The DCIT v. Valco Industries Ltd.

Parties Involved

Facts Summary

The assessee filed its return of income for the assessment year 2013-14 declaring income of Rs 2,64,39,760/- after claiming deduction u/s 80IC amounting to Rs 5,87,89,770/-. The assessment was completed at an assessed income of Rs 4,76,40,025/- by making an addition of Rs 2,12,00,625/-. A reassessment was completed on 27/11/2017 at an income of Rs 8,87,92,864/- wherein the deduction claimed u/s 80IC was restricted to 30%. The disallowance was confirmed by the ld CIT(A), however, on further appeal, the Coordinate Bench deleted the disallowance holding that the assessee was eligible for 100% deduction u/s 80IC. The ld PCIT passed a revisionary order dated 30/03/2021 revising the assessment order passed u/s 147 r/w 143(3) on 27/11/2017. The AO passed a consequential order u/s 263 r/w 147 r/w 143(3) dated 20/01/2022 disallowing excess deduction amounting to Rs. 4,11,52,839/-. The assessee challenged the order of the ld PCIT before the Tribunal and the order was set-aside by the Coordinate Bench vide its order dated 14/06/2022 in ITA No. 41/Chd/2021. The ld CIT(A) allowed the appeal filed by the assessee, reversing the consequential assessment order dated 20/01/2022 passed u/s 263 r/w 147 r/w 143(3). The Revenue is in appeal before the ITAT.…

Legal Issues

• 1. Whether the Ld. CIT(A) is right in holding that the consequential order passed u/s 147 r.w.s.263 of the Act, by the Assessing Officer in pursuance to order of PCIT(Central) u/s 263 of the IT. Act, 1961 as void ab initio?
• 2. Whether the Ld. CIT(A) is right holding such consequential order as void an initio ignoring the facts that order passed by Ld. PCIT (Central), Gurugram u/s 263 has not attained its finality?
• 3. Whether the Ld. CIT(A) was right in holding that consequential order passed u/s 147 r.w.s. 263 of the Act as void as initio without giving any liberty to the Revenue to revive the proceedings consequent to any directions or order by the Hon'ble High Court in favour of Revenue on the issue of order passed by Ld. PCIT (Central), Gurugram u/s 263 of the IT. Act?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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