2019 (12) TMI 1564 - AT - Income Tax

Revision u/s 263 - reopening of assessment u/s 147 initiated pursuant to the revisional order of ld. Ld. Pr. CIT-3, Kolkata, passed u/s 263 - HELD THAT - Assessee had preferred an appeal challenging the revisional order of ld. Pr. CIT-3 dated 30.03.2015 before this Tribunal; and the Tribunal was pleased to set aside the revisional order of the ld. Pr. CIT on 06.04.2016. Consequently the order of the AO passed giving effect to the ld. Pr. CIT s order dated 30.03.2015 became ab-initio-void and resultantly non-est in the eyes of law. The principle applicable is based on legal maxim Sublato Fundamento Credit Opus meaning, in case a foundation is removed, the superstructure falls. In the case of Badrinath vs Government Of Tamil Nadu And Ors. 2000 (9) TMI 1044 - SUPREME COURT held that once the basis of a proceeding is gone, all consequential orders and acts would fall on the ground automatically which is applicable to judicial/quasi-judicial proceedings. In case in hand, the AO has passed the order dated 29.01.2016 by giving effect to the order of the ld. Pr. CIT dated 30.03.2015 and when that order of the ld. Pr. CIT has been set aside by the Tribunal by order dated 06.04.2016, the foundation of the AO s order dated 29.01.2016 has been removed and therefore all consequential action falls and therefore the ld. CIT(A) rightly allowed the appeal of the assessee - Thus dismiss all the appeals of the Revenue.

Summary

Issues:
Appeals by Revenue against CIT(A) order for AY 2007-08 and subsequent years.

Analysis:
The appeals were filed by the Revenue against the order of the CIT(A)-3, Kolkata for AY 2007-08, 2008-09, and 2009-10. The primary issue raised was whether the CIT(A) was justified in allowing the appeal against the revision assessment order of the Assessing Officer dated 29.01.2016, based on the decision of the ITAT that set aside the order passed by the Principal CIT-3, Kolkata on 30.03.2015. The Tribunal held that once the foundation of a proceeding is removed, all consequential orders and acts would fall automatically. Citing the legal maxim "Sublato Fundamento Credit Opus," the Tribunal referred to the case of Badrinath vs Government Of Tamil Nadu And Ors. AIR 2000 SC 3243, where the Supreme Court held that if the basis of a proceeding is gone, all consequential orders would also fall. Consequently, since the Tribunal set aside the revisional order of the Principal CIT, the AO's order giving effect to that revisional order became void ab initio. Therefore, the CIT(A) rightfully allowed the appeal of the assessee, and the Tribunal upheld the decision, dismissing all appeals of the Revenue.

In conclusion, the Tribunal dismissed the appeals of the Revenue, upholding the decision of the CIT(A) for the relevant assessment years. The order was pronounced in the open court on 20th December 2019.