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Facts
The Revenue appealed against the CIT(A)'s order which held an assessment order passed u/s 143(3) r.w.s. 263 of the Act as infructuous. This was because the underlying order u/s 263, which formed the basis for the assessment, had already been quashed by the ITAT in a separate proceeding (ITA No.284/PUN/2021). The Revenue, however, has challenged the ITAT's order before the High Court.
Held
The Tribunal upheld the CIT(A)'s decision, confirming that since the foundational order u/s 263 was quashed by the ITAT, all subsequent proceedings dependent on it, including the assessment order u/s 143(3) r.w.s. 263, automatically became infructuous. The Tribunal noted that the Revenue's appeal against the quashing of the 263 order before the High Court does not change the infructuous nature of the current proceedings.
Key Issues
Whether an assessment order passed u/s 143(3) r.w.s. 263 becomes infructuous if the underlying order u/s 263 has been quashed by the Tribunal, even if the Revenue has appealed against that quashing order to the High Court.
Sections Cited
143(3), 263, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA
This appeal filed by the Revenue is directed against the order dated 09.06.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2016- 17.
The only effective ground of appeal
raised by the Revenue reads as under:
1. Whether on the facts and circumstances of the case and in law the Hon'ble CIT (A) erred in treating the order u/s 143(3) r.w.s. 263 of the Act as 'infructuous', considering the fact that the revenue has challenged the order of the Hon'ble ITAT, Pune allowing the assessee's appeal against the underlying order u/s 263 of the Act, in the High Court.
The Ld. Counsel for the assessee at the outset submitted that the Assessing Officer in the instant case has passed the order u/s 143(3) r.w.s. 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 09.03.2022 determining the total income of the assessee at Rs.1,06,79,61,960/- as against the returned income of Rs.78,29,61,960/- pursuant to the order passed u/s 263 of the Act. Referring to the copy of the order of the Tribunal, he submitted that the 263 order has since been dismissed by the Tribunal vide order dated 07.09.2023 and therefore, the subsequent proceedings become infructuous.
The Ld. DR fairly conceded that the Tribunal has quashed the 263 proceedings. However, the Revenue is in appeal before the Hon’ble High Court against the order of the Tribunal.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that the Tribunal vide order dated 07.09.2023 has quashed the order passed u/s 263 by the Chief Commissioner of Income Tax (CCIT) vide order dated 17.03.2021. We find the Assessing Officer in the instant case has passed the order u/s 143(3) r.w.s. 263 r.w.s. 144B of the Act on 09.03.2022 by making disallowance of Rs.28,50,00,000/. Since the order passed u/s 263 of the Act by the CCIT has since been quashed by the Tribunal, therefore, the subsequent proceedings pursuant to such order passed u/s 263 become infructuous. The only ground raised by the Revenue is accordingly dismissed.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open Court on 28th January, 2026.