DCIT, BANGALORE vs. M/S IBM INDIA PVT. LTD., BANGALORE

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ITA 410/BANG/2015Status: DisposedITAT Bangalore24 July 2015AY 2005-063 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, agreeing that the order giving effect to the Section 263 order did not survive as the Section 263 order itself was quashed. Therefore, the appeal before the CIT(A) was rightly considered infructuous.

What were the facts?

The Revenue appealed against the CIT(A)'s order which allowed the assessee's appeal. The CIT(A) had found the appeal infructuous because the order under Section 263, which was the basis for a subsequent assessment order, had been quashed by the ITAT.

What were the issues?

Whether an appeal giving effect to an order under Section 263 is valid when the Section 263 order has been quashed by the Tribunal. The validity of the CIT(A)'s decision to treat the appeal as infructuous.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 260A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE

Before: SMT. P. MADHAVI DEVI & SHRI ABRAHAM P GEORGE

For Appellant: Shri G.R. Reddy, CIT(DR)

This appeal by the Revenue is against the order of the CIT(A), Bangalore-3, Bangalore, dated 31/12/2014 for the assessment year 2005-06.

2.

The only grievance of the revenue in this appeal is that the CIT(A) has erred in allowing the appeal of the assessee by placing reliance on the order of the Tribunal in the assessee’s own M/s.IBM India Pvt. Ltd. Page 2 of 3 case without appreciating the fact that the same has not become final in view of the departmental appeal u/s 260A of the Income- tax Act, 1961 [hereinafter referred to as 'the Act' for short] pending before the Hon’ble High Court of Karnataka.

3.

Brief facts of the case are that the assessment order u/s 143(3) of the Act was passed on 26/12/2008 assessing the total income of the assessee at Rs.5,46,19,33,785/-. Subsequently the CIT invoked jurisdiction u/s 263 of the Act and passed an order dated 21/3/2011 setting aside the assessment order. Against the same, assessee preferred an appeal before the ITAT and the ITAT by order dated 05/07/2013 has quashed the order u/s 263 restoring the assessment order passed u/s 143(3). Meanwhile, AO had passed the assessment order u/s 143(3) r.w.s 263 of the Act giving effect to the order of the CIT u/s 263 of the Act against which, the assessee preferred an appeal before the CIT(A), who allowed the same observing that the order u/s 263 has already been quashed by the Tribunal and therefore the appeal is infructuous and does not survive. Against this order of the CIT(A), revenue is in appeal before us.

4.

Having heard both the parties and having gone through the material on record and also the order of the Tribunal dated 05/07/2013 in the assessee’s own case against order u/s 263 of the Act dated 21/3/2011, we find that the order u/s 263 has been quashed by the Tribunal. Therefore, the order giving effect to the M/s.IBM India Pvt. Ltd. Page 3 of 3 order u/s 263 does not survive and the CIT(A) has rightly held the appeal to be infructuous.

5.

In the result, the revenue’s appeal is dismissed.

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