DEPUTY COMMISSIONER OF INCOME TAX-5(2)(1), MUMBAI V. M/S VODAFONE INDIA LIMITED (NOW KNOWN AS M/S VODAFONE IDEA LIMITED, MUMBAI

ITA 64/MUM/2023

AI Insights

The case involves an appeal by the revenue against the order of the Ld. CIT (A), which had quashed the order passed under section 143(3) r.w.s. 263 of the Income Tax Act, 1961. The original assessment was revised following a section 263 order by the Ld. PCIT-8, Mumbai, which was later set aside by the ITAT. The CIT (A) relied on judicial precedents to declare the consequential order as infructuous, leading to the revenue's appeal to the ITAT. The ITAT upheld the CIT (A)'s decision, referencing similar cases and the principle that if the base order is set aside, any consequential actions are null and void.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123530 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 28-02-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2023
• Other Referred Cases: CIT vs Aditi Developers, CIT vs Saravana Developers
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Depreciation; Bad and doubtful debts; Set aside
• Section: 143(3); 250; 144C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F”, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No. 64/Mum/2023 (A.Y. 2011-12) DCIT-5 (2) (1) 5 th Floor, Room No.571, Aayakar Bhavan Mumbai-400 020 ...... Appellant Vs. M/s Vodafone India Limited (Now known as M/s Vodafone Idea Ltd.) 10 th Floor, Birla Centurion, Pandurang Budhkar Marg, Worli, Mumbai-400 030 PAN: AAACN2100B ..... Respondent Revenue by : Shri Ankush Kapoor, CIT-DR Respondent by : Shri Ninad Patade Date of hearing : 01/03/2023 Date of pronouncement : 21/03/2023 ORDER PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of National Faceless Appeal Centre; Delhi (for short ‘NFAC”) dated 09.11.2022 u/s. 143(3) 2 ITA No. 64/Mum/2023 r.w.s. 263 of the Income Tax Act, 1961 (for short ‘the Act’) for A.Y. 2011-12. 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 Ld. CIT (A) has justified by Pronouncing the order passed u/s 143(3)/263 as infructuous and allowing the appeal filed by the assessee without going in the merit of the case and on the sole ground that the Hon'ble ITAT has quashed the order passed u/s 263? 2. "Whether, on the facts and in the circumstance of the case and in law, the Ld. CIT (A) was justified on quashing the order passed u/s 143(3) r.w.s 263 referring to Hon'ble Bombay High Court order in the case of CIT VS Aditi Developers (39 taxmann.com 109) wherein order passed u/s 263/143(3) had been set aside and not quashed? 3. The appellant prays that the order of the Ld.CIT (A) be set aside and the orderof the AO be restored. 4. The appellant craves leave to add, alter, modify or amend any grounds ofappeal which may be necessary” 2. Brief facts of the case are that the assessee company filed its return of income for the relevant period on 20.11.2012 declaring loss of Rs. 235.15 Crores; thereafter the same was revised on 21.03.2103 at a loss of Rs. 181.54 Crores. Subsequently case of the assessee was selected for scrutiny and assessed at income of Rs. 308,62,72,670/- u/s. 143(3) r.w.s. 144C (13) of the Act. 3. Thereafter Ld. PCIT-8, Mumbai vide order dated 28.03.2018 concluded that the order passed by the then AO was erroneous in so far as prejudicial to the interest of Revenue for the purposes of section 263 of the Act. Pursuant to this an order u/s. 143(3) r.w.s. 263 of the Act was passed vide order dated: 31.12.2018 and additions on account of excess claim of depreciation and bad debts was made amounting to Rs. 268,28,31,094/- and 33,62,72,551/- respectively. 3 ITA No. 64/Mum/2023 4. Against the order of Ld. PCIT passed under sec 263 assessee was already in appeal before ITAT challenging the action of Ld. PCIT. On 28-08-2020 coordinate bench of ITAT allowed the appeal of the assessee and declare the order of Ld. PCIT u/s. 263 as bad in law. As assessment in pursuance to directions given u/s. 263 was already been made, assessee had to approach the Ld. CIT (A) against the order passed u/s. 143(3) r.w.s. 263 of the Act. 5. The Ld. CIT (A) relying on the decision of honorable jurisdictional high court in the case of CIT Vs Aditi Developers reported in 39 taxmann.com 109 and honorable Karnataka High court in the case of CIT Vs Saravana Developers reported in 68 Taxxmann.com 148, held that were the revisionary order u/s 263 has been set aside, the consequential order passed pursuant to such revisionary order automatically becomes infructuous. 6. We have gone through the order of AO passed u/s 143(3) r.w.s. 263, order of coordinate bench of ITAT and order of Ld. CIT(A) u/s 250 along with the citations in the case of CIT Vs Aditi Developers reported in 39 taxmann.com 109 and CIT Vs Saravana Developers reported in 68 Taxxmann.com 148. We found the ratios laid down in both the cases mentioned (supra) are identical to the facts of the assessee. Otherwise also it’s a settled preposition of law that where the base itself is demolished any consequential action will be null and void. 7. In the light of above facts and judicial pronouncements in the cases relied upon mentioned (supra) we don’t see any reason to interfere in the order of Ld. CIT (A). Further the Ld. DR is failed to differentiate the citations mentioned supra or bring any citation to our knowledge favoring the appeal of the revenue. In the light of preposition discuss above we sustain the order of Ld. CIT (A). 4 ITA No. 64/Mum/2023 8. In the result appeal of the revenue is dismissed. Order pronounced in the open court on 21 st day of March, 2023. Sd/- Sd/- (PAVAN KUMAR GADALE) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, दिन ांक/Dated: 21/03/2023 Mahesh R. Sonavane Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकर आयुक्त CIT 4. दवभ गीय प्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्ड फ इल/Guard file. BY ORDER, //True Copy// (Dy. /Asstt. Registrar) ITAT, Mumbai