Passing of order giving effect to appellate order if time barred, original assessment order stands

Passing of order giving effect to appellate order if time barred, original assessment order would stand and assessee would be in much worst position if relief was provided in appeal.

ABCAUS Case Law Citation
ABCAUS 3571 (2022) (01) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) confirming the order passed by the Assessing Officer (AO) u/s 143(3) r.w.s. 250 of the Income Tax Act, 1961 (the Act).

In the instant case, the original return of income filed by the assessee was processed u/s 143(1). However, pursuant to survey u/s 133A, the case was reopened and an assessment was framed u/s 143(3) r.w.s. 147 of the Act.

In the said re-assessment, an addition was made for unexplained investment u/s 69 of the Act and another addition was also made being difference in sales.

The CIT(A) partly allowed the appeal and restricted the addition u/s 69. Regarding addition of unreconciled sales, the AO was directed to verify the claim of the assessee and restrict the addition only to the un-reconciled amount.

Consequent to the said appellate order, the assessment was revised by the AO deleting the addition on account of unreconciled sales and reduced the addition u/s 69 as per appellate order.

However, the assessee again challenged the revised order before CIT(A) and contended that the revised order passed by AO was time barred and hence not valid.

However, the CIT(A) held that the passing of giving effect order was merely a formality and any delay in passing such order could not be treated as fatal.

The Tribunal noted that the assessment framed u/s 143(3) r.w.s. 147 of the Act was very much valid in the eyes of law. This order was modified by the CIT(A). No further appeal was preferred by the assessee against this order and this order attained finality. In other words, the order of the AO had merged with CIT(A) order.

With respect to the argument of the assessee that the order giving effect was bad-in-law, the Tribunal opined that If this position was to be accepted, then it would  effectively mean that the appellate order could not be given effect to and the assessment framed u/s 143(3)  r.w.s. 147 would attain finality since that assessment  was  very much validly framed. 

The Tribunal said that if the argument of the assessee was accepted, the assessee would be in much worst position since partial relief had been provided by CIT(A) to the assessee in appellate order.

Accordingly, the Tribunal dismissed the ground raised.

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