ASSISTANT COMMISSIONER OF INCOME TAX, HUBLI vs. M/S.KARNATAKA VIKAS GRAMEEN BANK, DHARWAD

These two appeals by the revenue are directed against two separate orders of the CIT(A) both dated 29.02.2016 for the assessment years 2008-09 to 2009-10 respectively.

The revenue has raised the common grounds of appeal as under:

We have heard the learned DR as well as the learned AR and considered the relevant material on record. At the outset it is noted that the impugned assessment has been framed by the AO in pursuant to the revision order dated 14.03.2013 passed under section 263 of the Act by the CIT. It was further pointed out that this Tribunal vide order dated 13.02.2015 in for the assessment year 2008-09 and vide its order dated 16.10.2015 for assessment year 2009-10 in ITA No. 632/2014 has set aside the revision orders passed under section 263 of the Act. The learned AR has submitted that since the revisions itself have already been set aside by this Tribunal and the same are no more in existence, therefore the impugned assessment orders passed in pursuance to the revision orders are not sustainable and liable to be set aside. On the other hand, the learned DR has contended that the issue on the merits regarding disallowance made under section 40(i)(a) is now covered in favour of the revenue by the decision of Hon’ble jurisdictional High Court in the case of Raytara Sahakari Niyamit reported in 383 ITR 561 which has been upheld by the Hon’ble Supreme Court in 81 Taxmann.com 43. Thus the learned DR has submitted that when the issue is covered in favour of the revenue then the disallowance made by the AO cannot be deleted.

Having considered the rival submissions and as well as relevant material on record, we find that the impugned assessments for both the assessment years has been framed in pursuant to the revision orders passed under section 263. The Tribunal vide orders dated 13.022015 and 16.10.2015 for the assessment year 2008-09 and 2009-10 respectively have already set aside the revision orders passed under section 263. Thus when the revision orders itself are no more in existence, then the assessment orders passed in pursuant to the revision order have no legs to stand. Though the revenue has challenged the orders passed by this Tribunal before the Hon’ble High Court. However, in the absence of any order of the Hon’ble High Court or stay of operations of the orders passed by this Tribunal, the assessment order passed in pursuance to the revision orders are not sustainable in law and accordingly liable to be set aside.

In the result, the appeals of the revenue are dismissed.