DCIT Vs Rayon Reality Private Ltd (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has dismissed an appeal filed by the Deputy Commissioner of Income Tax (DCIT) against Rayon Reality Private Ltd. The tribunal upheld the decision of the National Faceless Appeal Centre (NFAC), which had deleted a significant addition of Rs. 7,87,38,346 related to depreciation on a Wind Mill for the Assessment Year (A.Y.) 2015-16.
The dispute originated from a revisional order passed by the Principal Commissioner of Income Tax (PCIT), Ahmedabad-3, under Section 263 of the Income Tax Act, 1961, on March 28, 2021. This order had set aside the original assessment, which was completed at ‘NIL’ income, and directed a fresh assessment. Subsequently, the Assessing Officer (AO) completed a de novo assessment on March 29, 2022, under Section 143(3) read with Section 263, making the aforementioned addition.
Rayon Reality Private Ltd. challenged this reassessment before the First Appellate Authority, the NFAC. The NFAC, in its order dated December 10, 2024, allowed the assessee’s appeal. The core reason for the NFAC’s decision was that the PCIT’s revisional order under Section 263 had been quashed by a Co-ordinate Bench of the ITAT itself in a separate proceeding (ITA No.123/Ahd/2021 dated January 25, 2024). Consequently, the NFAC concluded that the consequential assessment order passed by the AO, being dependent on the quashed revisional order, could not legally survive and was rendered “null and void.”
