CITRON INFRAPROJECTS LIMITED ,MUMBAI vs. PCIT CENTRAL -4, MUMBAI

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ITA 2654/MUM/2025Status: DisposedITAT Mumbai17 June 2025AY 2014-15Bench: SHRI OM PRAKASH KANT (Accountant Member), SHRI RAJ KUMAR CHAUHAN ( (Judicial Member)1 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessment order dated 27.02.2021, which was the foundation for the revisionary proceedings under Section 263, had been annulled by a previous ITAT order and had not been stayed by any competent court, the revisionary proceedings ceased to exist. Therefore, the impugned revisionary order passed by the PCIT could not be sustained.

What were the facts?

The assessee originally filed a return which was revised. An assessment order was passed under Section 153A r.w.s. 144. The Principal CIT initiated revisionary proceedings under Section 263 and passed an order. This order was set aside by the ITAT, directing the PCIT to decide afresh after giving the assessee an opportunity of being heard. Subsequently, the PCIT passed another order setting aside the assessment order dated 27.02.2021.

What were the issues?

Whether revisionary proceedings under Section 263 can be sustained when the assessment order forming its basis has been annulled by the Tribunal and not stayed by any higher authority.

Which sections of the Income-tax Act were involved?

Section 153A,Section 144,Section 263,Section 143(3),Section 132,Section 260A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN

For Appellant: Mr. Madhur Agrawal
For Respondent: Mr. R.A. Dhyani, CIT-DR
Hearing: 09/06/2025Pronounced: 17/06/2025

This appeal by the assessee is directed against the revision order dated 25.03.2025 passed by the Ld. Principal Commissioner of Income-tax (Central), Mumbai – 4 [in short ‘the Ld. PCIT’], wherein the assessment order passed u/s 153A r.w.s. 144 of the Income-tax Act, 1961 (in short ‘the Act’) has been set aside. The grounds raised by the assessee are reproduced as under:

1.

The Hon'ble Principal Commissioner of Income Tax (Central)-4 erred in passing an Order u/s 263 of the Income Tax Act (the Act) seeking to revise the Assessment Order u/s 144 r.w.s 153A which was already quashed by the Hon'ble ITAT vide Order dated 30.04.2024 and hence, the impugned order u/s 263 is also liable to be quashed.

2.

Without prejudice to Ground No. 1, the Hon'ble Principal Commissioner of Income Tax (Central)-4 erred in holding that the Assessment Order passed u/s. 144 r.w.s. 153A of the Act is erroneous so far as prejudicial to the interests of the revenue.

3.

Without prejudice to Ground No. 1, the Hon'ble Principal Commissioner of Income Tax (Central)-4 erred in directing the Ld. A.O. to pass fresh Assessment Order u/s. 144 r.w.s. 153A of the Act with respect to an issue which is not based on any incriminating material found during the course of the search. 2. Briefly stated, the facts of the case are as follows: The assessee originally filed its return of income for the relevant assessment year on 30.09.2014, which was subsequently revised on 09.07.2015, declaring a total income of ₹1,18,030/-. The return was selected for scrutiny, and assessment was completed under Section 143(3) of the Act, on 30.12.2016. Subsequently, pursuant to a search and seizure operation conducted under Section 132 of the Act at the premises of the assessee, an assessment under Section 153A read with Section 144 of the Act was framed on 27.02.2021. Thereafter, the learned PCIT, having perused the records, initiated revisionary proceedings and passed an order under Section 263 of the Act on 23.03.2023. However, the said order was set aside by the Income- tax Appellate Tribunal (ITAT) in , with a direction to the PCIT to decide the matter afresh after affording the assessee a reasonable opportunity of being heard. Pursuant thereto, the impugned order was passed by the learned PCIT, wherein the assessment order dated 27.02.2021 was set aside.

3. Before us, the assessee filed a Paper Book containing pages 1 to 490.

4.

We have heard the rival submissions advanced by the learned counsel for the parties and have carefully perused the material available on record. It has been brought to our notice by the learned counsel appearing on behalf of the assessee that the impugned assessment order, which formed the very foundation of the revisionary proceedings under Section 263 of the Act, has been annulled by the Income-tax Appellate Tribunal in pertaining to the assessment year 2014–15, vide order dated 30.04.2024. It was submitted that in light of such annulment, the revision proceedings initiated by the learned Principal Commissioner of Income-tax (PCIT) have become infructuous and deserve to be quashed. Our attention was also drawn to paragraph 3.5 of the impugned order passed under Section 263 of the Act, which records the assessee’s contention as under:

“3.5 Further in the reply, the assessee contended that the assessment order u/s 144 r.w.s. 143(3) against which, the revisionary proceedings have originated, has already been quashed by the Hon'ble ITAT vide the order dated 30.04.2024. Therefore, the present revision proceedings do not survive.

Here, it is relevant to mention that the decision of the Hon’ble ITAT has not been accepted by the Department and further appeal under Section 260A has been filed before the Hon’ble High Court, which is pending.”

4.1 It is evident from the impugned order that the learned PCIT proceeded with the revisionary order under Section 263 solely on the ground that the Revenue has preferred an appeal under Section 260A of the Act before the Hon’ble High Court. However, it is an admitted position that the order of the Tribunal annulling the assessment has neither been stayed nor rendered inoperative by any competent court of law. In such circumstances, the order of the Tribunal holds the field and binds the parties unless and until reversed or stayed by a superior forum. Consequently, the assessment order dated 27.02.2021 having been annulled, the foundation for exercise of jurisdiction under Section 263 ceases to exist. Therefore, the impugned revisionary order passed by the learned PCIT cannot be sustained and is accordingly set aside. Ground No. 1 of the assessee’s appeal is thus allowed.

5.

Insofar as grounds Nos. 2 and 3 are concerned, we find that in view of our findings above, the issues raised therein are rendered academic and do not require adjudication at this stage. Accordingly, those grounds are left open to be decided, if so warranted, in any appropriate future proceedings.

6.

The appeal of the assessee is accordingly allowed.

Order pronounced in the open Court on 17/06/2025.

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