2020 (9) TMI 230 - AT - Income Tax

ITAT Mumbai: CIT's Order Set Aside, Assessing Officer's View Key

Dy. CIT-9 (3) (2), Mumbai Versus M/s Future Ideas Company Ltd.

Dy. CIT-9 (3) (2), Mumbai Versus M/s Future Ideas Company Ltd. - TMI Issues involved:1. Appeal against order passed by Commissioner of Income Tax (Appeals)-16, Mumbai under section 143(3) r.w.s. 263 of the Income Tax Act, 1961.2. Assessment of total income for AY 2011-12.3. Setting aside/quashing of order under section 263 by ITAT 'F' Bench, Mumbai.4. Jurisdiction of CIT under section 263 of the Act.Analysis:1. The appeal was filed by the Revenue against the order passed by the Commissioner of Income Tax (Appeals)-16, Mumbai, for the assessment year 2011-12 under section 143(3) r.w.s. 263 of the Income Tax Act, 1961. The initial assessment by the Assessing Officer (AO) determined the income at Rs. Nil under normal provisions and Rs. 19,80,289/- under section 115JB of the Act. The CIT(A) granted relief amounting to Rs. 24,79,503/-. Subsequently, the Principal CIT-9, Mumbai directed a fresh assessment order under section 263, resulting in total income of Rs. Nil under normal provisions and Rs. 2,44,98,158/- under section 115JB of the Act.2. The assessee challenged the order under section 263 dated 24.09.2016 by filing an appeal before the CIT(A). The CIT(A) allowed the appeal on the grounds that the ITAT had set aside/quashed the order under section 263 passed by the Principal CIT-9, rendering the subsequent assessment order by the AO non-operative.3. The ITAT 'F' Bench, Mumbai set aside/quashed the order under section 263 passed by the Principal CIT-9 for the assessment year 2011-12. The ITAT emphasized the importance of whether the view adopted by the AO in the assessment order was a possible view, even if the CIT held a different opinion. It was noted that the AO had conducted an inquiry regarding disallowance under section 14A r.w. rule 8D of the Rules, and the ITAT found the AO's view reasonable. The ITAT cited relevant judicial pronouncements to support its decision and concluded that the CIT exceeded jurisdiction under section 263.4. The Tribunal concurred with the decision of the CIT(A) that the consequential assessment order under section 143(3) r.w.s. 263 did not survive due to the setting aside/quashing of the order under section 263 by the ITAT. Consequently, the appeal filed by the Revenue was dismissed, affirming the decision of the lower authorities.This detailed analysis of the judgment addresses all the issues involved comprehensively, highlighting the key legal aspects and decisions made by the authorities involved in the case.