TMI Blog2023 (2) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... of clause (c) of Explanation (1) to section 263 of the Act, the doctrine of merger will apply and the ld. PCIT cannot take any cognizance of the matter while passing revision order under section 263 of the Act. Under the above facts and circumstances of the case, the revision order passed under section 263 of the Act is quashed. Appeal filed by the assessee is allowed. - I.T.A. No. 264/Chny/2022 - - - Dated:- 15-2-2023 - Shri V. Durga Rao, Judicial Member And Shri G. Manjunatha, Accountant Member For the Appellant : Shri T. Vasudevan, Advocate For the Respondent : Shri S. Senthil Kumaran, CIT ORDER PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Principal Commissioner of Income Tax/CIT 1, Madurai, dated 05.05.2020 passed under section 263 of the Income Tax Act, 1961 [ Act in short] relevant to the assessment year 2015-16. 2. The appeal filed by the assessee is delayed by 662 days in filing the appeal due to outbreak of Covid-19 pandemic and accordingly, the delay in filing the appeal is condoned and admitted for adjudication. 3. Brief facts of the case are that the assessee is an indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the assessment order passed under section 144 r.w.s. 143(3) of the Act dated 29.12.2017 and directed the Assessing Officer to redo the assessment after making necessary enquiries and verification. 6. On being aggrieved against the revision order passed under section 263 of the Act, the assessee preferred an appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the assessment was completed by making addition towards cash deposits and against the assessment order, the assessee preferred further appeal before the ld. CIT(A) and the appeal of the assessee in ITA No. 148/2017-18 is pending before the ld. CIT(A) for adjudication. For the same technical ground of cash deposits , the ld. PCIT cannot exercise revisional power to set aside the assessment order when the appeal of the assessee is pending before the ld. CIT(A) and prayed for quashing the revision order passed under section 263 of the Act dated 05.05.2020. The ld. Counsel for the assessee has relied on the decision of the ITAT in the case of Kathiravan Ananthalakshmi Kathiravan Srinivasan v. ACIT in ITA Nos. 340 341/ Chny/2022 dated 03.08.2022 and also in the case of Arpan Securities Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revision order under section 263 of the Act, which appears to be incorrect for the reason that the addition made by the Assessing Officer was subject matter of appeal before the ld. CIT(A), which is to be covered by the concept of doctrine of merger in view of the provisions of clause (c) of Explanation (1) to section 263 of the Act. 8.2 Similar issue on an identical fact was subject matter in appeal before the Tribunal in the case of Kathiravan Ananthalakshmi Kathiravan Srinivasan v. ACIT and the Tribunal has observed and held as under: 7. We have heard rival contentions and gone through the facts and circumstances of the case. Admitted facts are that the assessee s income declared from agricultural activities at Rs. 81.85 Lakhs is assessed by Assessing Officer as unexplained income. Admittedly this addition of agricultural income as unexplained income is a matter is being contested before CIT(A) in Appeal No. 10976/2019-20 filed on 31.01.2020. We noted that this issue has been dealt by Hon ble Madras High Court in the case of Smt. Renuka Philip (Supra) wherein Hon ble Madras High Court had dealt with exactly identical situation where the addition was subject matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order is to be held as erroneous, it cannot be stated to be prejudicial to the interest of Revenue as every erroneous order cannot be subject matter of Revision under Section 263 of the Act. Furthermore, if the order passed by the Commissioner under Section 263 of the Act as confirmed by the Tribunal is allowed to stand, then the very purpose of the remand order against the original reassessment proceedings would become a fait accompli. 25. Thus, for the above reasons we are fully satisfied that the assumption of jurisdiction by the Commissioner under Section 263 of the Act was wholly without jurisdiction as the twin tests have not been satisfied and consequently, the order dated 14.03.2012 as confirmed by the Tribunal by order dated 13.07.2012 calls for interference. 8. Even this issue has been decided by Hon ble Allahabad High Court in the case of Vem Resorts Hotels (P) Ltd (supra) and particularly in Para 25 Hon ble Allahabad High Court observed as under: 25. As, Clause (c) of Explanation 1 to Section 263 of the Act provides that when an appeal is pending before the Commissioner, the exercise of jurisdiction under Section 263 of the Act by CIT is ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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