Case Law Details
ACIT Vs Linde Engineering Pvt. Ltd. (ITAT Ahmedabad)
Assessment Collapses Once Section 263 Revision Is Quashed — ITAT Dismisses Revenue Appeal
The Ahmedabad Bench of the Income Tax Appellate Tribunal held that once a revisionary order passed under section 263 is quashed, the consequential assessment framed under section 143(3) read with section 263 becomes void ab initio and non est in law.
In this case, the assessment for AY 2011-12 had been completed pursuant to a section 263 order. However, the Tribunal had already set aside that very section 263 order in earlier proceedings involving the same assessee. Relying on this undisputed fact, the ITAT observed that the assessment had no legal foundation to survive. Consequently, the appellate order of the CIT(A) and all issues arising therefrom, including the Revenue’s challenge to deletion of section 10A disallowance, ceased to exist for adjudication.
Accordingly, the Revenue’s appeal was dismissed, and the assessee’s cross-objection was also dismissed as infructuous, without entering into the merits of section 10A or transfer pricing provisions.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal by the Revenue and the Cross Objection by the assessee arise out of the order dated 20.08.2025 passed by the Ld. Commissioner of Income Tax (Appeals), Ahmedabad-13, [hereinafter referred to as “Ld. CIT(A)”] under section 250 of the Income tax Act, 1961 [“the Act”] for the Assessment Year (AY) 2011-12.
2. The Revenue has raised following grounds of appeal :-
“On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance u/s 10A amounting to Rs.31,74,80,850/- without appreciating the facts that as per the provisions of section 92C(4) of the Act, no deduction u/s 10A is allowable in respect of amount of income by which the total income of the assessee is enhanced as a result of computation of arm’s length price.”
3. The assessee has raised following grounds in its Cross-Objection:-
“1. On the facts and circumstances of the case and in law, Ld. AO erred in making an assessment, under section 143(3) r.w.s. 263 of the Act, without appreciating that proceedings under section 263 of the Act were invalid and hence quashed by the Hon’ble Income Tax Appellate Tribunal (‘ITAT) vide order dated 30 March 2022.
Consequently, the Respondent prays that the entire assessment proceedings under section 143(3) r.ws. 263 of the Act were void-ab-initio, illegal, bad in law and therefore liable to be quashed.
2. Without prejudice to the above, on the facts and circumstances of the case and in law, the Ld. AO erred in disallowing the claim of deduction under section 10A of the Act amounting to INR 31,74,80,850.
Accordingly, the Respondent prays that disallowance of the claim of deduction under section 10A of the Act be deleted.”
3. At the very outset, Ld. Senior Advocate appearing on behalf of the assessee, invited our attention to the order dated 30.03.2022 passed by this Tribunal in ITA No. 3846/Del/2018 for AY 2011-12, in the case of the assessee itself, whereby the revisionary order passed by the Ld. Pr. CIT u/s 263 of the Act has been set aside. The Ld. Senior Advocate submitted that once the order u/s 263 of the Act has been set aside by the Tribunal, the consequential assessment order passed u/s 143(3) r.w.s. 263 of the Act does not survive in the eyes of law. Consequently, any appellate proceedings arising out of such assessment order, including the order passed by the Ld. CIT(A), are rendered void ab initio and non est.
4. We have heard the rival submissions and perused the material available record. It is an undisputed fact that the assessment order giving rise to the present appeal and Cross Objection was framed u/s 143(3) r.w.s. 263 of the Act. Since the very foundation of the assessment, namely the order passed u/s 263 of the Act, has already been quashed by the Tribunal, the consequential assessment order has no legs to stand on and is void ab initio. Consequently, the appellate order passed by the Ld. CIT(A) and the issues raised therein do not survive for adjudication on merits.
5. In the result, the appeal filed by the Revenue is dismissed, and the Cross Objection filed by the assessee is also dismissed as infructuous.
The order is pronounced in the open Court on 13.01.2026.
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