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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri A. T. Varkey, JM & Dr. A. L. Saini, AM]
ORDER Per Shri A. T. Varkey, JM This appeal preferred by the revenue is against the order of Ld. CIT(A)-3, Kolkata dated 19-12-2018 for assessment years 2010-11. The revenue has raised the following sole ground of appeal:
“1. Whether the Ld. CIT(A) is justified in facts and in law to declare the impugned revision assessment order of the Assessing officer dated 29.01.2016 as non-est and is justified allowing the appeal of assessee against order u/s. 263 in technical ground without justifying the legislative intention of sec. 115JB & 115JAA?”
Briefly stated facts are that the assessee is mainly engaged in the business of operating of ships for carriage of goods. The assessment was completed u/s. 143(3) of the Act on 28.03.2012 determining total income at Rs.28,09,97,170/- against the declared income of assessee Rs.27,96,82,040/-. Later the Ld. CIT initiated the proceeding u/s. 263 of the Act for AYs. 2007-08 to 2010-11 and passed order dated 30.03.2015 with a direction to re-compute the MAT credit for those years and also to reconsider the effect of credit of tax u/s. 115JAA of the Act
Apeejay Shipping Ltd., AY-2010-11 for the subsequent years i.e. AYs. 2008-09, 2009-10 and 2010-11, since according to him, the MAT credit for AY 2007-08 will have cascading effect on the tax payable /refundable for subsequent assessment years. Against this order of ld. CIT u/s 263 dated 30.03.215, the assessee filed an appeal before this Tribunal which was disposed of by the Tribunal in favour of the assessee in 784/Kol/2015 dated 06/.04.2016 and the Tribunal was pleased to cancel the ld. CIT’s order u/s 263 of the Act dated 30.03.2015. The Ld. CIT(A) while passing the impugned order had taken note that the AO’s order stemmed from the order of ld. CIT passed u/s 263 of the Act dated 30.03.2015 which has been already cancelled by the Tribunal, was pleased to cancel the reassessment order passed by AO and allowed the assessee’s appeal. Aggrieved, the revenue is before us.
We have heard rival submissions and gone through the facts and circumstances of the case. At the outset itself, the Ld. Counsel for the assessee submitted that the Ld. CIT(A) has given relief to the assessee taking note that AO’s reassessment order dated 29.01.2016 was passed while giving effect to the order of ld. CIT-3 passed u/s 263 of the Act; and we note that the Tribunal has quashed the order of ld. CIT-3 passed u/s 263; and, therefore, the ld. Ld CIT(A) has been pleased to quash the same. We note that the foundation of AO’s reassessment order dated 29.01.2016, was the order of ld. CIT-3 passed u/s 263 of the Act dated 30.03.2015, which is no longer existing in the eyes of law, when the same has been cancelled by this Tribunal by order dated 06.04.2016. So when the foundation goes, all subsequent action falls / goes. This is based on legal maxim “Sublato Fundamento Credit Opus” meaning, in case a foundation is removed, super- structure falls. In the case of Badrinath vs Govt. of Tamil Nadu AIR 2000 SC 3243 Hon’ble Supreme Court held that once the basis of a proceeding is gone, all consequential orders and acts would fall on the ground automatically which principle is applicable to judicial / quasi-judicial proceedings. Since the Ld. CIT’s order u/s 263 of the Act has been quashed by the Tribunal vide order dated
Apeejay Shipping Ltd., AY-2010-11 06.04.2016, the AO giving appeal effect order to the section 263 order of Ld CIT is also null in the eyes of law. So, we confirm the impugned order of Ld CIT(A).
In the result, the appeal of revenue is dismissed.
Order is pronounced in the open court on 1st January, 2020. Sd/- Sd/- (Dr. A. L. Saini) (Aby. T. Varkey) Accountant Member Judicial Member Dated :1st January, 2020 Jd.(Sr.P.S.)
Copy of the order forwarded to:
Appellant – DCIT, Circle-9(1), Kolkata.
2 Respondent – M/s. Apeejay Shipping Limited, Apeejay House, 15 Park Street, Kolkata-700 016. 3. CIT(A)-3, Kolkata (sent through e-mail)
4. CIT- , Kolkata.
DR, ITAT, Kolkata. (sent through e-mail)