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Facts
The assessee's assessment order passed under Section 153C r.w.s. 143(3) was quashed by the CIT(A) as the proceedings were bad in law due to lack of incriminating material. Subsequently, the PCIT invoked revisionary powers under Section 263, directing a fresh assessment.
Held
The Tribunal held that a revision under Section 263 cannot be invoked against an assessment order that has already been annulled or set aside. The PCIT's revisionary order was deemed null and void due to lack of jurisdiction.
Key Issues
Whether a revisionary order under Section 263 can be passed when the assessment order sought to be revised has already been annulled by the CIT(A)?
Sections Cited
263, 153C, 143(3)
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Income Tax Appellate Tribunal, ‘B’ BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2018-19 Jaideep Halwasiya…...………..……..…………………....Appellant 3rd Floor, P-34, India Exhange Place, Kol-1. [PAN: AAWPH1706L] vs. PCIT (Central), Kol-2….…………....…..………………….…..... Respondent Appearances by: Shri S. K. Tulsian, Advocate, appeared on behalf of the appellant. Shri P. N. Barnwal, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 30, 2025 Date of pronouncing the order : July 31, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal is filed by the assessee against the revisionary order passed by the Ld. Principal Commissioner of Income Tax (PCIT), Kolkata, under Section 263 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), dated 13.03.2025, for A.Y.2018-19, revising the assessment order passed under Section 153C read with Section 143(3) of the Act dated 30.03.2023.
Brief facts of the case are that in the instant case originally completed under Section 153C r.w.s. 143(3) on 30.03.2023, determining the total income of the assessee after certain additions. Subsequently, the Ld. PCIT invoked his revisionary powers under Section 263 and passed an order dated 13.03.2025, directing the Assessing Officer to conduct necessary verification and make a fresh assessment on certain issues, after providing due opportunity of hearing to the assessee. During the course of revision proceedings, the Jaideep Halwasiya assessee brought to the notice of the Ld. PCIT that the very assessment order dated 30.03.2023 (sought to be revised) had already been quashed by the CIT(A) vide order dated 30.08.2024, holding that the proceedings under Section 153C were bad in law, as there was no incriminating material found during search satisfying the jurisdictional requirement under Section 153C. This fact was communicated to the PCIT through letter dated 03.12.2024, well before the passing of the revision order. However, the PCIT proceeded with the revision and passed the impugned order dated 13.03.2025, as if the assessment order still subsisted.
At time of hearing the Ld. Counsel for the assessee submitted that the assessment order dated 30.03.2023 stood annulled by the Ld. CIT(A) vide order dated 30.08.2024. Since the foundation order was no longer in existence, Section 263 could not be invoked and the revision of a non-existent order is without jurisdiction and hence, the impugned revisionary order is bad in law. The Ld AR reliance was placed on the decision of the ITAT Kolkata Bench in the case of Aarti Rai vs. DCIT [2024] 115 ITR (Trib.) (Kol), where it was held that once the original assessment order is set aside, the very basis of revision vanishes.
On the other hand, Ld. Departmental Representative could not controvert the fact that the assessment order dated 30.03.2023 had been quashed by the Ld. CIT(A) on 30.08.2024, prior to the passing of revisionary order dated 13.03.2025 u/s 263 of the Act.
We have carefully considered the submissions of both sides and perused the materials on record. The key issue is whether a revision under Section 263 can be validly exercised in respect of an assessment order that stood annulled before the date of revision. We find that the assessment order dated 30.03.2023, passed under Section 153C r.w.s. 143(3), was specifically quashed by the Ld. CIT(A) vide order dated Jaideep Halwasiya 30.08.2024, on the ground that the jurisdictional requirements under Section 153C were not fulfilled, i.e., there was no incriminating material pertaining to the assessee. This fact was communicated to the Ld. PCIT, yet was not considered in the impugned 263 order. It is settled law that once the assessment order has been set aside or annulled, there remains no effective order to revise under Section 263. The jurisdiction under Section 263 can only be invoked if there is an existing valid assessment order on record. In this regard, we find strength in the coordinate bench decision in the case of Aarti Rai vs. DCIT (supra), where it was held that: “A revision under Section 263 cannot survive when the very order sought to be revised has already been set aside by a competent appellate authority.” 5.1 Accordingly, the impugned revisionary order dated 13.03.2025 passed by the ld. PCIT is null and void, having been passed in respect of an assessment order which was already non-existent. In view of the above discussion and legal position, we are of the considered opinion that the impugned revision order passed under Section 263 is without jurisdiction and unsustainable in law. Accordingly, we quash the impugned order dated 13.03.2025 and allow the appeal of the assessee.
In the result, the appeal filed by the assessee is allowed. Kolkata, the 31st July, 2025.