MSTC LTD,KOLKATA vs. PCIT, KOLKATA-1. , KOLKATA

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ITA 1131/KOL/2023Status: DisposedITAT Kolkata17 January 2024AY 2018-19Bench: Shri Rajpal Yadav, Vice-President (KZ), Shri Girish Agrawal (Accountant Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Principal Commissioner could not invoke Section 263 against an assessment order that was no longer in existence. Therefore, the order passed under Section 263 was unsustainable.

What were the facts?

The Principal Commissioner initiated proceedings under Section 263 against an assessment order. However, this assessment order had already been set aside by the ITAT and a fresh assessment order had been passed by the Assessing Officer.

What were the issues?

Whether proceedings under Section 263 can be initiated against an assessment order that has been set aside by a higher appellate authority. The validity of a Section 263 order when the original assessment order is non-existent.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 254,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, KOLKATA

Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Girish Agrawal

Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Principal Commissioner of Income Tax,

1.

Assessment Year: 2018-2019 MSTC Ltd. Kolkata-1 dated 4th September, 2023 passed under section 263 of the Income Tax Act for A.Y. 2018-19.

2.

The grievance of the assessee is that ld. CIT has erred in taking cognizance under section 263 of the Income Tax Act, 1961.

3.

With the assistance of ld. Representatives, we have gone through the record carefully. It emerges out that ld. Assessing Officer has passed an assessment order under section 143(3) of the Income Tax Act, 1961 on 24.05.2021. This order has been treated by the ld. CIT as suffering from an apparent error, which has caused a prejudice to the interest of revenue and, therefore, action under section 263 of the Income Tax Act has been taken.

4.

Dissatisfied with the assessment order, the assessee has filed an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has decided the appeal of the assessee vide order dated 06.03.2023. Dissatisfied with the order of ld. CIT(Appeals), the assessee carried the matter in appeal before ITAT vide ITA No. 425/KOL/2023. This appeal was heard on 14th June, 2023 and ITAT vide its order dated 28.06.2023 set aside the assessment order to the ld. Assessing Officer for verification and re- adjudication the issues. In compliance to the directions of the ITAT, the ld. Assessing Officer has passed the fresh order under section 254/250/143(3) of the Income Tax Act, 1961 on 16.08.2023.

Assessment Year: 2018-2019 MSTC Ltd.

5.

A perusal of the above details would indicate that on the day when ld. Principal Commissioner passed the order under section 263 of the Act pointing an apparent error in the assessment order dated 24.05.2021 passed under section 143(3) was not in existence because on an appeal of the assessee, this order was set aside by the ITAT and in pursuance of the Tribunal’s order, the ld. Assessing Officer has already passed a fresh order giving effect to the order of the ITAT, therefore, ld. Commissioner cannot term any error causing prejudice to the interest of revenue in the assessment order dated 24.05.2021. There is no foundation to the ld. Commissioner to take action under section 263 against an order, which is already set aside on an appeal by the second appellate authority. Therefore, we are of the view that this 263 order passed by the ld. Principal Commissioner is not sustainable. Hence it is quashed.

6.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 17/01/2024.

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