2019 (12) TMI 1639 - AT - Income Tax

Revision u/s 263 - opportunity of being heard should be given to the assessee - HELD THAT - As per the provision of sub-section (1) of section 263, an opportunity of being heard should be given to the assessee which in the assessee s case is absent. We note that legal maxims, Audi alteram partem literally means hear the other party . This maxim is based on the principle of natural justice. It means that a person deciding on issue should hear both sides and give each an opportunity of hearing what is being alleged against him. A decision taken without affording both the parties an opportunity to be heard violates the principles of natural justice. An award made in violation of the above said rule may be set aside. On laying of charges, an opportunity to answer it must be given to an individual alleged to have committed an offence. Sufficient notice also should be given to the person against whom the charge is laid. This rule has a universal acceptance and is founded upon the plainest principles of justice. Therefore keeping in mind the principle of natural justice, we are of the view that one more opportunity should be given to the assessee to plead his case before the ld PCIT. Hence, we think it fit and appropriate to remit this issue back to the file of ld. PCIT for de novo adjudication after giving sufficient opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Challenge to correctness of order passed by PCIT u/s 263 of the Income Tax Act due to lack of opportunity of being heard.

Analysis:
The appeal pertains to the assessment year 2010-11 and challenges the order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, 1961. The appellant contended that the notices issued by the PCIT were not served on them, depriving them of the opportunity to respond. The Revenue Department did not dispute this fact and acknowledged the absence of an opportunity for the appellant to be heard. The Tribunal noted that as per section 263(1) of the Act, an opportunity of being heard should be given to the assessee, irrespective of whether a notice is issued. The Tribunal emphasized the principle of natural justice, "Audi alteram partem," which mandates that both parties should be heard before a decision is made. Therefore, the Tribunal decided to remit the issue back to the PCIT for fresh adjudication, ensuring that the appellant is given a fair opportunity to present their case. The Tribunal clarified that its decision did not express any opinion on the merits of the issues raised. The appellant was directed to submit the necessary documents and evidence during the proceedings. The appeal was allowed for statistical purposes.

In conclusion, the Tribunal's decision highlights the importance of providing the assessee with a fair opportunity to be heard, as mandated by section 263(1) of the Income Tax Act and the principles of natural justice. The Tribunal's ruling to remit the issue back to the PCIT for de novo adjudication ensures that the appellant's right to a fair hearing is upheld, emphasizing the fundamental principle that no decision should be made without affording both parties the chance to present their arguments.