Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI S.S.GODARA
आदेश / ORDER PER S.S. GODARA, JM :
This assessee’s appeal for AY 2011-12 arises against the CIT(A)-6, Pune’s order dated 11-06-2019 passed in case No. PN/CIT(A)-V/ITO.Wd.9(1)/10127/2018-19 involving proceedings under Section 143(3) of the Income Tax Act, 1961 in short the Act.
Delay of 2 days is condoned in light of the assessee’s affidavit dated 10-03-2022 explaining reasons thereof to be neither intentional nor deliberate. The case is now taken up for adjudication on merits therefore.
Heard both sides. Case file perused.
It transpires during the course of hearing that the CIT(A)’s detail discussion in paras 4 to 4.1 has not even adjudicated the assessee’s corresponding section 36(1)(iii) interest disallowance ground of Rs.6,03,781/- for the reason that the instant case involves section 263 proceedings attracting “merger” principle as under :
“4. Before me, Shri Rajendra Khandelwal ITP & AR appeared and the case was heard and discussed. On an examination of the facts before me, I find that the directions of the Hon’ble ITAT setting aside the case back to me for examination on merits, have been rendered infructuous due to certain facts which were not brought to the notice of the Hon’ble ITAT by the assessee in his appeal. I find that the order u/s.143(3) which is subject matter of present appeal, was revised by the PCIT-5, Pune vide his order u/s.263 dtd.11/3/2016. Therein, the same transaction of sale of plots of land at Vadgaon was examined by the PCIT-5, Pune and it was held that the assessment order u/s.143(3) dtd.24/3/2014 (subject of present appeal) is erroneous and prejudicial to interest of revenue. The case was therefore set aside back to the AO for reconsideration. In compliance, the AO passed an order us/143(3) r.w.s.263 wherein, the LTCL of Rs.1,51,164/- was assessed at STCG of Rs.9,33,476/-. In doing so, the AO denied the benefit of indexation granted to the assessee in the original assessment order as also denied the claim of interest amounting to Rs.6,03,781/- as was denied in the original assessment. I further find that the assessee has not filed appeal against the order u/s.263 dtd.11/3/2016 nor against the order u/s.143(3) r.w.s.263 dtd. 19/10/2016. The assessee has not brought the fact of the 263 order and the consequential 143(3) r.w.s.263 order to the notice of the Hon’ble ITAT during his second appeal haring (on 9/5/2018). 4.1 The doctrine of merger would operate in this case and the present order under appeal dtd.24/3/2014 now stands merged with the order u/s.143(3) r.w.s.263 dtd.19/10/2016. It is evident therefore, that the order u/s.143(3) dtd.24/3/2014 which the subject of present appeal is no longer alive as it has merged with the subsequent order u/s.143(3) r.w.s.263. I further find that the issue at hand in the present appeal, i.e. disallowance of interest as expenses from LTCG computation, has once again been denied to the assessee in the order u/s.143(3) r.w.s.263. As the assessee has not filed an appeal against the subsequent order dtd.19/10/2016, the present appeal cannot survive. Based on these facts, the appeal against the original order dtd.24/3/2014 is dismissed as not maintainable. As the appeal itself is not maintainable, there is no cause to consider the merits of the case based on the original as well as the additional grounds filed.”
Mr. Desai could hardly dispute the fact that section 263 revision order in issue has nowhere pointed out anything the impugned interest disallowance. I therefore deem it appropriate to direct the CIT(A) to adjudicate the assesee’s instant sole substantive grievance of section 36(1)(iii) of the Act as completed u/s.250(6) of the Act. Ordered accordingly.
This assessee’s appeal is allowed for statistical purposes in above terms.
Order pronounced in the Open Court on 31st May, 2022.