UTKAL AUTOMOBILES PRIVATE LIMITED,ADITYAPUR INDUSTRIAL AREA V. ACIT/DCIT CIRCLE-1, JAMSHEDPUR

ITA 170/RAN/2025

AI Insights

The case involves Utkal Automobiles Private Limited, which appealed against the order passed by the Pr. CIT, Ranchi under section 263 of the Income Tax Act for the assessment year 2020-2021. The appeal was heard by the Income Tax Appellate Tribunal, Ranchi Bench. The core issue was whether the Pr. CIT was justified in invoking section 263 powers based on an audit objection, despite the fact that the issue had already been examined by the AO in the original assessment order under section 143(3) and also in section 144A proceedings. The Tribunal found that the Pr. CIT's order did not meet the criteria of being 'erroneous' as required under section 263, leading to the quashing of the order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716543 (ITAT-RANCHI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2020-2021
• Appeal Filed On: 21-05-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT DATTA; LD
• Assessee Lawyers: R.R. MITTAL
• Keywords: Opportunity of being heard; Audit objection
• Section: 263

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE S/ RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER Utkal Automobiles Private Limited, West Singhbhumi, Jamshedpur PAN/GIR No. (Appellant Per Bench This is an appeal filed by t the ld Pr. CIT, Ranchi u/s.263 No.ITBA/Rev/F/Rev5/2024 2021. 2. Shri R.R.Mittal, CIT DR represented on behalf of the revenue. IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI S/HRI GEORGE MATHAN, JUDICIAL MEMBER RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA No.170/RAN/2025 Assessment Year : 2020-2021 Utkal Automobiles Private Limited, West Singhbhumi, Vs. ACIT/DCIT, Circle Jamshedpur .AAACU 2665 C (Appellant) .. ( Respondent Assessee by : Shri R.R.Mittal, Adv Revenue by : Shri Rajat Datta, ld CIT Date of Hearing : 22/08/202 Date of Pronouncement : 22/08/2 O R D E R This is an appeal filed by the assessee against the order passed by Pr. CIT, Ranchi u/s.263 dated 31.3.2025 No.ITBA/Rev/F/Rev5/2024-25/107532749(1) for the assessment year Shri R.R.Mittal, ld AR appeared for the assessee. Shri represented on behalf of the revenue. P a g e 1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, , JUDICIAL MEMBER AND RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ACIT/DCIT, Circle-1, Respondent) : Shri Rajat Datta, ld CIT DR 2025 2025 he assessee against the order passed by 31.3.2025 in Din for the assessment year 2020- ed for the assessee. Shri Rajat Datta, ld Printed from counselvise.com ITA No.170/RAN/2025 Assessment Year : 2020-2021 P a g e 2 | 4 3. It was submitted by ld AR that the issue which has been raised in the proceedings u/s.263 of the Act has already been considered by the Assessing Officer in his order u/s.143(3) of the Act. This issue was also before the Additional Commissioner of Income Tax in 144A proceedings. It was the submission that the Pr. CIT has invoked his powers u/s.263 of the Act for reexamination of the issue which has been examined by the Assessing Officer and opinion has been formed by the Assessing Officer. 4. In reply, ld CIT DR submitted that the Assessing Officer has not done his job in the expected form. It was the further submission that the order of Pr. CIT is liable to be upheld. 5. In reply also, ld AR submitted that the order passed u/s.263 has been passed on audit objection. It was the submission that on an audit objection, the proceedings u/s.263 of the Act cannot be done. 6. We have considered the rival submissions. At the outset, a perusal of the facts in the present case clearly shows that the order u/s.263 of the Act more so the proceedings have been initiated on the basis of revenue audit party objection, which is evident from para 4.4 of the order of the ld Pr. CIT. Admittedly, the proceedings u/s.263 of the Act cannot be invoked in respect of objection raised by the Revenue audit party. Further, a perusal of the order of Pr. CIT in para 5.2 shows that the Pr. CIT has not held that the order passed by the AO u/s.143(3) of the Act is erroneous. Printed from counselvise.com ITA No.170/RAN/2025 Assessment Year : 2020-2021 P a g e 3 | 4 He only says that the order is prejudicial to the interest of the Revenue. For proceedings u/s.263 of the Act, it is compulsory that the order must be erroneous and prejudicial to the interest of the revenue insofar as the Pr. CIT has not found the order to be erroneous. We are of the considered view that on this count also, the order u/s.263 cannot be sustained. 7. On perusal of para 5.4 of the order of Pr. CIT shows that the Pr. CIT has directed the Assessing Officer to reexamine the issues raised in an order u/s.263 after giving reasonable opportunity of being heard to the assessee. The fact that the Pr. CIT has directed the AO to reexamine the issues clearly shows that the Pr. CIT had recognized that the issue had been examined by the AO in his original assessment order. On this count also, for the purpose of reexamination of order u/s. 263 of the Act cannot be passed by invoking the power u/s.263 of the Act. Consequently, the order u/s.263 of the Act is unsustainable and we quash the same. 8. In the result, appeal of the assessee stands allowed. Order dictated and pronounced in the open court on 22/08/2025. Sd/- sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi ; Dated 22/08/2025 B.K.Parida, SPS (OS) Printed from counselvise.com ITA No.170/RAN/2025 Assessment Year : 2020-2021 P a g e 4 | 4 Copy of the Order forwarded to : By order Sr.Pvt.Secretary ITAT, Ranchi 1. The Appellant : Utkal Automobiles Private Limited, West Singhbhumi, Jamshedpur 2. The Respondent: ACIT/DCIT, Circle-1, Jamshedpur 3. The CIT(A)- 4. Pr.CIT, rANCHI 5. DR, ITAT, Ranchi 6. Guard file. //True Copy// Printed from counselvise.com "