When appeal is pending before CIT(A), revision jurisdiction u/s 263 can not be exercised

When appeal is pending before CIT(A), revisionary jurisdiction u/s 263 can not be exercised – ITAT

ABCAUS Case Law Citation
ABCAUS 3612 (2022) (09) ITAT

Important Case Laws relied upon by parties
Smt. Renuka Philip vs. ITO [2018] 409 ITR 567 (Mad)
CIT vs. Vam Resorts and Hotels Pvt. Ltd. [2019] 418 ITR 723 (All)

In the instant case, the assessee had challenged the order passed by the Principal Commissioner of Income ax (PCIT) passed u/s 263 of the Income Tax Act, 1961 (the Act).

The assessee raised a legal ground against the assumption of jurisdiction by the PCIT u/s 263 of the Act to set aside the assessment on the same issue which is also pending before the CIT(A) for adjudication and thus is in violation of provisions of section 263(1) explanation 1(c) of the Act.

In the instant case, the PCIT on account of insufficient addition u/s 69A of the Act treated the assessment order as erroneous and prejudicial to the interest of the revenue and had directed the AO to frame fresh assessment after making the necessary enquiry into the matter. 

The Tribunal observed that the assessment order was framed originally u/s 143(3) of the Act and had been challenged by the assessee before the First Appellate Authority and appeal was pending for adjudication. Therefore, the jurisdiction of PCIT u/s 263 of the Act was not maintainable on this issue.

The Tribunal pointed out that The provisions of clause (c) of Explanation (1) to Section 263 provides that when the appeal is pending before the Commissioner of Income Tax(Appeals) on some  issue,  the  exercise  of  jurisdiction  u/s  263  of  the  Act  on  the said  issue is not available to the PCIT. 

The ttt opined that since in the case in hand, Commissioner of Income Tax (appeals) was seized of the issueand therefore jurisdiction u/s 263 of the Act had been invalidly exercised by the PCIT.

The Tribunal observed that the case of the assessee found support from the several decisions of various High Courts where it has been held that when the appeal is pending before the Commissioner (appeals), the exercise of jurisdiction u/s 263 of the Act is not available  to the PCIT.

Accordingly, the Tribunal quashed the order passed u/s 263 of the Act and allowed the appeal in favour of the assessee.

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