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2024 (1) TMI 550 - AT - Income TaxDoctrine of merger - Validity of Revision u/s 263 when existing pending appeal against order passed u/s 153C r.w.s. 144 - as per CIT assessment order, though considered the issue of disallowance u/s 40(a)(ia), did not consider the issue of disallowance of donation and CSR expenses which make the order erroneous and prejudicial to the interest of the revenue - HELD THAT:- As in the pending appeal against order passed u/s 153C r.w.s. 144, the assessee has questioned the legality of reassessment proceedings u/s 147, inter-alia, on the ground that no fresh material came into the possession of Ld. AO so as to form an opinion of escapement of income. Since the proceedings u/s 147 was bad in law, the scope of assessment u/s 153C would not include the scope of reassessment u/s 147. The assessee also assailed the proceedings on the ground that sanction issued u/s 151 was given in a mechanical and casual manner. The assessee has also challenged the legality of proceedings u/s 153C. Since the larger issues including legal issues are already pending before first appellate authority, the order passed by Ld. AO, in our considered opinion, could not be subjected to revision u/s 263. The assessee’s case, in such a situation, would be covered under Clause (c) of Explanation-1 to Sec. 263 which puts a bar on initiation of revision u/s 263 when an appeal is pending before Ld. CIT(A). Even otherwise also, the powers of Ld. CIT(A) are co-terminus with those of the AO and he can do what AO could do and can also direct the later to do what the later has failed to do so. As decided in the case of Smt. Renuka Philip vs. ITO [2018 (12) TMI 129 - MADRAS HIGH COURT] when larger issue was pending before CIT(A), the revisionary authority could not exercise jurisdiction u/s 263. thus we would hold that the impugned revision u/s 263 was bad-in-law and the same is therefore, liable to the quashed. Also see VAM Resorts and Hotels Pvt. Ltd. [2019 (8) TMI 1418 - ALLAHABAD HIGH COURT] Assessee appeal allowed.
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