2023 (6) TMI 807 - AT - Income Tax

Validity of final assessment order passed by AO u/s 144C(13)/263/143(3) in pursuance to the directions of DRP - assessment order under challenge was passed in pursuance to the directions of CIT u/s 263 - Assessee submitted while deciding assessee s appeal against the order passed u/s 263 Tribunal set aside the order passed u/s 263 and restored the assessment order, which was subjected to proceedings u/s 263 - HELD THAT - We find, the assessment order under challenged in the present appeal was passed by the AO in pursuance to an order passed by the Learned CIT under Section 263 of the Act. It is evident, against the revisionary order passed under Section 263 of the Act, the assessee had preferred an appeal before the Tribunal. While deciding assessee s appeal 2022 (6) TMI 1407 - ITAT DELHI has set aside the order u/s 263 and restored the assessment order, which was subjected to revisionary proceedings. Thus, when the revision order passed u/s 263 itself, is not in existence, the consequential orders passed in pursuance to the revision order, including, the impugned assessment order cannot survive. Assessment order quashed.

Summary

Issues involved:
Challenge to final assessment order under Sections 144C(13)/263/143(3) of the Income-Tax Act,1961 for assessment year 2015-16 based on directions of the Dispute Resolution Panel (DRP).

Analysis:

1. Background and Nature of Dispute:
The appeal was filed against the final assessment order dated 27.01.2023 passed by the Assessing Officer under Sections 144C(13)/263/143(3) of the Income-Tax Act,1961 for the assessment year 2015-16. This order was made in compliance with the directions of the Dispute Resolution Panel (DRP).

2. Arguments Presented:
The counsel for the assessee argued that the assessment order was issued following the directions of the Commissioner of Income Tax (International Taxation) under Section 263 of the Act. The Tribunal had previously set aside the order passed under Section 263 and reinstated the original assessment order. Despite this, the DRP and the Assessing Officer proceeded with their respective directions/orders, rendering the proceedings moot.

3. Judicial Findings:
Upon reviewing the submissions, it was noted that the assessment order under challenge was a result of the order dated 30.03.2021 passed by the CIT under Section 263 of the Act. The Tribunal, in a previous decision, had set aside the Section 263 order and restored the original assessment order. As the revisionary order under Section 263 was no longer valid, subsequent orders, including the impugned assessment order, could not stand.

4. Decision and Outcome:
In light of the above, the ITAT quashed the assessment order dated 27.01.2023 that was the subject of the appeal. Consequently, the appeal was allowed in favor of the assessee. The order was pronounced in open court on 03rd March, 2023.

This detailed analysis of the judgment highlights the issues, arguments presented, judicial findings, and the ultimate decision made by the ITAT in response to the appeal challenging the final assessment order.