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Facts
The assessee filed a return of income declaring a loss. The assessment order was passed under section 143(3) r.w.s. 144C(3) and later rectified. The PCIT invoked section 263, holding the assessment order erroneous. Subsequently, a co-ordinate bench of the Tribunal quashed the PCIT's order under section 263.
Held
The CIT(A) allowed the assessee's appeal on the ground that the consequential assessment order would not survive as the section 263 order was quashed by the Tribunal. The Tribunal upheld the CIT(A)'s order, stating that with the section 263 order being set aside, there was no basis for the CIT(A) to decide the appeal on merits.
Key Issues
Whether the CIT(A) order allowing the appeal is valid when the underlying section 263 order, which formed the basis for the consequential assessment, was quashed by the Tribunal.
Sections Cited
143(3), 144C(3), 115JB, 263, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2014-15.
The Revenue has challenged the order of the ld. CIT(A) in allowing the appeal of the assessee, challenging the order u/s. 143(3) r.w.s. 263 of the Act on the ground that since the Tribunal had quashed the section 263 proceeding, the consequential order would not survive on its own.
The brief facts are that the assessee had filed its return of income dated 29.11.2014, declaring current year loss at Rs.49,10,05,231/- under the normal provisions
(A.Y. 2014-15) DCIT vs. Tata Sons Pvt. Ltd. and the loss of Rs.32,12,03,297/- u/s.115JB of the Act. The assessee’s case was selected for scrutiny and assessment order dated 16.02.2018 was passed u/s. 143(3) r.w.s. 144C(3) of the Act, determining the total income at Rs.759,51,13,110/- and book profits at Rs.1541,59,96,700/- u/s. 115JB of the Act, followed by a rectification order dated 22.03.2018, determining the total income under normal provisions at 759,54,41,174 and book profit at Rs.587,46,96,703/-. The ld. PCIT held the assessment order to be erroneous and prejudicial to the interest of the Revenue, vide order dated 28.12.2018 by invoking jurisdiction u/s. 263 of the Act. Subsequently, the ld. A.O. passed the assessment order dated 31.12.2019 u/s. 143(3) r.ws. 263 of the Act, determining total income at Rs.740,97,15,760 and the book profit determined at Rs.587,46,96,703/- as per order dated 22.03.2018 which remains unchanged. The assessee simultaneously was in appeal before the Tribunal, challenging the order of the ld. PCIT passed u/s.263 of the Act and had also challenged the consequential assessment order before the first appellate authority. The co-ordinate bench vide order dated 20.04.2020 had quashed the order of the ld. PCIT passed u/s. 263 of the Act on the ground that the revisionary jurisdiction assumed by the ld. PCIT is held to be bad-in-law and without jurisdiction.
On the other hand, the ld. CIT(A) in the impugned order had allowed the appeal of the assessee, challenging the assessment order passed undersection 143(3) r.w.s. 263 order on the ground that since section 263 order has been quashed by the Tribunal, the consequential assessment order will not survive.
The Revenue is in appeal before us, challenging the order of the ld. CIT(A) in allowing the appeal of the assessee.
(A.Y. 2014-15) DCIT vs. Tata Sons Pvt. Ltd. 6. We have heard the rival submissions and perused the materials available on record. The impugned order of the ld. CIT(A) is an order passed in consequence of the revision order passed by the ld. PCIT which has been set aside by the Tribunal. As the same has been quashed, the order u/s. 263 of the Act no longer exists and the ld. CIT(A) does not have any basis to decide the said appeal on the merits where the subject matter of the impugned appeal is held to be infructuous, null and void. The action of the ld. CIT(A) in allowing the appeal of the assessee on this ground does not warrant any interference as we do not find any infirmity in the order of the ld. CIT(A). We, therefore, dismiss the ground raised by the Revenue.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 26.07.2024.