Facts of the Case

The assessee, Amar Partap Steels Private Limited, filed an appeal before the Income Tax Appellate Tribunal against the revisionary order passed by the Principal Commissioner of Income Tax-2, Jaipur under Section 263 of the Income-tax Act, 1961 for Assessment Year 2021-22. The revision order dated 12.03.2025 had set aside the original assessment order dated 27.12.2022 with a direction to verify share premium of ₹76,19,200 received during the year in light of Section 56(2)(viib) read with Rule 11UA.

Pursuant to the Section 263 order, the Assessing Officer passed a fresh assessment order under Section 144 read with Sections 263 and 144B on 29.10.2025. After examining valuation reports and documentary evidence, the Assessing Officer accepted the assessee’s submissions in entirety and assessed the income at ₹2,33,40,480, being the returned income, with nil variation.

In view of complete relief granted in the consequential proceedings, the assessee filed a written application before the Tribunal seeking permission to withdraw the appeal, stating that the appeal against the Section 263 order had become infructuous. The Departmental Representative raised no objection to the withdrawal.

Issues Involved

Whether the appeal filed against the revisionary order under Section 263 survived for adjudication when the assessee had already received complete relief in consequential assessment proceedings and sought withdrawal of the appeal.

Petitioner’s Arguments

The assessee submitted that subsequent to the Section 263 order, the Assessing Officer had completed the consequential assessment after detailed verification and accepted the returned income without any addition. Since the grievance against the revision order no longer survived, the appeal before the Tribunal had become infructuous and deserved to be dismissed as withdrawn.

Respondent’s Arguments

The Revenue, through the Departmental Representative, stated that it had no objection to the withdrawal of the appeal by the assessee.

Court Order / Findings

The ITAT Jaipur noted that the assessee had filed a written application seeking withdrawal of the appeal and that the Department had no objection thereto. The Tribunal observed that in view of complete relief granted to the assessee in the consequential assessment proceedings, the appeal against the Section 263 order had become infructuous. Accordingly, the Tribunal permitted withdrawal of the appeal and dismissed the same as withdrawn.

Important Clarification

The Tribunal clarified that where an assessee receives complete relief in consequential proceedings pursuant to a revision order under Section 263, the appeal challenging such revision becomes infructuous. In such circumstances, withdrawal of the appeal is permissible and appropriate.

Final Outcome

The appeal filed by the assessee was dismissed as withdrawn. The challenge to the revisionary order passed under Section 263 was rendered infructuous in view of complete relief granted in the consequential assessment proceedings.

Source Link- https://itat.gov.in/public/files/upload/1766040541-8Un2fg-1-TO.pdf

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