INCOME TAX ACT, 1961

Section 253

Appeal (Tribunal) - Maintainability - Bogus purchases - Appeal against order passed in consequence of direction in order under section 263

Assessment was sought to be revised by the Administrative CIT vide order under section 263 of the Act wherein the assessment framed was set aside by making the observation that the issue of claim of purchases made by the assessee from M/s. United Marketing was not correct and the same requires to be disallowed. The AO while giving effect to the order passed under section 263 of the Act had also chosen to make enquiry from M/s. United Marketing to examine the genuineness of the purchases claimed to have been made by the assessee by issuing notice under section 133(6) of the Act. Since, no response was received from M/s. United Marketing, the AO proceeded to disallow the claim of purchases totally. ITAT found that the purchases from M/s. United Marketing made by the assessee was genuine based on the documentary evidences submitted. Held: The disallowance has been made by the AO in the order giving effect to the order passed by the CIT under section 263 by following the directions of the CIT. Hence, practically the hands of the AO were tied which could be evident from the observations made by the Administrative CIT in his section 263 order. The assessee should have preferred an appeal before Tribunal against the order passed under section 263 of the Act, which was not done in the instant case. In this scenario, the assessee cannot have any grievance over the action of the AO in making the disallowance of purchases by following the directions of the CIT under section 263 of the Act. Accordingly, appeal itself is not maintainable.

Relied:Collector, Land Acquisition v. Mst. Katiji & Ors. 1987) 167 ITR 471 (SC) : 1987 TaxPub(DT) 1279 (SC)

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2009-10

SUBSCRIBE FOR FULL CONTENT