PCIT must decide jurisdictional competence before revising assessment order under section 263 following DRP directions

ITAT Mumbai remanded the matter to PCIT after finding that a crucial jurisdictional issue was not disposed of in the revision order u/s 263. The tribunal held that PCIT failed to decide whether it had competence to revise an assessment order passed u/s 143(3) r.w.s. 144C(13) following DRP directions. Since this jurisdictional question goes to the root of the matter and both parties agreed on remand, the tribunal restored the case to PCIT for fresh consideration of all grounds including the jurisdictional issue.

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Issues involved:
- Jurisdiction of Ld. PCIT in passing the order under section 263 of the Income Tax Act for AY 2011-12 and AY 2012-13.

Detailed Analysis:

Issue 1: Jurisdiction of Ld. PCIT in passing the order under section 263 for AY 2011-12
- The appeals by the assessee were against the order of Ld. PCIT for AY 2011-12 and AY 2012-13.
- Both appeals were clubbed, heard, and disposed of together due to identical issues raised.
- The main contention was the challenge to the jurisdiction of Ld. PCIT in passing the order under section 263 of the Act.
- The legal jurisdictional issue was agreed upon by both the appellant's counsel and the CIT-DR to be restored to the file of Ld. PCIT for fresh decision.
- The ITAT referred to a previous order for AY 2009-10 in the assessee's case where a similar jurisdictional issue was raised and decided by the ITAT to be restored for fresh adjudication.
- Considering the previous decision and to maintain judicial consistency, the ITAT applied the same findings and directed the issue to be restored back to the file of Ld. PCIT for fresh consideration.
- Proper and adequate opportunity of being heard was emphasized for the re-adjudication of the jurisdictional issue by Ld. PCIT.
- All other grounds raised by the assessee were disposed of accordingly after restoring the matter to the file of Ld. PCIT.

Issue 2: Jurisdiction of Ld. PCIT in passing the order under section 263 for AY 2012-13
- The appeals for AY 2012-13 were also considered in light of the decision made for AY 2011-12.
- Following the decision in the previous appeal, the same findings were applied to the present appeal to maintain judicial consistency.
- Consequently, both appeals filed by the assessee for AY 2011-12 and AY 2012-13 were allowed for statistical purposes with no order as to costs.

In conclusion, the ITAT Mumbai directed the jurisdictional issue regarding the order passed by Ld. PCIT under section 263 for AY 2011-12 and AY 2012-13 to be restored back to the file of Ld. PCIT for fresh adjudication, following a similar decision made in a previous case for AY 2009-10. The appeals were allowed for statistical purposes with no costs.

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