DCIT Vs Maharashtra State Electricity Distribution Company Ltd. (ITAT Mumbai)
Once 263 Order Is Quashed, Assessment Falls: Revenue’s Appeal Declared Infructuous by Mumbai ITAT
Tribunal dealt with Revenue’s challenge to the order passed by CIT(A) granting relief in an assessment framed u/s 143(3) r.w.s 263. During hearing, Assessee pointed out that the very revision order u/s 263 dated 30.03.2021—on the basis of which the reassessment was made—had already been quashed by Tribunal in ITA No.2277/Mum/2021 vide order dated 07.01.2025. Certified copy was placed on record & the Departmental Representative accepted the factual position.
Tribunal noted that once the 263 order itself stands annulled, the consequential assessment framed pursuant to such invalid revision cannot independently survive. If the parent order is extinguished, all derivative proceedings automatically collapse. CIT(A) had also reached the same conclusion, holding that the assessment passed in consequence of a quashed 263 order carries no legal substratum.
Tribunal observed that adjudicating Revenue’s grounds would be purely academic since the basis of the assessment no longer exists. Accordingly, the appeal by Revenue was held to be infructuous & dismissed without going into merits.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal has been preferred by the Revenue challenging the order dated 05/06/2025 passed by the learned Commissioner of Income Tax (Appeals) for the Assessment Year 2015–16, which in turn arises from the assessment framed under section 143(3) read with section 263 of the Income-tax Act, 1961. The impugned assessment order has been framed pursuant to the directions issued by the learned Principal Commissioner of Income Tax under section 263. The Revenue, being aggrieved by the relief granted by the ld. CIT(A), has assailed the said order before us.
