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2014 (3) TMI 852 - HC - Income TaxValidity of order - principle of natural justice - nature of an order passed by AO after an inquiry made with another AO about the Assessee as per direction given by CIT(A) – Exercise of power u/s 251 of the Act – Held that:- The AO had addressed a letter on 11 July 2013 to the ITO, Ward-VI(I), Chennai, who had jurisdiction over the proprietor of the two parties in respect of whom the CIT (A) had directed an inquiry to be made - Thereafter, a letter was addressed on 21 February 2014 to the ITO, Ward-25(2), New Delhi regarding the verification of transactions of the aforesaid two parties with the assessee since the PAN had been transferred to the aforesaid ITO at New Delhi. Admittedly, these facts were not disclosed to the assessee nor was the assessee given any opportunity to controvert the material. The Assessing Officer has acted in haste by passing an order without notice to the assessee and in clear breach of the principles of natural justice. Even if we treat the impugned order of the Assessing Officer dated 24 February 2014 as an order under Section 143 (3), it is clear that there has been a violation of the principles of natural justice and it would not be necessary to relegate the assessee to an appeal under Section 246. On the other hand, if the order is treated as an order under Section 251, which is the provision which was invoked by the Assessing Officer, the order would be clearly without jurisdiction and would not be subject to an appeal under Section 246. Hence, in either view of the matter, the impugned order dated 24 February 2014 is unsustainable. – thus, the order is set aside and remanded back to decide afresh – Decided in favour of Assessee.
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