IN INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA no.3626/Mum./2018 (Assessment Year : 2005 06) ITA no.3627/Mum./2018 (Assessment Year : 2006 07) Asstt. Commissioner of Income Tax . Appellant Circle 14(3)(2), Mumbai v/s ShivShai Punarvasan Prakalp Ltd. Griha Nirman Bhavan . Respondent Bandra (E), Mumbai 400 051 PAN AACCS1590C Revenue by : Shri Chaudhary Arunkumar Singh Assessee by : Shri Kirit S. Singhvi Date of Hearing 08.08.2019 Date of Order 23.08.2019 ORDER PER SAKTIJIT DEY. J.M. Captioned appeals by Revenue arise out of two separate orders, both dated 16th February 2018, passed by learned Commissioner (Appeals) 22, Mumbai, for assessment years 2005 06 and 2006 07. 2. Brief facts are, for assessment year 2005 06, originally, assessment was completed under section 143(3) of Income Tax 2 ShivShai Punarvasan Prakalp Ltd. Act, 1961 (for short "the Act") vide order dated 14th December 2007, determining total income at ` 5,04,99,620. Subsequently, order under section 154 of Act was passed on 15 th September 2008, revising income determined to ` nil, after setting off brought forward business loss of assessment year 2002 03. Again, assessment was re opened under section 147 of Act and assessment order under section 143(3) r/w section 147 of Act, was passed on 16th November 2009, determining total income at nil. However, in said assessment order, Assessing Officer treated income of ` 46,39,627, shown under head business income as income from other sources. After completion of assessment as aforesaid, learned Commissioner of Income Tax called for assessment record and after examining he was of view that assessment order is erroneous and prejudicial to interests of Revenue as assessee s claim of loss under one time settlement amounting to ` 15,51,47,832, penal interest of ` 5,88,665, and interest on Dindoshi site of ` 3,06,29,000, were allowed as expenditure instead of capitalizing them. Accordingly, he set aside assessment order with direction to Assessing Officer to examine assessee s claim afresh. Similarly, for assessment year 2006 07, assessment was originally completed under section 143(3) of Act vide order dated 16th December 2008. However, in exercise of power under section 263 of Act, learned Commissioner of Income 3 ShivShai Punarvasan Prakalp Ltd. Tax revised said assessment order on identical reasoning on basis of which he revised assessment order for assessment year 2005 06. Being aggrieved with orders passed under section 263 of Act, assessee preferred appeals before Tribunal. During pendency of assessee s appeals before Tribunal, Assessing Officer passed fresh assessment orders implementing directions of learned Commissioner of Income Tax in orders passed under section 263 of Act. Against such consequential orders passed by Assessing Officer, assessee preferred appeals before learned Commissioner (Appeals). During pendency of assessee s appeals before learned Commissioner (Appeals), appeals filed by assessee challenging orders passed under section 263 of Act were heard and disposed off by Tribunal vide order dated 16th January 2017, in ITA no.3317/Mum./2011 and ITA no.3314/ Mum./2011, quashing orders passed under section 263 of Act. Meaning thereby, assessment orders subjected to revision under section 263 of Act were restored. When aforesaid actual position was brought to notice of learned CIT(A) in course of hearing of appeal proceedings arising out of assessment orders passed in pursuance to direction given under section 263 of Act, learned CIT(A) cancelled assessment orders passed in pursuance to orders passed u/s 263 of Act. Being aggrieved, Revenue is in appeal before us. 4 ShivShai Punarvasan Prakalp Ltd. 3. We have considered rival submissions and perused material on record. Undisputedly, impugned assessment orders giving rise to present proceedings were passed in pursuance to directions of learned Commissioner of Income Tax under section 263 of Act. Admittedly, orders passed under section 263 of Act for aforesaid assessment years were quashed by Tribunal while deciding assessee s appeals in ITA no.3317/Mum./2011 &ITA no.3314/ Mum./2011, dated 16th January 2017. Therefore, when orders passed under section 263 of Act have been quashed and have lost their validity, proceedings initiated by Assessing Officer in pursuance to directions of learned Commissioner under section 263 of Act culminating in impugned assessment orders would have no locus standi. Therefore, learned Commissioner (Appeals) was justified in cancelling impugned assessment orders. In view of aforesaid, we have no hesitation in upholding orders of learned Commissioner (Appeals) by dismissing grounds raised. 4. In result, appeals are dismissed. Order pronounced in open Court on 23.08.2019 Sd/- Sd/- N.K. PRADHAN SAKTIJIT DEY ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 23.08.2019 5 ShivShai Punarvasan Prakalp Ltd. Copy of order forwarded to: (1) Assessee; (2) Revenue; (3) CIT(A); (4) CIT, Mumbai City concerned; (5) DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai Asstt. Commissioner of Income-tax Circle14(3)(2), Mumbai v. ShivShai Punarvasan Prakalp Ltd