AO’s action of giving effect to a quashed s. 263 revision order termed “assault on rule of law” & “contempt of court”

The CIT passed an order u/s 263 and held that the assessment order was erroneous and prejudicial to the interests of the revenue. This was set aside by the Tribunal. However, despite being aware of the Tribunal’s order quashing the s. 263 order, the AO passed an assessment order to give effect to the s. 263 order. The CIT(A) quashed the assessment order. On appeal by the department to the Tribunal HELD dismissing the appeal:

By the by, we are very much astonished to observe that the AO has passed a revised assessment order even after knowing that the revision order passed by the CIT has been set aside by the Tribunal. The action of the AO could be treated as assault on the rule of law. His action amounts to contempt of court as well. The Revenue could have preferred to file an appeal before the High Court against the order of the Tribunal setting aside the revision order passed by the CIT. If such an appeal has been already filed, well and good. Otherwise, Revenue has no remedy when the Tribunal has set aside the revision order of the CIT. The said order no more exists and the AO has no substratum to build a second round of revised assessment. We do not think that all these matters are unknown to the Assessing Authority. But giving due consideration to the explanations offered by the learned senior officers appearing for the Revenue and also for the reason that the AO might have prompted to act in haste, only in public interest, we do not proceed further in this matter. But we wish that before jumping into such controversial games, the AO ought to have taken advice from his seniors.