DCIT, CIRCLE-1(1)(2), SURAT V. GUJARAT JHM HOTELS LTD., SURAT

ITA 127/SRT/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2471 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-02-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 17-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRIHIREN R VEPARI
• Keywords: Tax effect; 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. 127/SRT/2020 (AY 2013-14) (Hearing in Virtual Court) Deputy Commissioner of Income Tax, Circle-1(1)(2), Room No. 114, 1 st Floor, Aaykar Bhavan, Majura Gate, Surat-395001 Vs Gujarat JHM Hotels Ltd., Park, Ambica Niketan, Athwalines, Surat-395002 PAN : AAACG 8562 E Appellant / Revenue Respondent / assessee Assessee by ShriHiren R Vepari, C.A. Revenue by Shri Sita Ram Meena, Sr-DR Date of hearing 18.02.2022 Date of pronouncement 18.02.2022 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)-1, Surat[‘CIT(A)’ for short] dated 27.02.2020for assessment year (AY) 2013-14, which in turn arises against the assessment orderdated 28.06.2018 passed under section 143(3) r.w.s. 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for assessment year (A.Y.) 2013-14. The Revenue has raised the following grounds of appeal:- “1. “Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is right in allowing the appeal of the assessee without deciding the case on merits merely for the reason that Hon'ble ITAT has cancelled the order passed u/s 263 of the IT Act and therefore, order passed u/s 143(3) r.w.s. 263 of the IT Act is ITA No.127/SRT/2020 (A.Y.13-14) Gujarat JH Hotels Ltd. 2 invalid and non-est, ignoring the fact that the Revenue’s appeal against the order of the Hon'ble ITAT is pending before the Hon'ble High Court of Gujarat? 2.The appellant craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal.” 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-1 [‘PCIT’ in short] by exercising power under section 263 vide his order dated 26.03.2018. 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 addition on account of “loss on revaluation of foreign currency loan in the profit and loss account” of Rs.2.21 Crore lakh. 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.301/SRT/2018, wherein the order passed under section 263 dated 26.03.2018 was quashed by the Tribunal in its order dated 19.07.2019. 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 ITA No.127/SRT/2020 (A.Y.13-14) Gujarat JH Hotels Ltd. 3 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 28.06.2018 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 the order passed by Tribunal in quashing the revision order dated 19.07.2019 was challenged before the Hon'ble jurisdictional High Court in R/Tax Appeal No. 108 of 20120, however, the same has been dismissed due to low tax effect vide order dated 19.02.2021 the Ld. CIT(A) Sr DR for the revenue submits that he rely on the order of assessing officer. 5. On the other hand, Ld. AR of the assessee submits that once the order passed under section 263 has been quashed 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. Even otherwise, the appeal filed by the revenue in challenging the order of the Tribunal dated 19.07.2019 has already been dismissed, though, the said appeal is dismissed due to low tax effect, but facts remained the same that once, the order passed under section 263 by Ld. ITA No.127/SRT/2020 (A.Y.13-14) Gujarat JH Hotels Ltd. 4 CIT(A) PCIT, is set- aside, all subsequent order passed pursuant thereto would not survive. 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 under section 263 dated 26.03.2018 has been quashed by Tribunal in ITA No.301/SRT/2018 in order dated 19.07.2019. We find that the Ld. CIT(A) while deleting the addition followed the decision of Hon'ble Tribunal dated 19.07.2019 (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 18 th February, 2022at the closing of hearing. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 18/02/2022 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