OMWATI,DEHRADUN vs. ITO, DEHRADUN

This appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [‘the Ld. CIT(A)’ for short] dated 05.02.2025 for Assessment Year 2010-11 arising out of the order passed u/s 143(3) r.w.s. 263 of the Income Tax Act, 1961 (the Act).

Brief facts of the case are that the case of the assessee was reopened by issue of notice u/s 148 for the reason that deduction u/s 54B was wrongly allowed. Assessee alongwith two co-owners had sold agricultural land and purchased another land on which /Del/2025 Omwati vs. ITO deduction was claimed u/s 54B of the Act. The said deduction was allowed to the assessee and other co-owners in their respective re- assessment completed by three different Assessing Officers. The assessee filed complete details and proofs for payment of sale consideration of Rs.1,60,00,000/- by all co-owners and acquisition of agricultural land for which deduction u/s 54B was claimed. The assessee further filed copies of sale deed for purchase of agricultural land with possession, copy of khasra and khatauni, bank account of the assessee through which sale consideration was paid for acquiring agricultural land.

Thereafter proceedings u/s 263 was initiated by issue of notice and ld. PCIT in terms of order passed u/s 263 on 24.10.2027 held the assessment order as erroneous and prejudicial to the interest of revenue and direct the AO to make necessary enquiries with regard to the allowability of deduction u/s 54B of the Act. Aggrieved with the said revision order of Ld. Pr. CIT, the assessee filed an appeal before the Tribunal. In the meantime, the AO proceeded with the directions given by the ld. PCIT in the order passed u/s 263 of the Act and passed order u/s 263/143(3) dt. 29.10.2018 wherein the deduction claimed u/s 54B at Rs. 35,08,250/- was disallowed. Against this order, the assessee preferred an appeal before the ld. CIT(A) who despite of the informing that the order passed u/s 263 was quashed by the coordinate Delhi bench of ITAT in ITA No. 6853/Del/2017 vide order dt. 15.09.2023, dismissed the appeal of /Del/2025 Omwati vs. ITO the assessee. Thus, the present appeal is filed by the assessee before the Tribunal.

Heard both the parties. At the outset it is seen that the present proceedings were initiated in terms of the order passed u/s 263 of the Act dated 24.10.2017 by ld. PCIT. Since the said very order u/s 263 stood quashed by the Co-ordinate Bench of ITAT, Delhi in ITA No. 6853/Del/2017 vide order dt. 15.09.2023, thus, there remained no cause of action pending in the instant case. This being so, we set aside the impugned appellate order of Ld. CIT(A) who despite being informed by the assessee about the order of Tribunal quashing the order passed u/s 263, dismissed the appeal of the assessee. Accordingly, all the grounds of appeal of the assessee are allowed.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on 23.07.2025.