ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3, NAGPUR, NAGPUR V. AMIT KHARA, NAGPUR

ITA 511/NAG/2024

AI Insights

The case involves an appeal by the Revenue against the decision of the learned Commissioner of Income Tax (Appeals), which had allowed the appeal of the respondent, Amit Khara, by quashing the order under section 263 of the Income Tax Act. The original section 263 order had been issued by the Principal Commissioner of Income Tax, which revised the assessment made by the Assessing Officer, disallowing a claim of agricultural income. The Tribunal's decision to quash the section 263 order was based on the finding that the Assessing Officer had conducted a sufficient enquiry and that the revision was not justified. The Revenue's appeal to the Tribunal contested the CIT(A)'s decision, but the Tribunal upheld the CIT(A)'s decision, leading to the dismissal of the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474309 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Other Referred Cases: Apollo Tyres Ltd ACIT (65 ITD 263(Delhi)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Assessee Lawyers: MAHAVIR ATAL
• Keywords: Set aside; Revision of order
• Section: 143(3); 263

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA no.511/Nag./2024 (Assessment Year : 2016–17) Asstt. Commissioner of Income Tax Circle–3, Nagpur ……………. Appellant v/s Amit Khara Flat no.401, Padmasakha Apartment Plot no.102, Ramdaspeth, Nagpur 440 010 PAN – ABWPK8868P ……………. Respondent Assessee by : Shri Mahavir Atal Revenue by : Shri Abhay Y. Marathe Date of Hearing – 21/01/2025 Date of Order – 23/01/2025 O R D E R PER V. DURGA RAO, J.M. The aforesaid appeal by the Revenue is directed against the impugned order dated 22/07/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2016–17. 2. In its appeal, the Revenue has raised following grounds:– “1. Whether on the facts and circumstances of the case, the Ld. CIT(A) was correct in allowing the appeal against the order passed by the Assessing Officer consequent to the Order u/s.263 of the Act when the decision of the Hon'ble ITAT quashing the order u/s.263 has not been accepted by the Revenue and the same has been challenged before the Hon'ble High Court of Bombay, Nagpur Bench, which is pending. 2 Amit Khara ITA no.511/Nag./2024 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) was correct in deleting the addition made by the Assessing Officer without going into merits of the case especially when the Revenue has challenged the decision of the Hon'ble ITAT before the Hon'ble High Court. 3. In the facts and circumstances of the case during the pendency of the case before the Hon'ble High Court, the Hon'ble ITAT may be pleased to set aside the order of the Ld. CIT(A) to him. 4. The Appellant craves leave to add or modify any ground at the time of hearing.” 3. It is pertinent to reproduce below the operative part of the impugned order passed by the learned CIT(A) for better appreciation of facts:– “5. Consequent upon the order u/s 263 of the Act, the AO passed order u/s 144 r.w.s. 263 r.w.s. 144B of the Act on 25.03.2022 assessing income at Rs.2,44,67,210/- disallowing the claim of agricultural income of Rs 2,24,94,953/-. Present appeal is against the order u/s 143(3) r.w.s. 263 r.w.s. 144B of the Act. 6. In the meanwhile, the appellant had preferred an appeal against the order u/s 263 of the Act passed by the PCIT dated 16.02.2017 before the Hon'ble ITAT, Nagpur and the Hon'ble ITAT has quashed the order u/s 263 of the Act passed by the PCIT in ITA No.63/NAG/2021 vide order dated 28.06.2022. Relevant extract of the order on page nos. 40 and 41 of the order is as under - “In the facts of the present case, the Assessing Officer was satisfied consequent to making an enquiry and examining the evidences produced by the appellant for the claim of agricultural income. The learned PCIT in the revision order has not doubted any evidences produced by the appellant. However, he made out case of inadequate enquiry, but he erred in not doing minimal enquiry to ascertain the fact that whether the order is erroneous or not. The learned PCIT has relied on the decision of Hon'ble ITAT Bench (E) in the case of AppolloTyres Ltd ACIT (65 ITD 263(Delhi). In this regards we humbly wish to state that the jurisprudence discussed in this case is not relevant for the present case. In this case the Hon'ble Delhi High Court has upheld the jurisdiction of CIT to revoke 263 provision on proposal of the AO and the legality of invoking of 263 provision when alternate course of action in the form of 147 was also available. In the present case, none of these legal grounds has been raised by the appellant. Thus, the decision of the aforementioned judgment is not applicable to the appellant's case. Therefore, on an overall view of the facts of the case, we are of the considered opinion that the exercise of revisional jurisdiction by the learned Principal Commissioner is without any justification. The learned Principal Commissioner has sought to reappraise the evidence in the garb of revisional jurisdiction. In light of above discussion we hold that the order u/s 263 cannot be sustained as we find that the assessment order passed by the AO cannot be said to be erroneous or prejudicial to the interest of revenue, and accordingly the order made u/s 263 is quashed. Thus the appeal of the assessee is allowed.” Since, the base order i.e. the order u/s 263 of the Act passed by the PCIT dated 16.02.2017 itself has been quashed by the Hon'ble ITAT, the 3 Amit Khara ITA no.511/Nag./2024 consequential order u/s 143(3) r.w.s. 263 r.w.s. vs. 144B of the Act dated 25.03. 3.2022 becomes infructuous and therefore the grounds related to the appeal against the order passed u/s 263 r.w.s. 144B of the Act dated 25.03.2022 are allowed. 4. We find that the order under section 263 of the Act passed by the learned Commissioner of Income Tax has been quashed by the Tribunal, therefore, the consequential order passed by the Assessing Officer cannot survive. Accordingly, we decline to interfere with the impugned order passed by the learned CIT(A) which is hereby upheld. Thus, all the grounds raised by the Revenue are dismissed. 5. In the result, appeal filed by the Revenue is dismissed. Order pronounced in the open Court on 23/01/2025 Sd/- K.M. ROY ACCOUNTANT MEMBER Sd/- V. DURGA RAO JUDICIAL MEMBER NAGPUR, DATED: 23/01/2025 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "