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Facts
The Revenue appealed against the order of the CIT(A) which dismissed the assessee's appeal as infructuous. The assessee's original appeal before the CIT(A) was against an order passed by the AO under section 147 read with section 263 of the Income Tax Act, 1961.
Held
The Tribunal noted that a Co-ordinate Bench had previously held the order under section 263 of the Act to be invalid. The CIT(A) had dismissed the assessee's appeal as infructuous based on this finding. The DR conceded that if the order under section 263 is invalid, the order under section 147 read with section 263 cannot stand.
Key Issues
Whether the CIT(A) was justified in dismissing the assessee's appeal as infructuous when the order forming the basis of the AO's assessment was held to be legally invalid.
Sections Cited
148, 147, 263, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: MS. PADMAVATHY.S & SHRI MANU KUMAR GIRI
आदेश / O R D E R
PER PADMAVATHY.S, A.M:
This appeal by the Revenue is against the order of the Commissioner of Income Tax (Appeals), Chennai-20 (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 ( in short "the Act") dated 21.07.2025 for Assessment Year (AY) 2015-16.
Sri Arumuga Sugars Ltd., :- 2 -: 2. The assessee is a company and engaged in the business of sugar industry. The assessee filed the return of income for AY 2015-16 in response to notice u/s. 148 of the Act on 24.43.2021 admitting a loss Rs. 9,96,551/-. The assessment u/s. 147 of the Act was completed accepting the income returned by the A.O. Subsequently, the PCIT in excise of powers u/s. 263 of the Act directed the A.O to verify the recovery of farmers advances by the assessee to the tune of Rs. 17,13,53,500/-. The A.O passed an order u/s. 147 r.w.s 263 of the Act assessing the income of the assessee at Rs. 17,13,53,500/. The assessee filed an appeal before the CIT(A) against the said order of the A.O. Before the CIT(A), the assessee submitted that an appeal was filed against the order u/s. 263 of the Act before the Tribunal and the Tribunal vide order dated 25.03.2025 (ITA No.1616/Chny/2024) has held that the order u/s. 263 of the Act has no legal validity. The CIT(A) dismissed the appeal filed by the assessee as infructuous on the ground that the order u/s.263 is held as invalid. The Revenue is in appeal before the Tribunal against the order of the CIT(A).
We heard the parties and perused the material on record. The assessee challenged the order passed u/s. 263 of the Act before the Co-ordinate Bench and the Co-ordinate Bench has held that the order u/s. 263 of the Act is not valid vide above referred order. We notice that the CIT(A) has considered the decision of the Co-ordinate Bench and accordingly has dismissed the appeal as infructuous. During the course of hearing, the Ld. DR fairly conceded that when the order u/s. 263 of the Act is held to be invalid then the order passed by the A.O u/s. 147 r.w.s 263 of the Act has no leg to stand. Considering the facts and circumstances we have no hesitation to hold that there is no infirmity in the order of the CIT(A) in holding the appeal of the assessee has Sri Arumuga Sugars Ltd., :- 3 -: become infructuous. Accordingly, we dismissed the appeal filed by the Revenue.
In the result, appeal of the Revenue is dismissed.
Order pronounced on 27th day of January, 2026 at Chennai.