ITAT Rules Federal Bank's Appeal Not Maintainable Following High Court's Order to Reassess [Read Order]

The Income Tax Appellate Tribunal (ITAT) Cochin Bench has dismissed the appeal filed by Federal Bank, a well-known private sector bank in India, after the Kerala High Court set aside the assessment order and directed a fresh assessment. The tribunal ruled that since the original assessment order no longer existed, the revision order passed by the Principal Commissioner of Income Tax (PCIT) also became legally non-existent, making the appeal not maintainable.

The case involved The Federal Bank Ltd., headquartered at Federal Towers, Bank Junction, Aluva, which had challenged the order passed by the Principal Commissioner of Income Tax (PCIT) – I, Kochi, dated February 22, 2024, for the Assessment Year (AY) 2018-19. The PCIT had exercised revisionary powers under Section 263 of the Income Tax Act, 1961, setting aside the original assessment order issued by the Assessing Officer (AO).

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However, before the ITAT could hear the appeal, the Kerala High Court, in W.P. 10803 of 2021, issued an order on November 22, 2024, directing a reassessment. The High Court ruled that the AO must pass a fresh order after providing the assessee with an opportunity to present its case. As a result, the original assessment order ceased to exist, rendering the PCIT’s revision order irrelevant.

During the hearing on January 27, 2025, Gopi K., Chartered Accountant, represented The Federal Bank Ltd., while Sanjit Kumar Das, CIT-DR, appeared for the Income Tax Department. The assessee argued that since the High Court had nullified the assessment order, the PCIT’s revision order had also lost its validity. The ITAT accepted this argument and held that once the original assessment order is set aside, any revisionary proceedings based on it automatically become void.

The ITAT Cochin Bench consisted of Inturi Rama Rao (Accountant Member) and Keshav Dubey (Judicial Member). The bench observed that since the High Court had already ordered reassessment, there was no need for the ITAT to decide on the appeal. The tribunal concluded that the appeal was not maintainable and dismissed the case.

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In Conclusion, The ITAT Cochin Bench dismissed the appeal filed by The Federal Bank Ltd., ruling that the original assessment order no longer existed following the High Court’s directive for reassessment.

To Read the full text of the Order CLICK HERE

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