2017 (11) TMI 1709 - HC - Income Tax

Revision u/s 263 - Held that - It is agreed between the learned counsel for the appellant and the learned counsel for the assessee that the order set aside by the Commissioner of Income Tax (Appeals) and confirmed by the Tribunal by the orders impugned in these appeals, was passed consequent upon the remand made by the Commissioner of Income Tax-I under Section 263 and that the said remand order was set aside by the Tribunal, which order in turn was affirmed by this Court by its judgment. Inasmuch as, the very order of remand in pursuance of which the Assessing Officer has passed a fresh assessment order was set aside, the consequential order of the Assessing Officer would cease to have any legs to stand.

Summary

Issues: Appeal against common order of Income Tax Appellate Tribunal for assessment years 2006-07 and 2007-08.

Analysis:
1. Background: The appeals by the Revenue were filed against a common order dated 25.02.2016 of the Income Tax Appellate Tribunal, Visakhapatnam Bench, pertaining to the assessment years 2006-07 and 2007-08.

2. Agreement: During the hearing, both the appellant's counsel and the respondent-assessee's counsel agreed that the order set aside by the Commissioner of Income Tax (Appeals) and confirmed by the Tribunal was a result of a remand made by the Commissioner of Income Tax-I under Section 263 of the Income Tax Act, 1961. The Tribunal had set aside this remand order, which was further affirmed by the High Court in a previous judgment.

3. Consequential Effect: The High Court observed that since the order of remand, which led to the Assessing Officer passing a fresh assessment order, was set aside, the subsequent assessment order by the Assessing Officer would be invalid.

4. Decision: Based on the above reasoning, the High Court concluded that the orders of the Tribunal being challenged in the appeals could not be interfered with, and consequently, the appeals were dismissed.

This judgment clarifies the legal implications of setting aside a remand order under Section 263 of the Income Tax Act, emphasizing that any assessment order made as a consequence of such remand would be deemed invalid. The decision underscores the importance of procedural compliance and adherence to legal requirements in the assessment process to maintain the validity of tax assessments.