The Hyderabad ITAT has ruled that an appeal against the order of the Assessing Officer u/s 143(3) filed before CIT(A) did not become infructuous simply as due to revision order passed by the Commissioner of Income tax under section 263 setting aside assessment of the AO and CIT(A) ought to have disposed the appeal on merit.

The details of the order are as under:

Income Tax Appellate Tribunal, Hyderabad benches “A”
ITA.No.1570/Hyd/2013
Assessment Year 2008-2009
Sri Surakshitha Homes (Appellant) vs Income Tax Officer (Respondent)
Date of Order: 31-08-2015

ORDER

PER P.M. JAGTAP, A.M.

This appeal filed by the assessee is directed against the order of Ld. CIT(A)-VI, Hyderabad dated 23.08.2013 whereby he dismissed the appeal filed by the assessee before him against the order passed by the AO under section 143(3) dated 31.12.2010 by holding that the said order having been set aside by the Ld. CIT vide order dated 28.03.2013 passed under section 263 with a direction to the AO to re-do the assessment afresh, the appeal filed by the assessee has become infructuous.

2. We have heard the arguments of both the sides and also perused the relevant material on record. In our opinion, when the order passed by the AO under section 143(3) is set aside by the Ld. CIT by exercising the power under section 263 with a direction to the AO to re-do the assessment afresh, the scope of such set aside proceedings is limited to the issues directed to be considered by the Ld. CIT in his order under section 263. The AO thus is required to consider in the fresh proceedings under section 143(3) read with section 263 only such issues over and above the issues already considered in the original assessment which continues to subsist to the extent of income as determined by the AO in the original assessment. Since the appeal filed by the assessee before the Ld. CIT(A) against the order originally passed by the AO under section 143(3) was in respect of its grievance as arising from the income determined in the said assessment, the same, in our opinion, had not become infructuous as a result of order passed by the Ld. CIT  under section 263 and the Ld. CIT(A) ought to have disposed of the same on merit. In any case, the order passed by the Ld. CIT under section 263 on 28.03.2013 has since been set aside by the Tribunal vide its order dated 28.08.2015 in ITA.No.784/Hyd/2013 thereby restoring the order passed by the AO under section 143(3) on 31.12.2010 and consequently, the appeal filed by the assessee before the Ld. CIT(A) against the said order of the AO is required to be disposed of by the Ld. CIT(A) on merit. We therefore, set aside the impugned order of the Ld. CIT(A) and remit the matter back to him with a direction to dispose of the appeal of the assessee filed against the order of the AO dated 31.12.2010 passed under section 143(3) on merit after giving the assessee a proper and sufficient opportunity of being heard.

3. In the result, appeal of the assessee is treated as allowed.

Order pronounced in the open Court on 31.08.2015

Sd/-                                                     Sd/-
(SAKTIJIT DEY)                     (P.M.JAGTAP)
JUDICIAL MEMBER        ACCOUNTANT MEMBER
Hyderabad, Dated 31st August, 2015