Revenue appeal dismissed; s.143(3)/s.153A assessment after s.153D approval bars s.263 reopening by Principal Commissioner action

HC dismissed revenue's appeal and upheld ITAT, Indore. The Court held that where an assessment under s.143(3) read with s.153A was completed after prior approval under s.153D/153A, the jurisdiction to reopen the assessment under s.263 could not be invoked by the Principal Commissioner. The HC followed the coordinate bench view, found no error in ITAT's decision, and declined interference particularly as the total tax effect was below Rs.1,00,00,000. Decision adverse to revenue.

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Issues Involved:
The appeal filed by the Principal Commissioner of Income Tax (PCIT) under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal (ITAT) regarding the assessment of the respondent/assessee.

Condonation of Delay:
The appeal faced a delay of 107 days, which was condoned after considering the reasons provided in the application under Section 5 of the Limitation Act supported by an affidavit.

Background and Assessment Details:
The respondent, a real estate company, filed a return of income for the Assessment Year 2012-13 under Section 139(1) of the Act. Subsequently, a search and seizure operation was conducted, leading to notices under Section 153A for various assessment years. The assessment for 2012-13 was completed by the Assessing Officer, accepting a 'NIL' income.

Proceedings Under Section 263:
The PCIT initiated proceedings under Section 263 against the assessee for not disallowing cash payments made, leading to the order being set aside and remanded for fresh examination. The ITAT, based on a precedent, held that the PCIT's order was unsustainable due to lack of jurisdiction under Section 263.

Proposed Questions of Law:
The Income Tax Authority proposed substantial questions of law related to the justification of ITAT's decision in allowing the appeal, quashing the order under Section 263, and the applicability of revisionary proceedings without JCIT's directions.

Arguments and Decision:
The appellant argued that the cash payment for land purchase violated tax rules, causing prejudice to revenue. However, the counsel failed to provide information on challenges to the precedent cited. The judgment highlighted the requirement of prior approval for orders under Sections 143(3) and 153A and reiterated that once approved, the same authority cannot invoke Section 263.

Conclusion:
The Court dismissed the Income Tax Appeal, emphasizing that the tax effect was below the specified threshold and found no grounds to interfere with the ITAT's decision.

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