Case Law Details
Daya Rani Vs PCIT (ITAT Delhi)
ITAT Delhi held that once the reassessment order passed by AO is not sustainable in the eyes of law, any revision order passed u/s. 263 of the Income Tax Act seeking to revise such reassessment order cannot be accepted in the eyes of law. Accordingly, revision order passed u/s. 263 quashed.
Facts- The assessment of the assessee for the Asst Year 2011-12 was completed u/s 143(3) r.w.s 147 of the Act on 16/11/2019. Thereafter, notice was issued u/s. 148. Post considering the reply, AO in the reassessment proceedings made no additions.
Thereafter, the reassessment was sought to be revised by the Ld. PCIT by invoking his revision jurisdiction u/s 263 of the Act on the issue of capital gains, investment of Rs.5,50,000/- in time deposits with the Axis Bank and deduction u/s 54 of the Act on the ground that the Ld. AO had not made enquiries on the same thereby making his order erroneous and prejudicial to the interest of the Revenue.
Conclusion- Held that AO having recorded the reasons for reopening the assessment and having formed a belief that income of the assessee had escaped assessment, had not made any addition in the reassessment proceedings in respect of issues that are subject matter of reopening. Hence, the very basis of formation of belief for the Ld. AO vanishes. Hence, the Ld. AO could not have framed any reassessment per se. Logically the Ld. AO should have simply dropped the initiation of reassessment proceedings instead of passing a separate reassessment order. Once, the reassessment order per se framed by the Ld. AO is not sustainable in the eyes of law, any revision order passed thereon u/s 263 seeking to revise such unsustainable order cannot be accepted in the eyes of law and consequential revision order also passed u/s 263 of the Act deserves to be quashed.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
