ITAT quashes Revisional Order on ground of Failure to Mention how the Action of AO while framing the Assessment order is Erroneous [Read Order]

The Income Tax Appellate Tribunal (ITAT), Kolkata bench has quashed a revisional order passed under section 263 of the Income Tax Act, 1961 on the ground that the Commissioner failed to mention the reason how the action of AO while framing the assessment order is not accordance with the law.

The Pr. CIT invoked his second revisional jurisdictional under section 263 of the Act against the action of the AO who framed the re-assessment order pursuant to the first revisional order dated 31.03.2016 which impugned action of Ld. Pr. CIT. The assessee claimed that the action of the Pr. CIT is without satisfying the requisite conditional precedent as stipulated under section 263 of the Act and therefore without jurisdiction and resultantly bad in law, so it has to be quashed. The assessee failed to secure relief from the CIT(A), approached the Tribunal for relief.

Judicial Member Aby T Verkey observed that the Ld. CIT(A) has made a bald statement that the AO’s assessment order attracts Explanation 2(c) u/s. 263 of the Act.

“However, he failed to spell out in his impugned order how the action of AO while framing the assessment order is not in accordance to any order, direction or instruction issued by the Board under section 119 of the Act. So, the deeming fiction as envisaged in Explanation (2) u/s. 263 of the Act cannot be used to interfere with the order of AO. This action of Ld. Pr. CIT is bad for non-application of mind. In the light of the aforesaid discussion and case laws cited supra, we find merit in the appeal filed by the assessee, therefore, we allow the appeal of assessee on the ground that since the Ld. Pr CIT has exercised his revisional jurisdiction u/s. 263 without satisfying the condition precedent as stipulated in section 263 of the Act. Therefore, we hold that the impugned action of the Ld. Pr. CIT is without jurisdiction and, therefore, is null in the eyes of law and consequently it is quashed and since we allowed legal ground raised by the assessee, the other additional grounds are left open,” the Tribunal said.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.