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TMI Blog2021 (12) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... cause of delay being reasonable, condone the delay and admit the appeal for hearing. 3. At the outset, the Ld. A.R. of the Assessee Shri Gaurav Bansal submitted that the assessee is challenging usurpation of jurisdiction by the Ld. PCIT to exercise his revisional jurisdiction without satisfying the condition precedent as prescribed u/s. 263 of the Act i.e. without holding validly that the AO's order was erroneous as well as prejudicial to the revenue. According to Ld. A.R, the Ld. PCIT had issued show cause notice (SCN) dated 20.01.2021 wherein he had raised only one issue i.e. erroneous carry forward of loss u/s. 80 of the Act (refer page 123-124 of PB) and pursuant to which (SCN) the assessee promptly objected against such interference and brought to the notice of the Ld. PCIT that there was no error on the part of the AO on this issue and explained about it. However, the Ld. PCIT having accepted this contention of the assessee dropped the issue however erroneously have set aside the assessment order for de novo assessment, which action according to Ld. A.R is patently without jurisdiction because the fault on which the Ld. PCIT wanted to exercise his revisional jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplied with the requisition issued by the AO. The AO noted that the assessee society was incorporated on 30.07.2013 and by laws have been registered in AY 2015-16. The AO noted that the assessee being a cooperative society is engaged in accepting deposits raising loans receiving grants and also making loans and advances, credit facility to its members. According to AO, pursuant to his query the assessee had filed various documents to explain the questionnaire raised which has been checked and examined by him. And thereafter the AO being satisfied with the explanation and records submitted by the assessee accepted the return of income of the assessee by order dated 12.12.2018. This action of the AO has been proposed to be interfered by the Ld. PCIT-9, Kolkata who conveyed his desire through a Show cause notice (SCN) dated 20.01.2021 wherein he has brought to the notice of the AO the following error supposed to have been made by the AO while framing the assessment order dated 12.12.2018. The sole fault/error pointed out by the Ld. PCIT by SCN is as under: Erroneous carry forward of loss u/s. 80 of the Income Tax Act: From the examination of the records, it is further unearthed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the erroneous presumption of Ld. PCIT to invoke the revisional jurisdiction being found to be factually wrong, the assessee prayed for dropping of the revision proceedings. It is noted that the Ld. PCIT has reproduced the assessee's reply/objection/prayer to drop the proceedings at para 4 of his impugned order; and thereafter from a perusal of para 5 to the concluding para at 9 we note that the Ld. PCIT has not mentioned about any other issues which he found fault with being confronted with the assessee [other than a reference at the beginning of impugned order about a proposal made by the AO to Ld. PCIT which was supposed to be "Note not for the assessee" wherein he has recorded certain observations which according to AO says about lack of verification due to paucity of time]. 6. We note that though certain observations have been made by the AO in the "Notes not for the assessee" it was stated that there was lack of verification, however the Ld. PCIT while proposing the revisional action has not confronted these issues other than the issue of carry forward loss by way of show cause notice dated 20.01.2021. So we note that other than the issue of carry forward of loss, no othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the revisional proceedings an opportunity of hearing should be granted to the assessee. The Hon'ble Supreme Court in this regard observed "no notice is required what is contemplated by Section 263" is an opportunity of hearing to be given to the assessee failure to give such an opportunity could render the revisional order legally fragile not on the ground of lack of jurisdiction but on the ground of violation of principal of natural justice and the Hon'ble Supreme Court referred to the earlier decision of its own in Geeta Devi Agarwal vs. CIT in (1970) 76 ITR 496, so according to us even though notice as such is required in revisional proceedings, the Ld. PCIT before holding the AO's action on any issue as erroneous insofar as prejudicial to the revenue is bound by law to give opportunity to assessee to rebut/clarify/explain the issue, failure to do so makes the order fragile for violation of natural justice. In the facts discussed (supra) this omission on the part of Ld. PCIT according to us not only makes the impugned order fragile for violation of natural justice, the Ld. PCIT lacks of jurisdiction to pass the impugned order because firstly the Ld. PCIT trie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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