Dismissal of revision under Section 263 by ITAT and subsequent Order by AO based on appeal - CIT(A) dismissing the same - Validity

Facts:

Assessee's case was made under Section 143(3) and subsequently reopened by CIT under Section 263 citing 44AD ought to have been applied with 8% to be the presumptive taxable income. This was contested before the CIT(A) who remanded the assessment back to the AO for fresh assessment. In the meantime assessee approached the ITAT against the order of PCIT's reopening under Section 263 which was quashed by the ITAT. Subsequently the AO passed an order for the fresh assessment under Section 143(3) read with 263 as well. This was also appealed before the CIT(A) who initially cancelled the assessment as ITAT had quashed the reopening per se. Subsequently the CIT(A) made a corrigendum to his order that it was not cancellation of the order but it was dismissal of assessee's appeal. This dismissal via corrigendum was appealed with a delay of 1030 days with condonation (due to shift from CIT(A) to faceless assessment procedure) before the ITAT.

Held in favour of the assessee that once the order under Section 263 stood cancelled - the subsequent assessments all become invalid. The CIT(A)'s corrigendum also was invalid thus.

Ed. Note: The peculiar circumstances how the case has travelled makes it a noteworthy decision.

Case: B.N. Malatesh v. ITO 2023 TaxPub(DT) 1565 (Bang-Trib)