Changappa Pemmaiah Biddamada Vs ITO (ITAT Bangalore)
No Second Bite at the Cherry- ‘Set Aside’ u/s 264 means Assessment Quashed – AO cannot Redo without Fresh Directions
Assessee faced an addition of ₹20.78 lakh towards cash deposits in his bank account. The original assessment was completed ex parte u/s 144 on 27.12.2019. Aggrieved, assessee filed a revision petition u/s 264. PCIT, by order dated 28.03.2021, set aside the assessment order with the observation that the assessee must regularly check the income-tax portal for departmental communications.
Following this, however, AO once again initiated proceedings & re-confirmed the same addition through a fresh order dated 30.03.2022. Assessee challenged this before CIT(A), but the appeal was dismissed on 22.01.2025.
On further appeal, ITAT carefully examined whether the PCIT’s order “setting aside” the original assessment conferred jurisdiction upon AO to redo the assessment. Tribunal observed that the PCIT had not issued any direction for fresh assessment, but had only annulled the earlier order. Relying on judicial precedents including DCIT vs. Jaya Publication (123 ITD 53, Chennai), Seghu Buchhaiah Shetty (SC, 52 ITR 532) & Fu Sheen Tannery (Cal HC, 134 Taxman 25), ITAT held that “set aside” in such a context amounts to quashing of the assessment, leaving no scope for a fresh assessment unless expressly directed.
