2021 (8) TMI 1395 - AT - Income Tax

Revision u/s 263 - As per CIT there is failure on the part of the AO to assess the income of the assessee u/s. 144/147 of the Act and found it erroneous as it is prejudicial to the interest of the revenue - HELD THAT - The impugned order has been passed by the Ld. PCIT without affording proper opportunity of being heard to the assessee. Though the three (3) notices were issued by the Revenue fixing the date of hearing but finally the adjournment application as part of the record before us though suggests the request for adjournment on behalf of the assessee before the ld. PCIT made the same is not reflecting in the order passed by the ld. PCIT dt. 13-03-2020 issued after four(4) days from the date of making such request. In that event we find that the principle of natural justice has not been properly adhered to. Therefore for the ends of justice we find it fit and proper to set aside the issue to the file of the PCIT with a further direction upon him to adjudicate the matter on merits positively upon granting an opportunity of being heard to the assessee and upon taking into consideration the evidences. Appeal of the assessee is allowed for statistical purpose.

Summary

Issues:
Delay in filing the appeal due to pandemic situation and lockdown. Validity of notice issued by Ld. PCIT u/s. 263 of the Act. Adherence to principles of natural justice in passing the impugned order.

Analysis:
The appeal was filed with a delay of 56 days due to the pandemic situation and lockdown, which hindered the preparation and filing process. The assessee relied on a government-issued Notification/Ordinance granting an extension for filing appeals affected by the pandemic, which was not objected by the ld. DR. Considering the practical difficulty faced by the assessee and the government's extension, the delay was condoned for the ends of justice.

The Ld. PCIT issued a notice u/s. 263 of the Act, alleging failure by the Ld. AO to assess the income of the assessee properly. The Ld. PCIT found discrepancies in the assessment process and set aside the issue to the AO for reassessment based on observations made in the impugned order. During the appeal hearing, it was revealed that the assessee did not receive the notices issued by the Revenue, and there were delays attributed to the illness of the partners of the assessee company. The Ld. PCIT passed the impugned order without affording proper opportunity of being heard to the assessee, violating the principles of natural justice. Consequently, the Tribunal set aside the issue to the Ld. PCIT for proper adjudication on merits, ensuring the assessee's right to be heard and submit evidence.

In conclusion, the Tribunal allowed the appeal of the assessee for statistical purposes, emphasizing the importance of adhering to principles of natural justice in legal proceedings. The decision was pronounced in the open court on 25-08-2021.