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Facts
The Revenue filed an appeal against the order of the Ld. CIT(A) which quashed the order of the PCIT passed under Section 263 of the Income Tax Act, 1961. The Ld. CIT(A) held that the consequential assessment order could not survive. The Revenue preferred an appeal before the Hon'ble High Court against the Tribunal's order quashing the Section 263 order.
Held
The Tribunal noted that the original assessment order was cancelled by the PCIT under Section 263 of the Act. Subsequently, the impugned assessment order was passed consequent to the Section 263 order. Since the Section 263 order itself was quashed by the Tribunal, the consequent assessment order could not survive. Therefore, the Tribunal found no infirmity in the order of the Ld. CIT(A).
Key Issues
Whether the CIT(A) erred in quashing the order passed under Section 263 of the Act and whether the consequential assessment order can survive. Whether penalty proceedings under Section 271(1)(c) should be restored.
Sections Cited
263, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
This appeal by the Revenue is directed against order dated 28.11.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2015-16, raising following grounds:
1. Whether on the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in placing reliance upon the decision of the Hon'ble
Bombay Footwear Private Limited Bombay Footwear Private ITAT in assessee own case for AY ITAT in assessee own case for AY-2015-16 passed in passed in ITA No. 1645/Mum/2021 wherein the order passed by PC/T u/s. 1645/Mum/2021 wherein the order passed by PC/T u/s. 1645/Mum/2021 wherein the order passed by PC/T u/s. 263 of the Act was quashed ignoring the fact that the assessee has entered into a Act was quashed ignoring the fact that the assessee has entered into a Act was quashed ignoring the fact that the assessee has entered into a joint development agreement by opting to revenue sharing formula to joint development agreement by opting to revenue sharing formula to joint development agreement by opting to revenue sharing formula to gain commercial advantage of trade & commerce and hence income has gain commercial advantage of trade & commerce and hence income has gain commercial advantage of trade & commerce and hence income has to be considered under the head Income to be considered under the head Income from business & Profession in from business & Profession in place of capital gain? place of capital gain? 02. Whether on the facts and circumstances of the case and in Law, the 02. Whether on the facts and circumstances of the case and in Law, the 02. Whether on the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in placing reliance upon the decision of the Hon'ble Ld. CIT(A) has erred in placing reliance upon the decision of the Hon'ble Ld. CIT(A) has erred in placing reliance upon the decision of the Hon'ble ITAT in assessee own case for AY ITAT in assessee own case for AY-2015-16 passed in ITA No. 16 passed in ITA No. 1645/Mum/2021, wherein the order passed by PC/T u/s 263 of the 1645/Mum/2021, wherein the order passed by PC/T u/s 263 of the 1645/Mum/2021, wherein the order passed by PC/T u/s 263 of the Act was quashed ignoring the fact that the decision of ITAT is not Act was quashed ignoring the fact that the decision of ITAT is not Act was quashed ignoring the fact that the decision of ITAT is not accepted by Revenue and further appeal is filed before Hon'ble High accepted by Revenue and further appeal is filed before Hon'ble High accepted by Revenue and further appeal is filed before Hon'ble High Court Bombay which is pending? Court Bombay which is pending? 03. The penalty proceeding 03. The penalty proceedings initiated u/s 271(1)(c) of the Act deleted by s initiated u/s 271(1)(c) of the Act deleted by CIT(A) may please be restored if ground (1) is upheld in favour of CIT(A) may please be restored if ground (1) is upheld in favour of CIT(A) may please be restored if ground (1) is upheld in favour of revenue.
4. The Appellant prays that the order of the CIT(A) on the above 04. The Appellant prays that the order of the CIT(A) on the above 04. The Appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored grounds be set aside and that of the Assessing Officer be restored grounds be set aside and that of the Assessing Officer be restored.
Despite notifying none attended on behalf of the assessee. Despite notifying none attended on behalf of the assessee. Despite notifying none attended on behalf of the assessee. At the outset, the Ld. Departmental Representative (DR) submitted the outset, the Ld. Departmental Representative (DR) submitted the outset, the Ld. Departmental Representative (DR) submitted that the Ld. CIT(A) has followed the order of the Tribunal dated that the Ld. CIT(A) has followed the order of the Tribunal dated that the Ld. CIT(A) has followed the order of the Tribunal dated 15.05.2023 wherein the Tribunal has quashed the order passed by 15.05.2023 wherein the Tribunal has quashed the order passed 15.05.2023 wherein the Tribunal has quashed the order passed the ld Principal Commissioner of Income the ld Principal Commissioner of Income-tax (in short the ld ‘PCIT’) tax (in short the ld ‘PCIT’) u/s 263 of the Income Income-tax Act, 1961( in short the ‘Act’) , 1961( in short the ‘Act’) . This impugned order of the Assessing Officer being consequential to the impugned order of the Assessing Officer being consequential impugned order of the Assessing Officer being consequential order u/s 263 of the Act, order u/s 263 of the Act, therefore, the Ld. CIT(A) has held that as held that the said order could not survive. But the Revenue has preferred appeal not survive. But the Revenue has preferred appeal not survive. But the Revenue has preferred appeal before the Hon’ble High Court before the Hon’ble High Court against the order of order of Tribunal quashing order u/s 263 of the Act, u/s 263 of the Act, therefore, Revenue has therefore, Revenue has challenged this order of the Ld. CIT(A) challenged this order of the Ld. CIT(A) also.
Bombay Footwear Private Limited Bombay Footwear Private
We have heard submission of the Ld. DR and perused the ve heard submission of the Ld. DR and perused the ve heard submission of the Ld. DR and perused the relevant material on record. The original assessment order passed relevant material on record. The original assessment order passed relevant material on record. The original assessment order passed by the Assessing Officer was cancelled by the Ld. PCIT vide his by the Assessing Officer was cancelled by the Ld. by the Assessing Officer was cancelled by the Ld. order dated 23.03.2020 passed u/s 263 of the Act holding the order dated 23.03.2020 passed u/s 263 of the Act holding the order dated 23.03.2020 passed u/s 263 of the Act holding the original assessment order passed by the Assessing Officer as ment order passed by the Assessing Officer as ment order passed by the Assessing Officer as erroneous in so far as prejudicial to the interest of the Revenue and erroneous in so far as prejudicial to the interest of the Revenue and erroneous in so far as prejudicial to the interest of the Revenue and directed the Assessing Officer to pass a fresh assessment order. The directed the Assessing Officer to pass a fresh assessment order. The directed the Assessing Officer to pass a fresh assessment order. The impugned assessment order has been passed consequent to the impugned assessment order has been passed consequent to the impugned assessment order has been passed consequent to the ince, the order passed order u/s 263 of the Act dated 23.03.2020 63 of the Act dated 23.03.2020. Since, the order passed u/s 263 dated 23.03.2020 has already been quashed by the u/s 263 dated 23.03.2020 has already been quashed by the u/s 263 dated 23.03.2020 has already been quashed by the Tribunal vide order dated 15.05.2023 Tribunal vide order dated 15.05.2023, the consequent impugned the consequent impugned assessment order passed cannot survive. In view of the above, we assessment order passed cannot survive. In view of the above, we assessment order passed cannot survive. In view of the above, we do not find any infirmity in the order of the Ld. CIT(A) on the issue infirmity in the order of the Ld. CIT(A) on the issue infirmity in the order of the Ld. CIT(A) on the issue in dispute. The grounds raised by the Revenue are accordingly in dispute. The grounds raised by the Revenue are accordingly in dispute. The grounds raised by the Revenue are accordingly dismissed.
In the result, the appeal of the Revenue is dismissed. In the result, the appeal of the Revenue is dismissed. In the result, the appeal of the Revenue is dismissed.