2020 (1) TMI 1653 - AT - Income Tax

Tax Appeal Upheld: Original Assessment Reinstated, Subsequent Order Invalid

The Revenue's appeal against the Ld. CIT(A)'s decision to dismiss the appeal against the fresh assessment was ultimately unsuccessful. The Tribunal's ... Revision u/s 263 - consequent proceedings - direction to the AO to make a fresh assessment on the issue of foreign exchange fluctuation loss on O/S ECB, provision of Marked to Market Loss of foreign currency swaps and deduction u/s 10B - HELD THAT:- As rightly contended by assessee, the order passed by the AO u/s 143(3)/263 of the Act has become nullity as a result of the order in HIMADRI CHEMICALS & INDUSTRIES LTD. (NOW KNOWN AS HIMADRI SPECIALITY CHEMICAL LTD) [2018 (9) TMI 528 - ITAT KOLKATA] passed by the Tribunal setting aside the order passed by the Ld. Pr. CIT u/s 263 and consequently the proceedings arising from the said order including the appeal filed by the assessee against the order passed by the AO u/s 143(3)/263 before the Ld. CIT(A) has become infructuous as rightly held by the Ld. CIT(A) in his impugned order. The assessment order passed by the AO u/s 143(3) thus is restored by the order of the Tribunal and the second order passed u/s 143(3)/263 has become non-est which is liable to be cancelled. We, therefore, find no infirmity in the impugned order of the Ld. CIT(A) treating the appeal filed by the assessee before him against the order passed by the AO u/s 143(3)/263 as infructuous and upholding the same, we dismiss this appeal of the Revenue. Issues:1. Appeal against the order of Ld. CIT(A) dated 06.03.2019.2. Validity of the assessment order passed by the AO u/s 143(3)/263.3. Dismissal of the appeal by Ld. CIT(A) due to Tribunal's order dated 05.09.2018.4. Appeal by Revenue against Ld. CIT(A)'s decision.Analysis:1. The appeal was filed by the Revenue against the order of Ld. CIT(A) dated 06.03.2019. The assessee, a company engaged in manufacturing, declared a loss and book profit for the year. The original assessment u/s 143(3) determined the loss and book profit. Subsequently, the assessment was set aside by Ld. Pr. CIT for fresh assessment on specific issues. The fresh assessment was completed with revised loss and book profit figures. An appeal was filed against this fresh assessment, which was dismissed by Ld. CIT(A) as infructuous due to a Tribunal order setting aside the earlier order by Ld. Pr. CIT u/s 263.2. The validity of the assessment order passed by the AO u/s 143(3)/263 was challenged in the appeal. The Tribunal's order dated 05.09.2018 set aside the order passed by Ld. Pr. CIT u/s 263, rendering the subsequent proceedings, including the appeal against the fresh assessment, infructuous. The Ld. CIT(A) rightly held the appeal as infructuous, considering the nullity of the AO's order post the Tribunal's decision. The original assessment order passed by the AO u/s 143(3) was restored, and the subsequent order u/s 143(3)/263 was deemed non-est and liable to be cancelled.3. The dismissal of the appeal by Ld. CIT(A) was based on the Tribunal's decision dated 05.09.2018, which set aside the Ld. Pr. CIT's order u/s 263. The Tribunal's decision rendered the proceedings arising from the fresh assessment infructuous. The Ld. CIT(A) correctly treated the appeal as infructuous in light of the Tribunal's order, leading to the dismissal of the Revenue's appeal.4. The Revenue's appeal against Ld. CIT(A)'s decision was based on challenging the treatment of the appeal filed against the fresh assessment as infructuous. However, the Tribunal's decision on the Ld. Pr. CIT's order u/s 263 impacted the validity of the subsequent assessment order, leading to the dismissal of the Revenue's appeal. The Tribunal upheld the Ld. CIT(A)'s decision, resulting in the dismissal of the Revenue's appeal.