Shreeji Developers Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad Quashes Section 263 Revision – No Revision Possible on Invalid Reassessment Order Sanctioned by Wrong Authority
Ahmedabad ITAT has held that a revisionary order u/s 263 cannot be sustained when the underlying reassessment order itself is invalid in law due to sanction from the wrong specified authority.
Assessee’s reassessment u/s 147 r.w.s. 144 was initiated after three years from the end of the relevant AY, requiring sanction from the PCCIT/PDGIT/CCIT/DGIT as per Section 151(ii). However, the sanction was accorded by the PCIT. Subsequently, the PCIT invoked Sec 263 to set aside the reassessment for lack of proper inquiry & to disallow interest to partners u/s 184(5).
Assessee pointed out that CIT(A) had already quashed the reassessment as invalid on account of sanction being granted by the wrong authority. Relying on precedents including Union of India v. Rajeev Bansal, Holiday Developers, & Ashok Kumar Makhija, e Tribunal observed that once the base reassessment order is void & non-existent in law, any revision u/s 263 automatically falls.
Accordingly, the ITAT quashed the PCIT’s revision order & allowed the appeal in favour of Assessee.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the assessee as against the Revision order dated 10-03-2025 passed by Principal Commissioner of Income Tax (Central), Surat At Vadodara arising out of the reassessment order passed under section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2018-19.
