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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH
आदेश आदेश /O R D E R आदेश आदेश PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -1, Chennai dated 29.08.2016 and pertains to the assessment year 2008-09.
Shri Shiva Srinivas, the Ld. Departmental Representative submitted that consequent to the order passed by the CIT under Section 263 of the Income Tax Act, 1961 (in short ‘the Act’), the Assessing Officer completed the assessment by the impugned order. The assessee challenged the order of the CIT before this Tribunal in ITA No.813/Mds/2013. This Tribunal by an order dated 01.07.2016 found that the order passed by the CIT is not justified.
Accordingly, the same was set aside. The CIT (Appeals) by following the order of this Tribunal found that the order of the Assessing Officer does not survive in view of the order of this Tribunal setting aside the order passed by the CIT. Referring to ground No.2.2 raised before this Tribunal, the Ld. D.R., submitted that the Revenue has already filed an appeal before the High Court against the order of this Tribunal in ITA 813/Mds/2013 and the same is pending. Therefore, the CIT (Appeals) is not justified in following the order of this Tribunal.
The Ld. D.R., further submitted that the assessee was following mercantile system of accounting. Therefore, the trading loss was assessable in the hands of the assessee on accrual basis.
On the contrary, Shri A. Sriraman, the Ld. counsel for the assessee submitted that admittedly, the Assessing Officer passed the impugned order of assessment consequent to the revisional order passed by the Commissioner under Section 263 of the Act.
Now the revisional order passed by the Commissioner under Section 263 of the Act was set aside.
We have considered the rival submissions on either side and perused the material available on record. It is not in dispute that consequent to the order passed by the Commissioner under Section 263 of the Act, the Assessing Officer passed the impugned order of assessment. Now, the order passed by the Commissioner under Section 263 of the Act was set aside by this Tribunal. Therefore, the consequential order passed by the Assessing Officer cannot stand in the eye of law. The only objection of the D.R. is that an appeal was filed by the Revenue against the order of Tribunal before the High Court and the same is pending. In the absence of any stay, by the High Court, mere pendency of appeal cannot be a reason to take a different view. Therefore, this Tribunal is of the considered opinion, the CIT (Appeals) has rightly found that the assessment order cannot stand in the eye of law especially when the administrative Commissioner’s order under Section 263 of the Act was set aside by this Tribunal. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority. Hence, the same is confirmed.
In the result, the appeal of the Revenue stands dismissed.
Order pronounced on 23rd February, 2017 at Chennai.