2014 (7) TMI 726 - HC - Income Tax

High Court Upholds ITAT Decision on Section 263 Order, Assessee Bank Appeal Allowed

The High Court upheld the ITAT's decision to set aside the Commissioner's order under section 263 of the Income Tax Act, finding subsequent proceedings ... Revision u/s 263 – continuity of subsequent proceeding when original order was set aside based on which order u/s 263 was passed - Held that:- The Tribunal had rightly held that the proceedings originating from the order passed u/s 263 of the Act including the assessment order made by the AO u/s 143(3) r/w section 263 of the Act had become non-est in the eyes of law – thus, no substantial question arises for consideration – Decided against Revenue. Issues:Appeal under section 260A of the Income Tax Act 1961 challenging the order of the Income Tax Appellate Tribunal (ITAT) dated 19th August 2011 for Assessment Year 2005-06.Analysis:The Commissioner of Income Tax-2 filed an appeal under section 260A of the Income Tax Act 1961 against the ITAT's order dated 19th August 2011. The appeal arose from the Assessing Officer's order under section 143(3) of the Act, following directions given by the Commissioner under section 263. The ITAT set aside the Commissioner's order under section 263 on 15th July 2011, holding that subsequent proceedings, including the assessment order made by the Assessing Officer, were non-est in the eyes of the law. Consequently, the Assessee Bank's appeal was allowed by the ITAT.In a separate judgment in Income Tax Appeal No.250 of 2012, the High Court upheld the ITAT's order dated 15th July 2011 and dismissed the Revenue's appeal. The High Court found no substantial question of law for consideration in the current appeal, based on the reasons stated in the earlier judgment. Therefore, the High Court dismissed the appeal, with no order as to costs.