Case Note & Summary
The Commissioner of Income Tax-II filed an appeal under section 260A of the Income Tax Act, 1961, challenging an order of the Income Tax Appellate Tribunal (ITAT) dated 19th August 2011. The assessment year in question was 2005-06. The ITAT had allowed the appeal of the assessee, HDFC Bank Ltd., holding that the assessment order passed by the Assessing Officer under section 143(3) read with section 263 of the Act had become non-est in law. This was because the foundational order passed by the Commissioner under section 263, which had directed the Assessing Officer to make a fresh assessment, had been quashed and set aside by the ITAT in an earlier order dated 15th July 2011. The Revenue had challenged that earlier ITAT order in Income Tax Appeal No.250 of 2012, which was dismissed by the Bombay High Court, thereby upholding the quashing of the section 263 order. In the present appeal, the court noted that since the section 263 order had been quashed and that decision had been upheld, the subsequent assessment proceedings originating from it were invalid. Therefore, no substantial question of law arose for consideration. The appeal was dismissed with no order as to costs.
Headnote
A) Income Tax - Revisional Jurisdiction - Section 263 of the Income Tax Act, 1961 - Consequential Assessment - Where the order passed by the Commissioner under section 263 was quashed by the ITAT and that decision was upheld by the High Court in a separate appeal, the subsequent assessment order passed under section 143(3) read with section 263 becomes non-est. Consequently, no substantial question of law arises in an appeal challenging the ITAT's order that allowed the assessee's appeal on this ground. (Paras 2-3)
Issue of Consideration
Whether any substantial question of law arises for consideration in this appeal when the order under section 263 of the Income Tax Act, 1961, which formed the basis of the assessment, has already been quashed and upheld by the High Court.
Final Decision
The appeal is dismissed. No order as to costs.
Law Points
- No substantial question of law arises when the foundational order under section 263 has been quashed and upheld by the High Court
- rendering subsequent proceedings non-est.
Case Details
2014 LawText (BOM) (07) 90
Income Tax Appeal No.274 of 2012
S.C. Dharmadhikari, B.P. Colabawalla
Mr Suresh Kumar for Appellant, Mr J.D. Mistry, Sr. Counsel with Mr Atul Jasani for Respondent
Commissioner of Income Tax-II
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Appeal under section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal.
Remedy Sought
The Revenue sought to challenge the ITAT order that allowed the assessee's appeal and held the assessment order as non-est.
Filing Reason
The Revenue was aggrieved by the ITAT order dated 19th August 2011 which allowed the assessee's appeal on the ground that the section 263 order had been quashed.
Previous Decisions
The ITAT had earlier quashed the Commissioner's order under section 263 on 15th July 2011. That decision was upheld by the Bombay High Court in Income Tax Appeal No.250 of 2012.
Issues
Whether any substantial question of law arises from the ITAT order when the foundational section 263 order has been quashed and upheld by the High Court.
Submissions/Arguments
The Revenue argued that the ITAT erred in allowing the assessee's appeal.
The assessee contended that the assessment order was non-est due to the quashing of the section 263 order.
Ratio Decidendi
When the order passed under section 263 of the Income Tax Act, 1961, which formed the basis for a subsequent assessment order, is quashed and that quashing is upheld by the High Court, the assessment order becomes non-est and no substantial question of law arises in an appeal against the ITAT order that gave effect to this position.
Judgment Excerpts
In view thereof and for the reasons stated in the said judgment passed in Income Tax Act No.250 of 2012 we are of the view that even in this Appeal, no substantial question of law arises for our consideration.
The Appeal is therefore dismissed. No order as to costs.
Procedural History
The Assessing Officer passed an order under section 143(3) pursuant to directions under section 263. The Commissioner's section 263 order was quashed by the ITAT on 15th July 2011. The Revenue challenged that order in ITA No.250/2012, which was dismissed by the High Court. Subsequently, the ITAT allowed the assessee's appeal on 19th August 2011, holding the assessment order as non-est. The Revenue filed the present appeal against that ITAT order.
Acts & Sections
- Income Tax Act, 1961: 260A, 143(3), 263
