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Facts
The Principal Commissioner of Income Tax (PCIT) initiated revisional proceedings under section 263 of the Income Tax Act for AY 2019-20, challenging an assessment order passed under section 153A r.w.s 144C(13). The underlying assessment order had previously been declared "non est" by the Tribunal in a separate appeal (ITA No. 758/Del/2023) as it was found to be void ab initio due to violations of section 144C.
Held
The Tribunal ruled that since the foundational assessment order had already been declared "non est" (void) by a prior Tribunal order, the basis for the PCIT to exercise revisional jurisdiction under section 263 was eliminated. Consequently, the revisional proceedings could not survive.
Key Issues
Whether the PCIT can exercise revisional powers under section 263 against an assessment order that has already been declared "non est" by the Tribunal.
Sections Cited
263, 153A, 144C, 274
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Income Tax Appellate Tribunal, DELHI BENCH “B”, DELHI
(A.Y.2019-20) Defsys Solutions P. Ltd., C/o Flat No.1, 1st Floor, 1, Dakshineshwar Building 10, Hailey Road, New Delhi ...... अपीलाथ�/Appellant PAN: AACCD-5328-D बनाम Vs. Principal Commissioner of Income Tax, (Central) Jhandewalan Extension ..... �ितवादी/Respondent New Delhi 110055 अपीलाथ� �ारा/ Appellant by : Shri Ajay Wadhwa, and Ms. Ragini Handa, Advocates �ितवादी�ारा/Respondent by : Shri Surender Pal, CIT-DR सुनवाई क� ितिथ/ Date of hearing : 19/11/2024 घोषणा क� ितिथ/ Date of pronouncement : : 19/11/2024 आदेश/ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Principal Commissioner of Income Tax (Central), Delhi-2 (hereinafter referred to as 'the PCIT') dated 28.02.2024, for assessment year 2019-20, passed u/s. 263 of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’).
Shri Ajay Wadhwa, appearing on behalf of the assessee submitted at the outset that assessment order against which the PCIT has invoked revisionary powers has been held to be non est by the Tribunal vide order dated 28.03.2024 in appeal by the assessee in ITA No. 758/Del/2023. Once the assessment order is held to be non est, the subsequent proceedings arising therefrom are vitiated.
We have heard the submissions made by ld. Counsel for the assessee and have perused the order of Coordinate Bench in for AY 2019- 20 (supra).
The assessee in instant appeal has assailed the order of PCIT dated 28.02.2024 passed u/s. 263 of the Act. The PCIT has exercised revisional powers in respect of Final Assessment Order passed u/s. 153A r.w.s 144C(13) of the Act dated 20.01.2023 for AY 2019-20 in the case of assessee. We find the same very assessment order was subject matter of appeal before the Tribunal in appeal by the assessee in (supra). The assessee had challenged validity of the assessment order by raising following ground:- “
1. That on the facts and circumstances of the case and in law, the order passed by the Ld. Assessing Officer (hereinafter referred to as "Ld. AO") under section 153A r.w.s 144C (13) of the Income Tax Act 1961 ("the Act") dated 20.01.2023 is bad in law and on facts, void ab initio as the same has been passed in violation of section 144C of the Act.”
5. The Tribunal after considering facts of the case, relevant provisions of the Act and various case laws, concluded as under:- “34. Considering the facts of the case in totality, in the light of the decisions discussed hereinabove, we have no hesitation to hold that the proceedings culminated on 31.03.2022 when the demand notice was issued and served upon the assessee along with penalty notice u/s 274 of the Act and, therefore, all the subsequent proceedings and orders become non est.”
Once the assessment order has been held to be non est, the substratum for exercising revisionary jurisdiction is eroded, hence, the revision proceedings u/s. 263 of the Act against the said order would not survive. Thus, appeal of the assessee assailing proceedings u/s. 263 of the Act becomes infructuous.