DCIT, CIRCLE-2(1)(2), SURAT V. M/S. SHAHLON INDUSTRIES PVT. LTD, SURAT

ITA 116/SRT/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2480 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-02-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 14-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SITA RAM MEENA
• Keywords: Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 116/SRT/2020 (AY 2013-14) (Hearing in Virtual Court) Deputy Commissioner of Income Tax, Circle-2(1)(2), Room No. 205, 2 th Floor, Aaykar Bhavan, Majura Gate, Surat-395001 Vs M/s Shahlon Industries Pvt. Ltd.303, Dawer Chambers, Nr. Sub Jail, Ring Road, Surat-395002 PAN : AAFCS 0163E Appellant / Revenue Respondent / assessee Assessee by Shri Mehul Shah, C.A. Revenue by Shri Sita Ram Meena, Sr-DR Date of hearing 11.02.2022 Date of pronouncement 11.02.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of ld. Commissioner of Income tax (Appeals)-2, Surat [‘CIT(A)’ for short] dated 17.03.2020for assessment year (AY) 2013-14, which in turn the assessment order under section 143(3) r.w.s. 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.08.2018. The Revenue has raised the following grounds of appeal:- “(i)On the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in treating the assessment order passed u/s 143(3) r.w.s.263 as “void-ab- initio” on the basis of Hon'ble ITAT’s order against the order of Pr.CIT-2, Surat passed/s 263 of the Act, whereas Pr.CIT has rightly exercised his jurisdiction under section 263 of the Act and the Revenue has preferred an appeal to the Hon'ble High Court, Gujarat against the decision of the ITAT. (ii) On the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in treating the assessment order passed u/s 143(3) r.w.s.263 as “void-ab- ITA No.116/SRT/2020 (A.Y.13-14) M/s Shahlon Industries Pvt. Ltd. 2 initio” on the basis of Hon'ble ITAT’s order against the order of Pr.CIT-2, Surat passed/s 263 of the Act, without appreciating the detailed findings after examining the Keyman Insurance premium paid to the in the assessment order. (ii) On the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in treating the assessment order passed u/s 143(3) r.w.s.263 as “void-ab- initio” on the basis of Hon'ble ITAT’s order against the order of Pr.CIT-2, Surat passed/s 263 of the Act, without appreciating the detailed findings after examining the expenditure on foreign travel to the extent of rs.16,91,785/- of the AO in the assessment order. (iv) On the facts and circumstances of the case and in Law, the Ld. CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A) -2 Surat maybe set-aside and that of the Assessing Officer’s order maybe restored.” 2. Brief facts of the case are that initially the assessment order was passed in this case under section 143(3) of the Act on 11.03.2016. Subsequently, the assessment order dated 11.03.2016 was revised by Ld. Pr. Commissioner of Income Tax- Surat-2 [‘PCIT’ in short] by exercising power under section 263 vide his order dated 20.03.2018. The Ld. PCIT while revising the assessment order under section 263 directed the Assessing Officer to frame the assessment order as de novo. The AO initiated de-novo proceedings in pursuance of order of ld PCIT made disallowance on account of “keyman insurance premium” of Rs.27,70,106/- and foreign travelling expenses of Rs.16,91,785/-. 3. In the meantime, the order passed by Ld. PCIT under section 263 was challenged by assessee before Tribunal, the appeal of assessee was registered as in ITA No.290/SRT/2018, wherein the order passed under section 263 dated 20.03.2018 was quashed by the Tribunal in its order dated ITA No.116/SRT/2020 (A.Y.13-14) M/s Shahlon Industries Pvt. Ltd. 3 27.11.2019. The assessee filed appeal before CIT(A),against the additions made by AO in pursuance of direction of Ld.PCIT. The Ld. CIT(A) by following the decision of this Tribunal that revision order on the basis of which the addition made in the assessment has been set aside, therefore the additions in assessment order under section 143(3) r.w.s. 263 vide order dated 17.03.2020 will not survive. Aggrieved by the order of Ld. CIT(A) the Revenue has filed the present appeal before the Tribunal. 4. We have heard the submissions of Ld. Senior Departmental Representative (Sr-DR) of the Revenue and Ld. Authorized Representative (AR) of assessee. The Ld. Sr-DR of the Revenue supports the order of Assessing Officer. And submits that he would furnish the information if any further appeal before the Hon'ble jurisdictional High Court is filed by revenue against the order passed by Tribunal in ITA No.290/SRT/2018 dated 27.11.2019 5. On the other hand, Ld. AR of the assessee submits that once the order passed under section 263 has beenquashed therefore subsequent action initiated in pursuance thereto is void ab initio. The Ld. CIT(A) appreciated the fact and deleted the addition in quantum assessment, which were made in pursuance of order under section 263. 6. We have considered the rival submissions of both the parties and perused the order of authorities below. There is no dispute that order passed by Ld. PCIT ITA No.116/SRT/2020 (A.Y.13-14) M/s Shahlon Industries Pvt. Ltd. 4 under section 263 dated 20.03.2018 has been quashed by Tribunal in ITA No.290/SRT/2018 in order dated 27.11.2019 we find that the Ld. CIT(A) while deleting the addition followed the decision of Hon'ble Tribunal dated 27.11.2019 (supra). Therefore, we do not find any merit in the grounds of appeal raised by Revenue and affirm the order of Ld. CIT(A). 7. In the result, the appeal of the Revenue is dismissed. Order pronounced in the court 11 th February, 2022 and result was placed on notice board. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 11/02/2022 Dkp. Out Sourcing P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)-Surat-4 4. CIT 5. DR 6. Guard File True copy/ By order // True Copy // Assistant Registrar, ITAT, Surat True copy/