CUARZO,UDAIPUR V. PR. CIT, UDAIPUR

ITA 347/JODH/2025

AI Insights

The case involves an appeal by the assessee, Cuarzo G-1, against the order of the Principal Commissioner of Income Tax, Udaipur, which initiated proceedings under section 263 of the Income Tax Act after the assessment for the year 2020-21 had been finalized under the VSVS. The assessee had previously appealed the original assessment order and opted for the VSVS, receiving a final order in Form 4 from the PCIT, which determined the tax arrears and granted immunity from further proceedings. The Tribunal examined whether the PCIT could invoke section 263 after the assessment order had merged with the appellate order under the VSVS, and concluded that the PCIT lacked jurisdiction to revise the order post-settlement under the VSVS.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 842156 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2020-2021
• Appeal Filed On: 01-04-2025
• Other Referred Cases: CIT Vs. Shri Arbuda Mills Ltd. (1998) 231 ITR 50 (SC), CIT Vs. Alagendran Finance Ltd. (2007) 298 ITR 1 (SC), CIT Vs. Vam Resorts & Hotels Pvt. Ltd. (2019) 414 ITR 715 (Del.)
• Laws Referred To: Direct Taxes Vivad Se Vishwas Scheme, 2024, Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNI PAL; VIRTUAL
• Assessee Lawyers: AMIT KOTHARI; PHYSICAL
• Keywords: Revision of order
• Section: 263

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 347/Jodh/2025 (Assessment Year – 2020-21) Cuarzo G-1, G-1-90-93, Sukher Girwa Udaipur - 313004 PAN No. AAHFC 3351 P Principal Commissioner of Income Tax Udaipur - 313001 Assessee by Shri Amit Kothari, CA (Physical) Revenue by Smt. Runi Pal, CIT-DR (Virtual) Date of Hearing 29.01.2026. Date of Pronouncement 26.02.2026. ORDER DR. MITHA LAL MEENA, A.M.: This appeal is filed by assessee against the order of Principal Commissioner of Income Tax, Udaipur [hereinafter referred to as PCIT] dated 04.03.2025 with respect to Assessment Year 2020-21 challenging therein initiation of proceedings u/s 263 after the assessment having achieved finality under Direct Taxes Vivad Se Vishwas Scheme, 2024 and that the order in Form 4 having already been issued for settlement of issues in the assessment. 2. Grounds of Appeal are as under: 1. The order passed by the Ld. AO is bad in law and against justice and is thus liable to be quashed. 2. On the facts and in the circumstances of the case ld. Assessing Officer has erred in disallowing claim of deduction under section 80GGC of Rs. Printed from counselvise.com 2 ITA No. 347/Jodh/2025 Asst. Year: 2020-21 20000000/- without considering facts of the case and our submissions. The disallowance made is bad in law and liable to be deleted. 3. The appellant crave leave to add, amend or vary on any ground of appeal at or before the time of hearing. 3. Having heard both the sides and perusal of record, we find that the appellant assessee had filed an appeal before the Ld. CIT(A) on 29.10.2022 against the original assessment order passed by the AO and thereafter the appellant opted for the benefit under the Direct Taxes Vivad Se Vishwas Scheme, 2024 (VSVS) under which a final order in Form 4 was issued on 19.02.2022 by the designated authority PCIT determining the tax arrears and granting immunity from further proceedings. 4. Consequently, the CIT(A) disposed of the pending appeal vide order dated 27.01.2025 by observing that the appellant had already been availed benefit under VSVS Scheme, 2024. 5. In our view, once the appeal is filed before the CIT(A), the assessment order stands merged with the appellate order to the extent of matters considered in appeal. The Ld. PCIT cannot revise an order which has merged with the appellate order, because the appellate authority has already exercised jurisdiction over it. Thus, the Ld. PCIT cannot invoke jurisdiction u/s 263 against such an order, which has merged into the appellate order. Our view gets Printed from counselvise.com 3 ITA No. 347/Jodh/2025 Asst. Year: 2020-21 support from the judgment delivered by the Hon’ble Apex Court in the following cases:  CIT Vs. Shri Arbuda Mills Ltd. (1998) 231 ITR 50 (SC)  CIT Vs. Alagendran Finance Ltd. (2007) 298 ITR 1 (SC)  CIT Vs. Vam Resorts & Hotels Pvt. Ltd. (2019) 414 ITR 715 (Del.) 6. In the present case, it is pertinent to mention that the PCIT had itself issued Form 4 on 19.02.2025 to the effect of finalization of declaration made by the assessee for the benefit under VSVS Scheme, 2024, and thus, the liability of the assessee gets crystallized and no further proceeding can be continued regarding the same assessment order on the issues. Meaning thereby that the PCIT cannot exercise revisional jurisdiction u/s 263 after the matter has been decided under the VSVS Scheme, 2024, since the assessment order no longer survives independently. 7. In the backdrop of the aforesaid discussion, we accept the grievances of the assessee as genuine and hold that that order passed by the Ld. PCIT u/s 263 is bad in law and, therefore, the impugned order passed by the Ld. PCIT is bad, illegal and void ab initio. Printed from counselvise.com 4 ITA No. 347/Jodh/2025 Asst. Year: 2020-21 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 26/02/2026. Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 26/02/2026. Nimisha Sr. PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER, Printed from counselvise.com "