DY COMMISSIONER OF INCOME TAX CIRCLE 3 NAGPUR, NAGPUR V. MAYUR KHARA, YAVATMAL

ITA 238/NAG/2025

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax, Nagpur against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which had allowed the assessee's appeal. The core issue revolved around the validity of an assessment order passed under section 144 read with section 263 of the Income Tax Act, 1961, which was based on a revisionary order dated 17/02/2021. This revisionary order was later quashed by the tribunal in a separate case (ITA No. 64/Nag/2021) dated 28/06/2022. The revenue's appeal was primarily focused on the contention that the CIT(A) erred in law by not considering the pending appeal against the tribunal's earlier decision in the Bombay High Court.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 844823 (ITAT-NAGPUR)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 09-04-2025
• Other Referred Cases: ITA No. 64/Nag/2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURJIT KUMAR SAHA
• Assessee Lawyers: SHUBHAM JAIN
• Keywords: Set aside; Revision of order
• Section: 144; 263

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “NAGPUR” BENCH, NAGPUR BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI KHETTRA MOHAN ROY, ACCOUNTANT MEMBER ITA No. 238/NAG/2025 (A.Y.: 2016-17) (Physical hearing) Dy. Commissioner of Income Tax, Circle 3, Nagpur Room No. 3, BSNL RTTC Building, Seminary Hills, Nagpur – 440006. Vs Mayur Khara Datta Chowk, Yavatmal – 445001. PAN: ABWPK8869N Appellant /Revenue Respondent /Assessee Assessee by Shri Shubham Jain, Advocate Revenue by Shri Surjit Kumar Saha, SR. DR Date of hearing 24.02.2026 Date of pronouncement 17.03.2026 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the revenue is directed against the order of ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [for short “CIT(A)”], dated 08.01.2025, for assessment year 2016-17. The revenue has raised the following grounds of appeal: “1. Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) vide order dated 18/01/2025 erred in allowing the assessee's appeal and holding that the assessment order passed u/s 144 rws 263 dated 31/03/2022 of the 1.T. Act is infructuous despite the order u/s 263 not attaining finality as order of Hon'ble ITAT was under appeal before the Hon'ble Bombay High Court? 2. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in not ascertaining before passing order u/s 250 whether or not appeal was filed by Revenue on Hon'ble ITAT's Order dated 28/6/2022 quashing the order u/s 263 of the I.T. Act, 1961? 3. Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) vide its order dated 18/01/2025 erred in allowing the assessee's appeal and holding that the assessment order passed u/s 144 rws Printed from counselvise.com ITA No.238/Nag/2025 (AY 2016-17) Mayur Khara 2 263 dated 31/03/2022 of the 1.T. Act is infructuous only on the ground that the ITAT had quashed the revisionary order passed u/s 263 dated 17/02/2021, failing to realise that the said Hon'ble ITAT's order has been challenged by the Department before the Hon'ble Bombay High Court and is pending adjudication? 4. Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in law in setting aside the assessment without adjudicating the merits of the case and treating the appeal as infructuous despite pendency of appeal on order of Hon'ble ITAT in the Hon'ble Bombay High Court? 5. The Department craves leave to add, amend, vary and/or alter any of the above grounds of appeal at the time of hearing.” 2. Rival submissions of both the parties have been heard and record perused. At the outset, on hearing, the ld. Authorised Representative (AR) of the assessee submits that assessment was completed u/s. 144 r.w.s. 263 on 31.03.2022. The assessment was completed in pursuance of order of PCIT u/s. 263, dated 17.02.2021. The order of ld. PCIT dated 17.02.2021 has already been set aside/quashed by this Tribunal in order dated 28.06.2022 in ITA No. 64/Nag/2021. Once the order u/s. 263 has been quashed the assessment completed pursuance thereto will not survive. Thus, the ld. CIT(A) allowed relief by following the decision of Tribunal. The ld. AR submits that grounds of appeal raised by the revenue is covered by the decision of Tribunal in assesses own case in ITA No. 64/Nag/2021, wherein the order under section 263 dated 17.02.2021 has been quashed. 3. On the other hand, ld. Senior departmental representative (SR. DR) for revenue submits that department may have filed appeal against the order of Tribunal, before High Court, therefore, the Assessing Officer (AO) want to keep the issue alive. Printed from counselvise.com ITA No.238/Nag/2025 (AY 2016-17) Mayur Khara 3 4. We have considered the rival submissions of both the parties and considering the fact that once the order u/s. 263 dated 17.02.2021, which was basis for passing assessment order u/s. 144 r.w.s. 263 dated 31.03.2022, is set aside/ quashed, the assessment order will not survive. Hence, we do not find any merit in the ground of appeal raised by revenue. 5. In result, the appeal of the revenue is dismissed. Order was pronounced on 17.03.2026 as per Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1963. Sd/- KHETTRA MOHAN ROY ACCOUNTANT MEMBER Sd/- PAWAN SINGH JUDICIAL MEMBER Mumbai, Dated: 17/03/2026 Karishma J. Pawar, SR. PS 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. By Order Assistant Registrar/Senior Private Secretary ITAT, Nagpur Printed from counselvise.com "