Revision under section 263 can render a pending income-tax appeal infructuous when the original assessment no longer survives.

Where an assessment is set aside in revision under section 263 of the Income-tax Act, 1961 while the assessee's appeal against that assessment is still pending, the appellate proceeding cannot continue on the merits because the original assessment order no longer subsists for examination. The effect of the revisional order is that the pending appeal becomes infructuous, as there is no live assessment order before the Commissioner (Appeals) for adjudication. The issue was answered in the affirmative, in favour of the assessee and against the department.

---

---

Issues: Whether, after the Commissioner set aside the assessment under section 263 of the Income-tax Act, 1961, the assessee's pending appeal before the Commissioner (Appeals) became infructuous.

Analysis: The assessment was set aside and the case remanded by the Commissioner under section 263 while the appeal before the Commissioner (Appeals) was still pending. In that situation, there was no subsisting assessment order for the appellate authority to examine on merits, and the appeal could not survive independently of the revisional order.

Conclusion: The pending appeal became infructuous. The question was answered in the affirmative, in favour of the assessee and against the department.

Ratio Decidendi: Once the assessment is set aside in revision under section 263 of the Income-tax Act, 1961, a pending appeal against that assessment becomes infructuous because the original assessment order ceases to subsist for appellate adjudication.

---