Commissioner of Income Tax-6 vs Century Textiles and Industries Ltd.

This appeal of the revenue challenges the order passed by the Income Tax Appellate Tribunal, Bench at Mumbai dated 21st November, 2012.

The appeal, according to Mr. Pinto, raises the substantial question of law that is formulated in the following words :

"(1) Whether on the facts and in the circumstances of the case and in law, the Hon''ble Tribunal was justified in annulling the assessment order issued u/s 143(3) read with Sec.263 of the Income Tax Act, 1961, while observing that the entire proceedings had become void, since the order passed u/s.263 was quashed by a Coordinate Bench, unmindful of the fact that an appeal u/s 260A has been filed against the latter order of the Tribunal that is pending adjudication ?"

Mr. Pinto would submit that the tribunal ought not to have hastily decided the appeal. The appeal of the assessee has been allowed only on one ground, limitation. That the order of assessment passed by the assessing officer dated 8th October, 2009 is pursuant to the direction issued under section 263 of the Income Tax Act, 1961 by the Commissioner. In other words, the assessing officer acted in compliance with the directions of the Commissioner, who had revised the original assessment order by resorting to above legal provision. The Tribunal, therefore, was obliged to hold that such assessment order was properly made and additions therein are justifiable on merits. The Tribunal merely proceeded to hold that once it has quashed the revisional order under section 263 of the Income Tax Act, then, all consequential proceedings and in furtherance thereof do not survive in law. This view was legally unsound and particularly when the Tribunal''s order quashing the proceedings under section 263 has been challenged by the revenue in this Court in an appeal under section 260A of the Income Tax Act, 1961.

After having perused the appeal paperbook and all annexures thereto, we are unable to agree with Mr. Pinto. There is concurrent finding on the point that power under section 263 of the Income Tax Act was unavailable. That power was erroneously and wrongfully exercised. The order in that behalf was passed in Income Tax Appeal No. 3449/Mum/2009 by the Tribunal. That order of the Tribunal dated 6th April, 2012 was challenged by the revenue in Income Tax Appeal No. 229 of 2012. The Division Bench of this Court comprising one of us (Shri S.C. Dharmadhikari, J.) dated 11th June, 2014 dismissed the revenue''s appeal by concluding that it raises no substantial question of law. The Tribunal rightly quashed the order under section 263 of the Income Tax Act, 1961. Once this was the foundation on which the assessing officer proceeded and made fresh assessment, then, in the light of the conclusion reached by the Tribunal on 6th April, 2012 and reinforced by this Court, the assessing officer could not have passed the assessment order dated 8th October, 2009.

In the above circumstances, this appeal does not raise any substantial question of law. The findings of the Tribunal cannot be termed as perverse or vitiated by an error of law apparent on the face of the record. The appeal is, therefore, dismissed. No costs.