Loading judgment…
Facts
The Revenue appealed against the CIT(A)'s order which set aside the assessment order. The original assessment was framed under Section 143(3) and later revised under Section 263. A previous appeal to the Tribunal had quashed the Section 263 order.
Held
The Tribunal held that once the Section 263 order was quashed, the Assessing Officer (AO) was divested of powers to pass a fresh assessment order based on it. Therefore, the subsequent assessment order lacked foundation and was rightly quashed by the CIT(A).
Key Issues
Whether an assessment order passed in consequence of a Section 263 order that has been quashed is valid?
Sections Cited
143(3), 263
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
Assessee by : Shri Parikshit Aggarwal, CA and Ms. Shruti Khandelwal, Advocate Revenue by : Shri Rohit Sharma, CIT, DR Date of Hearing : 12.03.2025 Date of Pronouncement : 23.04.2025 HYBRID HEARING O R D E R PER RAJPAL YADAV, VP The Revenue is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 27.05.2024 passed for assessment year 2015-16.
With the assistance of ld. Representative, we have gone through the record carefully. Original assessment was framed under Section 143(3) of the Act on 22.11.2017. This A.Y.2015-16 2 assessment was taken up for revision under Section 263 of the Income Tax Act. The order of the ld. CIT dated 12.03.2021 was challenged before this Tribunal vide ITA No.56/CHD/2021. The Tribunal has quashed that order and allowed the appeal of the assessee.
While giving effect to the 263 order, AO has passed the impugned order which has been set aside by the CIT(A). Once the order passed under Section 263 by the Commissioner is being quashed, then AO is denuded from his powers to pass a fresh assessment order in consonance to the order of the CIT passed under Section 263. Hence, this second assessment order has no foundation to stand. Consequently, this assessment order is to be quashed. Ld. CIT has rightly quashed the assessment order. Accordingly, we dismiss the appeal of the Revenue and upheld the order of ld. CIT(A)
In view of the above, appeal of the Revenue is dismissed.