ITO, WARD-5(5), CHANDIGARH, CHANDIGARH V. CEPHAM DAIRY DEVELOPMENT LIMITED, CHANDIGARH

ITA 347/CHANDI/2025

AI Insights

The case involves the Income Tax Department (Revenue) appealing against the order of the CIT (Appeals) which quashed a fresh assessment order concerning Cepham Dairy Development Ltd. for the assessment year 2016-17. Initially, the assessee declared a loss in their return, which was accepted in the assessment order. However, the CIT invoked section 263, leading to a fresh assessment order. This order was later challenged and set aside by the Tribunal, which led to the CIT (Appeals) quashing the subsequent assessment order. The Revenue's appeal to the Tribunal was based on the pending appeal against the Tribunal's earlier decision in the High Court, which did not affect the validity of the CIT (Appeals)'s decision to quash the fresh assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772280 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2016-2017
• Other Referred Cases: ITA No. 26/CHD/2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Keywords: Set aside; Revision of order
• Section: 143(3); 263

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 347/CHD/2025 Ǔनधा[रण वष[ / Assessment Year: 2016-17 The ITO, Ward 5(5), Chandigarh. Vs Cepham Dairy Development Ltd. House No. 2125/3, Sector 45-C, Chandigarh. èथायी लेखा सं./PAN NO: AAACC8571F अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : None Revenue by : Shri Vivek Vardhan, Addl.CIT, Sr.DR Date of Hearing : 21.08.2025 Date of Pronouncement : 27.08.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The Revenue is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 08.01.2025 passed for assessment year 2016-17. 2. The brief facts of the case are that assessee has filed its return of income electronically on 17.10.2016 declaring loss Printed from counselvise.com ITA No.347/CHD/2025 A.Y.2016-17 2 of Rs.13,13,667/-. An assessment order was passed on 15.11.2018 and returned loss was accepted. The ld. Commissioner took cognizance u/s 263 of the Act and observed that assessee had received share application money of Rs.1,36,00,000/- and it was pending for allotment of shares, hence, he issued a Show Cause Notice inviting the explanation of the assessee as to why assessment order be not set aside and AO be directed to pass a fresh assessment order. 3. After hearing the assessee, ld. Commissioner has passed the order u/s 263 of the Act on 29.03.2021 and set aside the assessment order. 4. This order of the Commissioner was challenged before the Tribunal by the assessee. Meanwhile, AO has passed assessment order u/s 143(3) read with Section 263 of the Act. The Tribunal has allowed the appeal of the assessee bearing ITA No. 26/CHD/2021 on 23.09.2022. It has set aside the order of the ld. PCIT passed u/s 263. Consequently, the AO would be denuded from his power to pass any fresh order because the very foundation of the AO has been extinguished. In other words, he was supposed to pass assessment order on Printed from counselvise.com ITA No.347/CHD/2025 A.Y.2016-17 3 the direction of the order of the ld. CIT but that order of ld. CIT has been quashed. Therefore, there was no power to the AO to pass a fresh assessment order. The ld. CIT appreciated these facts and quashed the consequential assessment order. 5. The Revenue has challenged the order of the CIT (Appeals) simply for the reason that appeal against the order of the ITAT passed on an appeal of the assessee against 263 proceeding is pending in the Hon'ble High Court. But as on today, there is no order on the basis of which an assessment can be passed. Accordingly, we are of the view that ld. CIT (Appeals) has rightly quashed the fresh assessment order passed u/s 143(3) read with Section 263 of the Act. We do not find any merit in this appeal. It is dismissed. 6. In the result, appeal of the Revenue is dismissed. Order pronounced on 27.08.2025. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” Printed from counselvise.com ITA No.347/CHD/2025 A.Y.2016-17 4 आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "