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Facts
The assessee filed its return for AY 2015-16 and assessment order was passed under Section 143(3). Subsequently, action under Section 263 was taken, and a fresh assessment order was passed. The assessee appealed against the original assessment order before the CIT(A) concerning denial of additional depreciation.
Held
The Tribunal held that the CIT(A) ought to have decided the issue of additional depreciation on merits rather than dismissing the appeal as not maintainable. The appeal was allowed for statistical purposes.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal as not maintainable without adjudicating the issue of additional depreciation on merit, and whether the issue of additional depreciation is relevant after a revised assessment order.
Sections Cited
143(3), 263, 144, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
O R D E R PER RAJPAL YADAV, VP The assessee is in appeal against the order of ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 08.05.2023 passed for assessment year 2015-16. This appeal was filed before the CIT(A) against the assessment
order dated 17.11.2017 passed under Section 143(3) of the Income Tax Act. A.Y. 2015-16 2
With the assistance of ld. Representative, we have gone through the record carefully. It emerges out from the record that assessee has filed its return of income on 30.09.2015 and assessment order was passed under Section 143(3) of the Act on 17.11.2017. Against this assessment order, an appeal was filed before the CIT(A). The ld. Counsel for the assessee pointed out that this appeal was dismissed for want of prosecution and matter was carried in Tribunal who has set aside the issue to the CIT(A) and the CIT(A) decided the appeal by observing as under :
“2. In this case assessment u/s.143(3) of the Act was completed on 17.11.2017. Subsequently an order u/s. 263. dated 24.03.2021 was passed by Pr. Commissioner of Income Tax-1, Chandigarh wherein the matter was set aside to the file of the Assessing Officer to pass fresh order. Thereafter, order u/s.144 r.w.s.263 read with section 144B of the Act was passed on 07.03.2022 against this order another appeal was filed on 31.12.2022, which is pending for adjudication on merits.
DECISION: Once an assessment order is revised by Commissioner of Income Tax/ Pr. Commissioner of Income Tax, the original order loses its existence, consequently no appeal can survive against such order. Therefore, the appeal against order u/s. 143(3) filed on 04.02.2020 is dismissed as not maintainable.”
3. It was brought to our notice that after the assessment
order, action under Section 263 was taken and assessment was set aside by the CIT vide order dated 24.03.2021. The AO has given effect to this order and passed the assessment A.Y. 2015-16 3
order on 27.03.2022. The assessee is in appeal before CIT(A)
against an assessment order dated 27.03.2022 passed under Section 144 read with Section 263 of the Income Tax Act.
The ld. Counsel for the assessee has submitted that against the original assessment order dated 17.11.2017, assessee was aggrieved on account of denial of additional depreciation and that issue was pending before the CIT(A) which ought to have been adjudicated on merit but not adjudicated by the CIT(A) vide its order dated 08.05.2023.
We find that in case the CIT(A) in appeal against the assessment order dated 27.03.2022 finds that assessee is entitled for depreciation, then issue of additional depreciation would revived which assessee was agitating against the original assessment order. Therefore, ld. CIT(A) ought to have not dismissed appeal of the assessee simply by observing that it become redundant (extracted supra). He ought to have decided the issue legally and on merit, whether assessee is entitled for additional depreciation or not. The moment issue regarding depreciation is resolved, then relevancy of additional depreciation would have arisen. A.Y. 2015-16 4 Therefore, we deem it appropriate to set aside the finding of the CIT(A) and restore this issue to the file of AO. The ld. AO shall re-adjudicate the issue after the decision of the CIT(A) on an appeal filed against order dated 27.03.2022. We would appreciate that AO would apprise the CIT(A) for deciding the appeal on merit prior to expiry of the limitation for giving effect to the order of the ITAT.
In view of the above, appeal of the assessee is allowed for statistical purposes.