PRINCIPAL COMMISSIONER OF INCOME TAX, VALSAD vs. SHRI KETAN I. SHAH, VAPI

Grounds of appeal raised by the Revenue are as follows:- “Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the order u/s 143(3) r.w.s. 263 of the I.T. Act stating that the revision order u/s 263 of the I.T Act which is the basis for order u/s 143(3) r.w.s. 263 of the I.T. Act has been quashed by the Hon'ble ITAT vide its order dated 17.12.2018 and that the order u/s 143(3) r.w.s. 263 of I.T. Act becomes invalid and viod-ab-initio so the adjudication of the grounds raised by the assessee becomes infructuous?”

At the outset, Shri Rajesh M Upadhyay, Ld. Authorized Representative (AR) for the assessee begins by pointing out that Tribunal in assessee’s own case in dated 17.12.2018 has quashed the order passed by Ld. Principal Commissioner of Income Tax under section 263 of the Act. Therefore the consequential order passed by AO u/s 143(3) r.w.s. 263 of the Act becomes infructuous and therefore should be cancelled.

On the other hand, Ld. CIT-DR for the Revenue relied on the order passed by Ld. PCIT u/s 263 of the Act.

We have heard both the parties and perused the materials available on record. We note that Ld. CIT(Appeals) has allowed the appeal of the assessee observing as follows:- “3.3.Decision: After considering the submissions of the appellant, it is noticed that the Honourable ITAT, Surat Bench has passed the appellate order vide for A./Y 08-09 on 17.12.2018 and quashed the order passed u/s 263 of the Act dated 29.03.2018. The relevant part of the ITAT order is as under. ‘We are of the considered view that the AO had made detailed enquiries and after applying his mind accepted the claim of the assessee, which is also plausible view. Therefore, we find that twin conditions were not satisfied for invoking the jurisdiction under section 263 of the Act. Therefore, in absence of the same, the Ld. PCIT was not correct in exercise the jurisdiction under section 263 of the IT Act and cancelling the assessment and accordingly, we quash the impugned order passed under section 263 of the Act.’ In view of the above jurisdictional ITAT order, the appeal filed before the undersigned becomes infructuous as the order passed u/s 263 of the Act got quashed by Hon'ble ITAT Surat bench. Hence, the set aside assessment order u/s 143(3) r.w.s. 263 of the Act becomes invalid and void-ab-initio. Accordingly, the addition of Rs.36,16,042/- made in the order u/s 143(3) r.w.s. 263 of the Act is not sustainable and hereby deleted.”