2022 (1) TMI 586 - ITAT JAIPUR - Income Tax

Head Note / Extract:
Revision u/s 263 by CIT - deduction claimed u/s 54EC - denial of natural justice - no documentary evidence was placed on record by the assessee to establish the genuineness of the fact of claiming deduction u/s 54EC - HELD THAT:- All documents, notices and replies coupled with documents goes to show that the A.O. during the course of assessment had raised queries/enquiries and sought information from the assessee on the issues and the assessee had also replied to the said queries and filed supportive documents. After selecting the case of the assessee for limited scrutiny, the A.O. issued detailed query letter to the assessee and asked to produce the details and evidences for verification and in response thereof, the assessee had furnished all the details vide reply to the AO - on perusal of the assessment order, the A.O. himself has clearly admitted in the said order that the assessee through his representative had submitted electronic response through e-filling portal/ITBA and necessary details on various queries were also submitted by the ld. AR and after examining the said details, the A.O. had categorically mentioned that during the course of assessment proceedings, the assessee had submitted reasonable details and documents related to the limited scrutiny issue which were examined by the A.O. and after considering the submission and supporting details filed by the assessee on the limited issue, the A.O. had accepted the returned income. Although, it is an admitted case by the ld. Pr.CIT that he had called for the record and gone through and examined the assessment records of the preset case which was selected for ‘limited scrutiny’ through CASS but he was of the view that the AO has not made proper & detailed i.e deep inquiry on the issue. The ld. Pr.CIT has not looked into details called for by the A.O. and the replies submitted by the assessee to the A.O. during the assessment proceedings. However, the ld. Pr.CIT has only stated that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Hence the conclusion of the ld. Pr. CIT that the order is prejudicial to the interest of the Revenue is not a matter of subjective satisfaction of the ld. Pr. CIT. He, therefore, ought to have found out this on the basis of objective material after assessing the contention raised by the assessee. He, however, failed to do so and reached a conclusion that the order was prejudicial with a view that the present AO shall undertake that exercise after the assessment has been set aside for his consideration. Thus, according to us, such a view or action is not well founded in the law as has already been held by the various Hon’ble High courts. It is mandatory to apply the principles of natural justice irrespective of the fact as to whether there is any statutory provision or not. As per facts of the present case, the assessee was not afforded opportunity much less sufficient opportunity to give the reply to the show cause notice. Therefore it is clear that the ld. Pr. CIT in a hurriedly manner without affording opportunity of hearing to the assessee, had passed impugned order by violating principles of audi alteram partem. Thus, keeping in view the principles laid down by the Coordinate Bench of Cuttak ITAT in the case of Jaidurga Minerals [2020 (8) TMI 272 - ITAT CUTTACK] and in the case of Jagnnath Prasad Bhargva [1942 (7) TMI 23 - ALLAHABAD HIGH COURT] and in view of the above factual position, the ld. Pr.CIT has committed a gross error in not providing effective/reasonable opportunity of being heard to the assessee before passing the order. Accordingly, the revisional proceedings framed u/s 263 stands quashed - Decided in favour of assessee.