| The Tax Publishers2021 TaxPub(DT) 6119 (Mum-Trib) INCOME TAX ACT, 1961
Section 263
Both the issues in question on the basis of which Pr. CIT assumed jurisdiction under section 263, had been considered and decided in appeal by CIT(A), therefore, Pr. CIT was clearly divested of his jurisdiction to have exercised revisional jurisdiction vested with him under section 263 as regards said issues. Thus, order passed under section 263 was set aside.
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Revision under section 263 - Merger doctrine - Relevant issues considered and decided in appeal by CIT(A) -
Pr. CIT treated order passed by AO as erroneous and prejudicial to the interest of the revenue within the meaning of section 263, for two fold reasons, viz. (i) that AO had short assessed assessee's income by restricting addition under section 68 as regards bogus transactions of sale of shares only to the extent of the capital gain, instead of alleged sale proceeds credited in his bank account; and (ii) AO had short assessed addition under section 69C as regards commission alleged to have been paid by assessee to accommodation entry providers to facilitate bogus sale transactions by quantifying the same on the basis of the capital gain and not the amount of sale consideration. Assessee contended that as both the aforesaid issues in question, had been considered and decided by CIT(A) vide his Order dated 25-1-2019, therefore, Pr. CIT was divested of his jurisdiction to revise the order passed by AO under section 143(3) read with section 153A, dated 29-12-2017 with respect to the said matters. Held: Where an addition, disallowance or any other matter emanating from an order passed by AO has been considered and decided in an appeal, then, as per doctrine of merger,the revisional authority would thereafter stand divested of his jurisdiction to exercise his revisional jurisdiction as regards such matters that have been so considered and decided by the appellate authority. In the instant case, both the issues in question on the basis of which Pr. CIT assumed jurisdiction under section 263, had been considered and decided in appeal by CIT(A), therefore, the Pr. CIT was clearly divested of his jurisdiction to have exercised revisional jurisdiction vested with him under section 263 as regards said issues. Thus, order passed under section 263 was set aside.
Relied:CIT v. Arbuda Mills Ltd. (1998) 231 ITR 50 (SC) : 1998 TaxPub(DT) 57 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, MUMBAI BENCH
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