C/TAXAP/747/2019 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 747 of 2019 PR. COMMISSIONER OF INCOME TAX Versus M/S RISHI KIRAN LOGISTIC P. LTD. Appearance: MRS MAUNA M BHATT(174) for Appellant(s) No. 1 for Opponent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 06/01/2020 ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. This tax appeal under Section 260A of Income Tax Act, 1961 [for short Act, 1961 ] is at instance of revenue and is directed against order passed by Income Tax Appellate Tribunal, Rajkot in ITA 156/RJT/2017, dated 28/05/2019 for A.Y. 2009 10. 2. revenue has proposed following questions of law: Whether Appellate Tribunal has erred in law and on facts in quashing order u/s.263 of Act passed by Principal Commissioner of Income Tax who has validly assumed jurisdiction within two years from end of financial year in which impugned order under reference was passed? 3. We go straight to Paragraph 6 of impugned order passed by Income Tax Appellate Tribunal. Paragraph 6 reads thus: Page 1 of 3 Downloaded on : Tue Jan 07 10:27:28 IST 2020 C/TAXAP/747/2019 ORDER 6. perusal of sub section (1) would indicate that Pr. Commissioner or Commissioner may call for and examine record of any proceedings under this Act, and if he considers that any order passed thereon by AO is erroneous which has caused prejudice to interest of Revenue, then, he may after giving assessee opportunity of hearing and after conducting inquiry, as he deems necessary pass such order thereon, as circumstances justify, viz. he may direct for passing fresh assessment order; cancel assessment order and direct conducting fresh inquiry. He may pass assessment order himself. emphasis is that on examination of record, Ld. Commissioner should satisfy that order passed by AO is erroneous and prejudicial to interest of Revenue; meaning thereby, there should be valid order in existence which can be termed as erroneous, and which can be appreciated as causing prejudicial to interest of Revenue. In present case, cognizance was taken by ld. Commissioner on re assessment order. This cognizance was taken in month of March, 2017, but on 18.5.2016 this order stood quashed by CIT(A). Order of ld. CIT(A) has been accepted by department which is final. This order has been extinguished. If it is no more in existence, then how it could be considered that this order is erroneous and it has caused prejudice to interest of Revenue. Similarly, if we peruse sub section (2) of Section 263, then it contemplates that no order should be made under sub section (1) after expiry of two years from end of financial year in which orders sought to be revised was passed. Now action under Section 263 has been contemplated in March, 2017. order passed under section 143(3) r.w.s.147 has already been quashed, no action can be taken against this order, because it is not in existence. In such situation, action could be taken against assessment order passed under section 143(3) because in that case also this issue must not been examined. This order was passed on 15.10.2011. Two years would expire from end of financial year in which this order was passed on 31.3.2014. Action could be taken before 31.3.2014 and not in 2017. Thus, if order of Ld. Commissioner is looked into in light of these facts, then it is not sustainable in eye of law. It is accordingly quashed. 4. Thus, it appears from finding recorded by appellate tribunal that as re assessment proceedings came to be quashed and same has been accepted by department, according to appellate tribunal, there is no scope now for Commissioner to exercise any power under Section 263 of Act, 1961. Page 2 of 3 Downloaded on : Tue Jan 07 10:27:28 IST 2020 C/TAXAP/747/2019 ORDER 5. Having heard learned senior counsel Mr. Bhatt appearing for revenue and having gone through materials on record, we are of view that there is no substantial question of law involved in this appeal. Although Mr. Bhatt tried to persuade us to take view that two issues on which power is required to be exercised under Section 263 of Act. 6. We are of view that as re assessment proceedings came to be quashed and same has been accepted, no useful purpose would now be served to permit Commissioner to exercise power under Section 263 of Act. We do not find any infirmity in impugned order passed by appellate tribunal. 7. In result, this appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) aruna Page 3 of 3 Downloaded on : Tue Jan 07 10:27:28 IST 2020 Pr. Commissioner of Income-tax v. Rishi Kiran Logistic P. Ltd