Revisional order quashed, consequential assessment unsustainable; revenue appeal against the derivative order was held not maintainable.

Where an assessment order is made solely in consequence of a revisional order under section 263 of the Income-tax Act, 1961, quashing that revisional order removes the legal foundation of the assessment. The consequential assessment order then ceases to survive, and any appeal directed against it becomes redundant and not maintainable. The document states that, once the section 263 order was set aside in the assessee's earlier appeal, the revenue's challenge to the assessment order could not continue because the basis for that order had disappeared.

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Issues: Whether the revenue's appeal against the assessment order was maintainable after the order under section 263 of the Income-tax Act, 1961 had been quashed, and whether the appeal had become redundant.

Analysis: The assessment order was passed in pursuance of the revisional order under section 263. Once that revisional order was quashed in the assessee's earlier appeal, the foundation for the assessment order ceased to exist. The Tribunal noted that the assessment order no longer survived and no further appeal could lie on that basis.

Conclusion: The appeal was held to be not maintainable and was dismissed.

Ratio Decidendi: Where the very basis of an assessment order is a revisional order under section 263 of the Income-tax Act, 1961, and that revisional order is set aside, the consequential assessment order and any appeal arising from it become unsustainable and not maintainable.

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