2021 (9) TMI 514

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....in directing the AO to pass a fresh assessment order in accordance with law and facts of the case. 2. The Ld. PCIT has grossly erred on facts and in law in passing order u/s 263 of the Income Tax Act, 1961 ignoring the fact that the assessment sought to be reviewed in the case of the of the appellant was already quashed by the Hon'ble Income Tax Appellate Tribunal, Ahmedabad. 3. The Ld. PCIT has grossly erred on facts and in law in failing to appreciate that the invocation of jurisdiction by the AO under section 153A of the Act was bad in law and in gross disregard of the settled law that the additions in the assessment u/s 153A are required to be made only on the basis of incriminating documents found and seized during the course of the search. 4. The Ld. PCIT has erred on facts and in law in passing order u/s 263 of the Income Tax Act, 1961 in the case of the appellant without appreciating and dealing with various case laws submitted in support of appellant's contentions with regard to the scope of assessment u/s 153A & non maintainability of action u/s 263 of the Income Tax Act, 1961. 5. The Ld. PCIT has erred on facts and in law in passing order u/s 263 of the I....

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....ter, modify any of the grounds of appeal." 2. The learned Counsel for the assessee, at the very outset, submitted in brief that the assessee has been challenging the action taken under Section 263 of the Act by the learned Commissioner in these three assessment years. At the outset, he submitted that a search and seizure operation was carried out at the premises of the assessee on 10.03.2015. The assessment orders have been passed under Section 153A of the Income Tax Act on 29.12.2017. The validity of these assessment orders were challenged before the learned CIT(A) and ultimately the issue travelled up to the Hon'ble Tribunal and the Tribunal vide its order dated 12.11.2020 has quashed the assessment orders on the ground that these are not passed within the time period provided in the Act. Since the assessment orders have already been quashed in all these three assessment years, there cannot be any subsequent proceedings against the assessee even under Section 263 of the Act. He further submitted that this aspect was brought to the notice of the learned Commissioner who took cognizance of this fact; but, instead of dropping the proceedings, passed the impugned orders by keeping i....

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....t of Rs. 51,43,31,107/- after debit of Rs. 14,36,96,811/- of current income tax and Rs. 85,593/- of deferred tax. Further, it was also seen from computation of income that while calculating regular income the assessee had added Rs. 52,75,510/- on account of interest on Income Tax. However, in computing its book profit u/s 115JB of the Act, assessee added only debited amount of deferred tax of Rs. 85,593/- and current income tax of Rs. 14,36,96,811/-. The amount debited interest on Income Tax of Rs. 52,75,510/- was not added back while determining book profit u/s 115JB of the Act. The same was accepted by the Assessing Officer. However, in view of clause (a) of Explanation I, the amount of debited interest on income tax of Rs. 52,75,510/- required to be added for determining book profit u/s 115JB of the Act 5. In view of the above, the assessment order u/s.143(3) r.w.s 153A of the Act dated 29/12/2017 passed by the Assessing Officer is prima facie both erroneous as also prejudicial to the interest of the revenue and therefore, I intend to revise the said order u/s.263 of the I.T. Act." 5. During the course of hearing before the learned Commissioner, the assessee brought to his no....

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.... the search. This argument of the assessee is not found true and is rejected. 6.2 Regarding the argument about the doctrine of merger, it is to be pointed out that it is well settled law that the principle of res judicata has no application to Income-tax matter and an assessment for a particular year is final and conclusive in relation to that year and the decisions given in assessment in earlier year are not binding either on the assessee or the Department in a subsequent year." 6. With the assistance of the learned Representatives, we have gone through the record carefully. A perusal of Section 263 of the Act would reveal that it contemplates that the Principal Commissioner or learned Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after conducting an inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessm....