2016 (2) TMI 1183 - AT - Income Tax

Revision u/s 263 - Held that - As decided in V.D. REDDY & CO VERSUS DCIT-1, CIRCLE-1 (1) VISAKHAPATNAM 2013 (5) TMI 971 - ITAT VISAKHAPATNAM AO has taken one of the possible views while completing the assessment of the years under consideration and has considered all aspects while completing the assessment. Accordingly, we set aside the revision orders passed by Learned CIT for both the years under consideration.

Summary

Issues involved:
Appeals filed by the revenue and cross objections filed by the assessee against the order of CIT(A) for assessment years 2006-07 & 2007-08.

Analysis:

1. The assessee, a firm engaged in various business activities, filed its income tax return which was processed under section 143(1) of the Income Tax Act, 1961. Subsequently, the assessment was completed under section 143(3) r.w.s. 147 by estimating profit at 10% of gross receipts due to the absence of books of accounts and vouchers. The Commissioner, exercising powers under section 263, set aside the assessment order and directed a de-novo assessment. The Assessing Officer (A.O.) then passed the assessment order under section 143 r.w.s. 263. The assessee challenged the Commissioner's order before the ITAT, which quashed the order under sections 263 of the Act, thereby allowing the appeals filed by the assessee.

2. The CIT(A) considered the order passed by the A.O. under section 263 following the Commissioner's order and set aside the impugned assessment. The CIT(A) noted the ITAT's decision to set aside the Commissioner's order under section 263 for the assessment years in question. Consequently, the assessment order passed by the A.O. under section 263 was deemed to lack legal validity and was set aside by the CIT(A).

3. The ITAT upheld the CIT(A)'s decision, finding no infirmity in the order passed. Therefore, the appeals filed by the revenue were dismissed. The cross objections filed by the assessee in support of the CIT(A)'s order were also deemed infructuous and dismissed accordingly.

In conclusion, the ITAT dismissed the appeals filed by the revenue and the cross objections filed by the assessee, upholding the CIT(A)'s decision to set aside the assessment order passed under section 263 due to the ITAT's earlier ruling.