.2025 the appellant has filed Revised Grounds of Appeal and requested their admittance The appellant has stated that these revised grounds of appeal replace the original grounds of appeal filed The Revised Grounds of appeal are reproduced as under (A) Additional legal and jurisdictional grounds of appeal. 1. That based on facts and circumstances of the case and in law, the AO erred in making addition of Rs 18,87,82,513/- on account of depreciation u/s 32 under the 1. Tax Act, 1961 claimed for on Power Plant being kept for use in the revision effect order, dated 23/03/2016 u/s 263 r.w.s 143(3)/153A relying upon the revision order passed by the Pr.CIT, Sambalpur u/s. 263, dated 25/02/2015 without considering the legal principle that in absence of incriminating materials unearthed by the search team no addition can be made in the case of unabated/completed assessments and having regard to the ratio of the Supreme Court binding decision in the case of "Pr CIT Vs. Abhisar Buildwell (P) Ltd [2023] 454 ITR 212 (SC) thus it is prayed that the addition of Rs. 18,87,82,513/- may kindly be deleted in full 2 That without prejudice to the grounds of appeal no 1 raised above, that based on facts and circumstances of the case and in law, the AO erred passing the revision effect order, dated 23/03/2016 u/s 263 r.w.s 143(3)/153A relying upon the revision order u/s 263 dated 25/02/2015 passed by the Pr.CIT, Sambalpur by reviewing/revising the assessment order, dated 28/03/2013 passed u/s 153A/143(3), which it self is invalid and bad in law, having regard to the legal principles that in absence of incriminating materials unearthed by the search team no addition can be made in the case of unabated/completed assessments pronounced by the Supreme Court in the case of "Pr.CIT VS. Abhisar Buildwell (P.) Ltd (2023) 454 ITR 212 (SC)", thus the assessee prays that revision effect order. dated 23/03/2016 u/s.263 r.w.s 143(3)/153A,passed by the AO may kindly be quashed 3. Without prejudice to the grounds of appeal no 1&2 raised above, that based on facts and circumstances of the case and in law, the AO erred passing the revision effect order, dated 23/03/2016 u/s.263 r.w.s 143(3)/153A relying upon the revision order u/s 263 dated 25/02/2015 passed by the Pr.CIT, Sambalpur by reviewing/revising the assessment order, dated 28/03/2013 passed u/s. 153A/143(3), which it self is invalid and bad in law, having regard to the legal [04:54, 5/21/2026] Alindra: principles that the search assessment order passed u/s 153A r.w.s 143(3) after taking approval from the Add! CIT can not be subject matter of revision u/s 263 as the approval of the Add.CIT was not revised by the Pr.CIT, thus the assessee prays that revision effect order, dated

14 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. 23/03/2016 u/s 263 r.w.s 143(3)/153A. passed by the AO may kindly be quashed" (B) Revised/Replaced grounds of appeal on facts and merits of the case. 4. Thal based on facts of the case and provisions of law AO erred in passing revision effect order w/s. 263/143(3) r.w.s 153A, dated 23/03/2016 by making addition of Rs.18,87,82,513/-on account of depreciation under the I. Tax Act, 1961 claimed for on Power Plant u/s 32 being kept for use under the concept of 'passive use', thus the assessee prays that the addition of Rs. 18,87,82,513/-may kindly be deleted in full 5. That without prejudice to the grounds of appeal no.3 raised above, that based on facts of the case and provisions of law AO erred in passing revision effect order u/s.143(3)/263 r.w.s 153A dated 23/03/2016 by making the deduction of Rs. 18,87,82.513/-on account of depreciation u/s 32 of the IT Act, 1961 claimed on Power Plant under the concept of 'passive use/ready for use and accepting the capitalized value including allowing the depreciation in later years when the asset was actually used, thus the AO is just making deferment of allow ability of the depreciation which in fact is revenue neutral, accordingly the assessee prays that the addition of Rs. 18,87,82,513/-may kindly be deleted in full. 6. That the assessee craves leave to add, alter, replace, amend, delete either all or any of the grounds of appeal at the time of final hearing with the permission of the CIT(A)" (B). Revised/Replaced and additional legal and jurisdictional grounds of appeal raised above by the assessee are emanating from revision effect order and connected orders including from the records available before the CIT (A) and all the issues are raised before the AO during the assessment/consequential proceedings.”

15 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. the submission made before the lower authorities and strongly contested that the case was selected for scrutiny u/s 143(3) of the Act and assessment order was passed on 31.12.2010 u/s 143(3) of the Act on the date of search conducted on 01.03.2011, there no assessment was pending, therefore, this year is a abated assessment year and during the course of search and seizure operation no any incriminating documents were found and seized even on during the course of proceeding for search assessment while completing the assessment order by the AO u/s 143(3) r.w.s. 153A of the Act dated 28.03.2013. The AO has not made any addition on the basis of any incriminating material or any incriminating material has been referred. only there is addition made u/s 40(a)(ia) of the Act for non deduction of TDS u/s 194A of the Act. This drawback was not found during the course of search and there was no any documents were unearthed in this regard. During the course of search assessment the AO found that here was violation of section 40(a)(ia) of the Act. for non deducting of TDS on interest payment to SERI International Financial Ltd. towards the interest paid on loan. He further submitted that as per the grounds of appeal taken before the Ld. CIT(A), the Ld.CIT(A) has not decided the issue raised before him properly. He further submitted that the revisionary power exercised by the Ld. Pr.CIT is also wrong since the issue raised by the Ld. Pr.CIT and show cause notice is also not emanating from the any documents found during the

16 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. course of search. He strongly supported the order of Hon’ble Apex Court in the case of Pr.CIT Vs. Abhishar Buildwell Pvt. Ltd. reported in (2023) 454 ITR 212 (SC) and submitted that without any incriminating material no addition can be made in case of completed assessment. Accordingly, the Ld. Pr.CIT was not justified in invoking the power u/s 263 of the Act even the Ld. Pr.CIT has also not referred to any materials found during the course of search. He did not referred to any incriminating documents unearthed during the course of search proceedings and he should not exercise the revisionary power u/s 263 of the Act against the order passed by the AO 143(3) r.w.s. 153A of the Act. He further submitted that the entire machinery installed were not doubted and the machinery was ready for use before the end of the relevant assessment years. Accordingly, the assessee was eligible for depreciation and he also relied on the completion certificate issued by boiler installer, the certificate is placed on record. The Ld. Counsel further submitted that the assessee raised in legal ground before the Ld. CIT(A) (noted supra) which has not been properly appreciated by the Ld. CIT(A) and submitted that the Ld. Pr.CIT has not disturbed the approval granted by the Ld. Joint commissioner of Income Tax u/s 153D of the Act which is mandatory to exercise the revisionary power exercised. He further submitted that while passing order u/s 143(3) r.w.s. 263 dated 23.03.2016 of the Act the AO has not obtained approval under section 153D of the Act since it is a

17 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. continuation of the assessment proceeding in pursuance of notice u/s 153A of the Act therefore, the Ao has not followed the mandatory requirement as per the Income-tax Act to obtain approval from the JCIT, therefore, the order passed by the AO is non-est in the eyes of law. He relied on number of cases and filed written submission in support of arguments for both the years which are as under:.

18 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

19 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

20 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

21 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

22 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

23 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

24 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

25 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

26 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

27 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

28 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

29 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

30 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

31 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

32 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

33 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

34 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

35 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

36 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

37 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

38 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

39 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

40 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

41 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

42 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

43 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

44 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

45 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

46 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

47 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

48 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

49 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

50 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

51 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

52 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

53 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

54 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

55 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

56 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

57 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

58 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

59 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

60 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

61 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

62 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

63 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

64 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

65 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

66 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

67 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

68 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

69 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

70 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

71 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

72 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

73 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

74 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

75 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

76 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. 12. On the other hand, the Ld. DR relied on the order of lower authorities and submitted that the Ld. Pr.CIT has rightly exercised his revisionary powers and while giving effect the direction of Ld. Pr.CIT u/s 263 of the Act, the AO obtained confirmation from the Superintending Engineer (Project)-Cum-Electrical Inspector vide his letter dated 27.02.2016 the plant was commissioned on 02.12.2009, therefore, the depreciation claimed by the assessee is not as per the provisions of section 32 of the Act which is erroneous and prejudicial to the interest of the revenue. Further, in respect of incriminating documents as contested by the Ld. Counsel that the during the course of search no any incriminating documents unearthed and it is abated assessment to verify the submission of the Ld. Counsel the Ld. CIT DR sought time for production of the incriminating documents and case was adjourned as per his choice. Accordingly, the case was adjourned to 16.04.2026 and he ensured that he would file report from the lower authorities regarding incriminating documents found during the course of search. On the scheduled date of hearing on 16.04.2026 the adjournment petition was filed by the Ld. DR which is as under:-

77 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd.

78 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. 13. Since, during the course of previous hearing on 13.04.2026 the Ld. CIT DR sought time and ensured to file report from the lower authority by 16.04.2026 regarding incriminating documents but the Ld. DR as per the above adjournment later sought time for one month and this adjournment petition was brought into the knowledge of the Ld. Counsel. The Ld. Counsel stated that he would not press the earlier arguments regarding incriminating documents was/were not found during the course of search and he stated that he would argue on the ground No. 3 and additional ground No. 02 noted supra.

79 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. of the Act without revising the approval granted u/s 153D of the Act by the Ld. JCIT and he further submitted that in case of order passed by the .AO u/s 263/143(3) of the Act dated 23.03.2016 there is no approval taken from the Ld. JCIT since it is a continuous process of the search assessment relating to issue of notice u/s 153A of the Act.

80 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. 16. We further noted that the assessee filed appeal before the ITAT, Cuttack against 263 order passed by the Ld. Pr.CIT for both the years with a delay of 3789 days, filed before the ITAT were dismissed vide order dated 01.12.2025 in ITA No. 551-553/CTK/2025 holding that the assessee had no sufficient “cause” to explain the condone of the delay and delay was not condoned and dismissed the appeal. We noted that the issue raised by the assessee on similar footing before the Ld. CIT(A) as well as the ITAT and order of the Ld. CIT(A) dated 02.09.2025 has been challenged before us , therefore, we take up for adjudication to both the issues raised before us. Ground No. 3 from the original grounds are covered by the various judgments, we observe from the judgment of the coordinate Bench, ITAT, Delhi in the case of Abha Bansal Vs. PCIT, Central (Gurgaon) reported in (2021) 132 taxmann.com 231 (Del-Trib.) in ITA No. 383-386/Del/2021, order dated 31.05.2021 in which it has been held that the order of assessment order passed u/s 153A r.w.s. 143(3) of the Act after getting the approval from JCIT could not be revised u/s 263 of the Act. The relevant para is as under:

“9.4. It is evident from the plain reading of the aforesaid Explanation that an Order passed on or before or after 1st Day of June, 1988 by the A.O. shall include (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or Commissioner authorised by the Board

81 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. in this behalf under section 120. It may be noted that Order of assessment passed with the approval of JCIT under section 153D of the I.T. Act, 1961 could not be revised under section 263 of the I.T. Act, 1961. The Ld. D.R. has, however, relied upon the Order of ITAT, Panaji Bench, but, has not explained whether the Judgment of Hon’ble Allahabad High Court in the case of CIT vs., Dr. Ashok Kumar (supra) or different Benches of the Tribunal have been considered in this case by the Panaji Bench. It is not decided in this case that assessment order cannot be revised without revising the approval under section 153D of the I.T. Act and Explanation-1 to Section 263 of the I.T. Act has also not been considered. Therefore, this decision relied upon by the Ld. D.R. would not apply to this case. Further the Judgment in the case of Param Transport Pvt. Ltd., of Hon’ble Chattisgarh High Court (supra) is not with regard to approval obtained under section 153D of the I.T. Act because in this case it was held that revisional power under section 263 of the I.T. Act is applicable to assessments under search and seizure. However, it is not explained by the Ld. D.R. whether in this case the approval under section 153D have been revised by the Learned PCIT. It may also be noted that it is well settled Law that if two views are possible, then the view which is in favour of the assessee should be made applicable. We rely upon Judgment of Hon’ble Supreme Court in the case of CIT vs., Vegetable Products 88 ITR 192 (SC). It may also be noted here that the Hon’ble Allahabad High Court is one of the jurisdictional High Court of Delhi Bench, therefore, preference shall have to be given to the Judgment of the Hon’ble Allahabad High Court as reproduced above. In the totality of the facts and circumstances of the case and following the decisions referred to above, we are of the view that the Learned PCIT was not having jurisdiction to proceed under section 263 of the I.T. Act, 1961 in the matter in issue and as such the Order passed by the Learned PCIT is nullity and void abinitio. We therefore, decide this issue in favour of the assessee. 17. Similarly, Hon’ble Madhya Pradesh High Court had decided and observed that the order of assessment passed u/s 153A r.w.s. 143(3) after getting approval of Ld. JCIT could not be revised u/s 263 of the Act in the case of PCIT Vs. Prakhar Developers (P). Ltd. reported in (2024) 162 taxmann.com 48 (Madhya Pradesh) in which it is held as under:

“07. Learned counsel for the appellant failed to answer the query made by this Court whether order passed by the Pune Bench in the case of Ramamoorthy Vasudevan (supra) was challenged before the High Court or Supreme Court on the issue of jurisdiction under Section 263 of the Act. Learned counsel submits that she could not lay her hands any order / judgment passed by the High Court as well as by the Supreme Court on this issue. In the case of Ramamoorthy Vasudevan (supra), in a similar facts and circumstances, reliance has been placed on judgments delivered by the Pune Bench of Tribunal in the case of Dhariwal Industries Limited v/s CIT (ITA No.1108 to 1113/PUN/2014), Lucknow Bench in the case of Mehtab Alam v/s ACIT (ITA

82 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. Nos.288 to 294/Lkw/2014), Hyderabad Bench of the Tribunal in the case of CH. Krishna Murthy v/s ACIT (ITA No.766/Hyd/2012) and one of the judgment passed by the High Court of Judicature at Allahabad in the case of CIT v/s Dr. Ashok Kumar (ITA No.192 of 2000) and Hyderabad Bench of Tribunal in the case of M/s Trinity Infra Ventures Limited v/s DCIT (ITA No.584/H/2015) and consistently held that once the order under Section 143(3) r/w section 153A of the Act has been passed after taking prior approval of the ACIT under Section 153D of the Act, then the jurisdiction under Section 263 of the Act cannot be invoked. Therefore, the view taken by the Co-ordinate Bench of the Appellate Tribunal had attained finality. Hence, the ITAT, Indore has not committed any error of law by following the same view.” 8. Even otherwise, as per section 263 of the Act, the Principal Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act and if he considers that any order passed therein by the Assessing Officer, is erroneous in so far as it is prejudical to the interests of the Revenue, he may make enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. For passing any order under sections 143(3) & 153A of the Act, prior approval of Joint Commissioner is required under section 153A of the Act, or Principal Commissioner or Commissioner as the case may be. Therefore, once prior approval had already been taken by the Assessing Officer and accepted the return submitted by the assessee, then the same authority cannot exercise the power under Section 263 of the Act to reverse the order of Assessing Officer. 18. Further, we noted that in the case of Gyan Infrabuild Pvt. Ltd. Vs. PCIT (Central) in ITA No. 175 to 178/Pat/2023, order dated 13.05.2024 reported in (2024) 162 taxmann. 664 (Pat-Trib) in which it has been held that the revisionary power u/s 263 of the Act cannot be exercised in order to assessment framed u/s 153A/143(3) after getting approval u/s 153D of the Act without revising order u/s 153D of the Act in which it has been held as under:

“32. Thus, in the light of the settled judicial precedents referred supra and on our examination of the facts of the case including the enquiries conducted by the ld. Assessing Officer regarding the transactions carried out during the impugned year as well as examining the seized material, and then getting necessary approval u/s 153D of the Act and also observing that the ld. Pr. CIT did not make any specific enquiry prior to assuming jurisdiction, find the impugned revisionary proceedings as bad in law and deserves to be quashed on account of the following:- ]

83 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. a) that when there is an approval u/s 153D of the Act, it has been held consistently by the Hon’ble Courts (referred supra) that revisionary power u/s 263 of the Act cannot be exercised. b) even otherwise, without revising the order u/s 153D of the Act, and finding them to be erroneous and prejudicial to the interest of the revenue, revisionary powers cannot be invoked for the assessment order framed u/s 153A/143(3) of the Act after getting approval u/s 153D of the Act. c) that when the ld. Assessing Officer has conducted detailed enquiry, examined the seized records, made necessary observations in the assessment order, referred to various statements filed by the assessee and having taken one of the legally permissible view, then in such circumstances, the revisionary powers cannot be exercised just on the ground that adequate enquiry has not been done. d) that revisionary proceedings cannot be held to be justified unless ld. Pr. CIT had carried out independent enquiry specifically dealing with the details in his possession, for the issues raised in the show cause notice u/s 263 of the Act. e) that when the Assessing Officer, based on his observations and examination of records had made addition in the hands of another assessee, the ld. Pr. CIT without revising the assessment order of other assessee, which has been framed by the same Assessing Officer cannot revise the assessment order in the case of the assessee and directing to make the additions as the same would tantamount to double addition. f) that the finding on merit of the ld. Pr. CIT contains various mistakes as the documents referred are not for the assessment year in dispute and some of the documents are not belonging to the assessee. 33. Thus, in view of our discussion (supra) and our examination of the facts, as the order of the Assessing Officer is neither erroneous nor prejudicial to the interest of revenue, there was no scope for the ld. Pr. CIT to revisit the order of the ld. Assessing Officer. Therefore, the impugned order u/s 263 of the Act is quashed and assessment order framed u/s 153A/143(3) of the Act dt. 26/03/2022, is restored. The effective grounds raised by the assessee are hereby allowed for Assessment Year 2015-16. As discussed earlier, our decision for Assessment Year 2015-16 quashing the order u/s 263 of the Act is applicable mutatis mutandis to the appeals of the assessee for Assessment Year 2016-17 to 2018-19.” 19. Respectfully following the above judgments, we also hold that the revisionary order passed by the Ld. Pr.CIT is not tenable and order passed u/s 143(3)/153A dated 28.03.2013 of the Act is restored.

84 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. 20. Further, in respect of additional ground No. 2 raised by the assessee (noted supra), a similar issue has been decided by the coordinate Bench of the ITAT, New Delhi in ITA No. 2407 to 2411/Del/2018 and 8283/Del/2019 for the AY 2001-02 to 2005-06 and 2006-07 and identical issue raised in these appeals before the co-ordinate bench in respect of the order passed by the AO u/s 263/143(3) of the Act dated 23.03.2016. For the sake of convenience, we reproduce the decisions of the coordinate Bench. The relevant part of the decision is as under:-

“16 . The assessee has also raised admission of additional grounds of appeal which as under: “a) That on the facts and circumstances of the case and in law, the Impugned Order dated 19.12.2011 is bad in law and is a nullity since the Assessment was framed under a wrong section i.e . section 263/143(3) whereas it should have been passed u/s 153A/263 r.w.s. 143(3) of the IT Act. b) That on the facts and circumstances of the case and in law , the Impugned Order dated 19.12.2011 passed by the Assessing Officer u/s 263/143(3) of the IT Act in consequence to the Order passed u/s 263 of the IT Act is bad in law and is non- est since the Assessing Officer did not take the necessary approval from his superior officer (JCIT/Addl. CIT) in accordance with the provisions of section 153D of the IT Act. Since no approval u/s 153D was taken before passing the impugned assessment order it was not mentioned in the body of assessment order.” 17. Admission of the additional grounds has been opposed in principle by the ld. DR. Keeping in view , the judgment of the Hon’ble Apex Court in the case of National Thermal Power Co . Ltd . Vs. CIT (1998) 229 ITR 383, the additional grounds filed by the assessee is accepted. The relevant portion of the judgment is as under: “5. Under Section 254 of the Income-tax Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time , so long as the relevant facts are on

85 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. record in respect of that item. We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income tax (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross objections before the Tribunal . We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. 6. In the case of Jute Corporation of India Ltd . v . C.I.T . . this Court, while dealing with the powers of the Appellate Assistant Commissioner observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitation if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter . There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also . 7. The view that the Tribunal is con fined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view o f the powers of the Appellate Tribunal [vide, e.g., C.I.T, v . Anand Prasad (Delhi), C.I.T. v . Karamchand Premchand P. Ltd . and C.I.T . v . Cellulose Products of India Ltd . . Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised . But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. 8. The reframed question , therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits.” 18. Respectfully following the above judgment of the Hon’ble Apex Court, the additional grounds taken up by the assessee are hereby admitted . 19. Having admitted , we have gone through the order of the ld . CIT(A) on this issue . Reference is invited to the order of the ld . CIT(A)-42 dated 26.08 .2019

86 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. for the A.Y . 2006-07. For the sake of brevity, the relevant portion o f the ld . CIT(A) on this issue is reproduced as under: “ 8 .1 The appellant has raised additional ground of appeal which is legal in nature. As per the appellant , the Impugned order dated 26 .11.2010 passed by the Assessing Officer U/s 263/143(3) of the I.T. Act in consequence to the order passed U/s 263 of the I .T. Act is bad in law and is non-es t because the Assessing Officer did not take the necessary approval from his superior office (JCIT/Addl CIT) in accordance with the provision of section 153D of the I.T. Act . The appellant made reference to the assessment order and pointed out that the fact of approval U/s 153D has not mentioned in the body o f assessment order. 8 .2 In this regard , the information in respect of the fact of approval of JCIT/Addl . in accordance with the provision of section 153D of I.T. Act , was called for from office of ACIT, Central Circle-13 , New Delhi vide letter dated 19/09/2018 & reminder vide letter dated 29/11/2018 . However , it has been informed by ACIT, Central Circle13 , Delhi vide letter dated 19/12/2018 , that all relevant documents in this regards were sent to office of Pr . CIT, Central -02 , New Delhi vide letter No .139 dated 03 .05 .2013. 8 .3 The matter was also referred to the office of Principal Commissioner of Income Tax , Central-II, New Delhi in this regard vide letter dated 02 .07 .2019 & 06 .08 .2019 . However, no response has been received till date. Since the appeal is pending in this case for more than 3 years , therefore, a s per CBDT directive, it is to be decided on priority . 8 .4 As regards the relevance of approval of JCIT under section 153D o f the act is med. I find that the facts of the present case are distinguishable with reference to the normal case of search assessment where prior approval under section 153D is required. It is because in this case, the assessment order under section 153A/143(3) was passed on 31 .12 .2008 . The same order was passed after taking necessary approval as per the provision of section 153D of the act . Thereafter, Ld . CIT(Central-II), Delhi passed order under section 263 of the act on 24 .12 .2010 where the AO was asked to frame the assessment afresh based on the issues flagged in the order u/s 263 of the act . Therefore, it is a case where the AO has followed the instructions of Ld . CIT (Central - II) as per order under section 263 o f the act. In such a case, the prior approval of the assessment of JCIT/Addl . CIT is implicit and not separately required because it is second round of assessment based purely on instructions of authority higher than JCIT/Addl CIT. Accordingly, the additional ground of appeal is dismissed.” 20. From the record , it can be found that the ld. CIT(A) has called for the record from the office of the ACIT , Central Circle13 vide letter and reminders dated 19.09.2018 and 29.11.2018. Even the letters written to the ld. PCIT , Central-II did not evoke any response . Having not received the response from the office of the ACIT and the ld . PCIT, the ld. CIT(A) unsuccessfully tried to salvage the situation holding that the orders passed by the AO are inconsequence to the order

87 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. passed by the ld. PCIT u/s 263 and in such case the prior approval of the assessment by the JCIT/Addl. CIT is implicit and not separately required . The order of the ld . CIT(A) is contradictory in the sense that while the ld. CIT(A) holds that the prior approval of the assessments by the Addl. CIT is “implicit” and at the same time it was held that the approval is “not separately required” as it is second round of assessment based purely on instructions o f authority higher than JCIT/Addl. CIT. 21. The facts are as under: • The search was conducted on 20 .10.2006 • Assessments u/s 153A have been completed in the regular course. • Order of the ld . CIT u/s 263 was dated 24.12.2010 • The order u/s 263 set aside the order of the AO passed u/s 153A with directions to examine the issues. • The issues raised by the ld . CIT like cash deposits and investment in property for A.Y. 2001-02 to A.Y . 2004-05 are found to be without any reference to cash deposits and even in the absence of any cash deposits in the bank account. Once, the order u/s 153A is modified, revised or set aside, the Assessment Order u/s 153A still continues to hold its original character of assessment u/s 153A. • Hence, the order passed in consequence to the order u/s 263 by the ld . CIT/PCIT would partake and continue to be the order u/s 153A. • Being the order passed u/s 153A, the rigors of the provisions u/s 153D follows. • The Section 153D reads as under: “Prior approval necessary for assessment in cases of search or requisition . 153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B , except with the prior approval of the Joint Commissioner: Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner under sub-section (12) of section 144BA .” • Hence, it is mandatory to obtain the approval of the JCIT/Addl. CIT for passing the order u/s 153A even in the case o f orders passed in consequence to the order u/s 263 . • It is borne from the order of the ld . CIT that all the efforts have been made by the ld. CIT(A) to obtain evidences with regard to the documents approving the Assessment Order passed by the Assessing Officer who is below the rant of Joint

88 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. Commissioner could not yield any result. No evidences could be brought even before us . Hence, owing to the provisions of Section 153D, we have no hesitation to hold that the Assessment Orders passed by the Assessing Officer are legally invalid and liable to be quashed. 22. Since, similar issues are involved for the A .Y. 2001-02 to A.Y . 2006-07, the above said ratio is applicable to all the years. 23. In the result, owing to absence of incriminating material found and seized and absence of statutory approval u/s 153D, the appeals of the assessee are hereby allowed.” 21. Similar issue was raised by the assessee before the ld. CIT(A) by way of additional grounds which was dismissed by the Ld. CIT(A) and the same issue is raised before us. The co-ordinate bench has decided the similar issue noted above in favour of the assessee, therefore, respectfully following the above judgment of the coordinate Bench of the Tribunal, we set aside the order passed by the AO u/s 263/143(3) dated 23.03.2016 in which there is no any reference regarding u/s 153D of the Act whereas the order passed u/s 143(3)/153A of the Act dated 18.03.2013, the AO has obtained duly approval from the JCIT, Rourkela Range, Rourkela u/s 143D vide letter No. 3757 dated 28.03.2013 is restored.

89 ITA No. 577 & 578/CTK/2025 Deepak Steel and Power Ltd. 24. Since we have allowed the appeal of the assessee in ITA No. 577/CTK/2025 in above terms and accordingly issues are identical. Therefore, the decision taken in above appeal will apply mutatis mutandis in ITA No. 578/CTK/2025.

To sum up:

Appeal filed by the assessee in ITA No. 577/CTK/2025 for AY 2008- 09 and ITA No. 578/CTK/2025 for AY 2009-10 are allowed in above terms.

Order pronounced on 22.05.2026. Sd/- Sd/- (Sonjoy Sarma) (Laxmi Prasad Sahu) Judicial Member Accountant Member Dated: 22.05.2026 AK, Sr. P.S. Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//True copy// By order

Assistant Registrar, Kolkata Benches