The Principal Commissioner of Income Tax's revisional powers under section 263 cannot extend to matters already adjudicated by the Commissioner of Income Tax (Appeals), reinforcing the doctrine of merger.

ORDER

PER RAVISH SOOD, J.M

The present appeals filed by the captioned assessee‟s are directed against the respective orders passed by the Principal Commissioner of Income Tax (Central)-3, Mumbai (for short „Pr.CIT‟) u/s. 263 of the Income-Tax Act, 1961 (for short „Act‟). As common issues are involved in the aforesaid appeals, therefore, the same are being taken up and disposed off together by way of a consolidated order. We shall first take up the appeal of the assessee, viz. Shri. Nitin Kumar Didwania for A.Y.2010-11 in ITA .No.278/Mum/2021. The assessee has assailed the impugned order on the following grounds before us:

“1. On the fact and circumstances of the case as well as in Law, the Learned Principal Commissioner of Income Tax (PCIT) has erred in passing ex-parte order U/s 263 of the Income Tax Act, 1961 without providing sufficient opportunity of being heard to the appellant.

2. On the fact and circumstances of the case as well as in Law, the Learned Principal Commissioner of IncomeTax(PCIT)haserredininitiating proceedings U/s 263 of the Income Tax Act, 1961 (the Act) vide show- cause notice dated 22.01.2021 and passing an order U/s 263 of the Act without considering facts fit Circumstances of the case.

3. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in passing Revision Order u/s.263 of the Income Tax Act, 1961 for the assessment order u/s. 143(3) r.w.s 153A of the Act passed by the Learned Assessing Officer after making adequate enquiries and application of mind, without considering the facts and circumstances of the case.

4. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in considering the order passed u/s. 143(3) r.w.s 153A of the Income Tax Act, 1961 by the Learned Assessing officer is erroneous and prejudicial to the interest of the revenue, without appreciating the facts and circumstances of the case.

5. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in passing the order u/s.263 against the assessment order which was already merged with Learned CIT(A) order, hence order passed u/s.263 is invalid and bad in law.

6. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in directing the Learned Assessing Officer to make further addition of Rs.30,34,332/- on the issue which was already considered by the Learned Assessing officer, while passing theAssessment Order u/s. 143(3) r.w.s 153A of the Act, without appreciating the facts and circumstances of the case.”

2. Issue involved in the present appeal lies in a narrow compass i.e what is the scope of jurisdiction of a revisional authority u/s 263 of the Act, after the order passed by the assessing officer had been considered and decided by an appellate authority.

3. Shorn of unnecessary facts, the assessee had in his return of income filed in response to notice issued u/s 153A of the Act had claimed exemption u/s 10(38) of Long Term Capital Gain on sale of shares. However, the A.O while framing the assessment declined the assessee‟s claim for exemption and assessed the amount of capital gain as an unexplained credit u/s 68 of the Act. Also, an addition @ 5% of the amount of the capital gain was added, on the ground, that the same would have been incurred by the assessee for availing the services of an accommodation entry provider.

4. On appeal, the CIT(A) deleted the aforesaid addition by granting telescoping benefit of unrecorded sales of the group company.

5. Therea