2018 (3) TMI 213 - AT - Income Tax

Revision u/s 263 - Addition u/s 36(1)(viia) - Held that - Since the A.O. passed the order in pursuance to the directions issued under section 263 and passed the assessment order under section 143(3)/263 dated 24th October, 2013, therefore, the present proceedings before the authorities below have become infructuous because the order under section 263 have been quashed by the Tribunal. Assessee, therefore, correctly stated that since the order under section 263 have been set aside by the Tribunal, therefore, original assessment order would survive. We, accordingly, set aside the orders of the authorities below and quash the resultant proceedings under section 143(3)/263 of the I.T. Act. - Decided in favour of assessee.

Summary

Issues:
Challenge to addition under section 36(1)(viia) of the I.T. Act in the A.Y. 2009-2010.

Analysis:
The appeal was directed against the order of the Ld. CIT(A) confirming the addition under section 36(1)(viia) of the I.T. Act. The original assessment order under section 143(3) was passed by the A.O. accepting a loss of ?13,80,69,000, which was later subject to proceedings under section 263 of the I.T. Act regarding the deduction claimed under section 36(1)(viia). The Ld. CIT set aside the assessment order under section 263 and sent the matter back to the A.O. for re-examination. The Tribunal, in a related case, set aside the order under section 263 and allowed the appeal of the assessee. The Assessee argued that since the Tribunal quashed the order under section 263, the proceedings before the A.O. and Ld. CIT(A) had become infructuous, and the original assessment order should stand.

The Ld. D.R. did not contest the Assessee's argument. The Tribunal observed that the A.O. passed the order based on directions under section 263, and since the Tribunal had quashed the order under section 263, the proceedings before the authorities had become infructuous. Therefore, the Tribunal set aside the orders of the authorities below and quashed the resultant proceedings under section 143(3)/263 of the I.T. Act, allowing the appeal of the assessee. The Tribunal concluded that the original assessment order would survive in light of the Tribunal's decision to set aside the order under section 263.

In conclusion, the Tribunal allowed the appeal of the assessee, stating that the proceedings before the authorities had become infructuous due to the quashing of the order under section 263 by the Tribunal. The original assessment order was upheld, and the appeal was allowed.