2023 (5) TMI 961 - AT - Income Tax

Revision u/s 263 - selection of case under scrutiny was unsecured loans from the persons who have not filed their returns of income - HELD THAT:- PCIT has given a general direction to the Assessing Officer to frame entire assessment order again, whereas PCIT in his revision order raised the specific issue to examine the unsecured loan by the AO. Hence the direction given to the Assessing Officer is not in accordance with the specific issue identified by ld PCIT.

Therefore, we note that ld PCIT has not provided adequate opportunity to the assessee to file relevant material evidences and documents before him during the revision proceedings and hence the revision order u/s 263 of the Act was passed by ld PCIT in hurry.

PCIT has directed the AO to frame the entire assessment afresh which is not acceptable, as the issue identified by ld PCIT was unsecured loan, and direction would have been given by ld PCIT only for examination of unsecured loan.

As in case M.S.Gill vs The Chief Election Commission [1977 (12) TMI 138 - SUPREME COURT] held “The dichotomy between administrative and quasi-judicial function vis-à-vis the doctrine of natural justice is presumably obsolescent after Kraipak (A.K. Kraipak vs UOI [1969 (4) TMI 103 - SUPREME COURT] which makes the water-shed in the application of natural justice to administrative proceedings. The rules of natural justice are rooted in all legal systems and are not any new theology.

They are manifested in the twin principles of nemo judex in parte sua (no person shall be a judge in his own case) and audi alterem partem (the right to be heard). It has been pointed out that the aim of natural justice is to secure justice. Considering the above facts, we note that assessee has not given sufficient opportunity of being heard and could not plead his case successfully before the ld. PCIT, hence it is a violation of principle of natural justice. We note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case.

Set aside the order of the ld. PCIT and remit the matter back to the file of the ld. PCIT to adjudicate the issue afresh on merits - Appeal of the assessee is allowed for statistical purposes.