2022 (2) TMI 1439 - AT - Income Tax

Revision u/s 263 - as per CIT assessee has not replied to the show cause notices issued by the Ld. PCIT - HELD THAT - We note that the assessee had in fact responded to the show cause notice of the Ld. PCIT, still the Ld. PCIT has observed that the assessee has not responded to his show cause notice which prompted him to pass the impugned order ex parte. Therefore, according to us, the impugned order of the Ld. PCIT is vitiated for violation of natural justice and consequently has to be set aside. We restore the action of PCIT back to his file, for de-novo consideration. While doing so, the Ld. PCIT has to consider the objections raised by the assessee on law as well as factual and thereafter, to decide whether to proceed with the action u/s. 263 in accordance to law. And the assessee to file written submission/objection and supporting documents, if advised to do so in the de-novo proceedings before the PCIT. Restore the same back to the file of Ld. PCIT to decide afresh after hearing the assessee in accordance to law. Appeal of the assessee is allowed.

Summary

Issues involved: Appeal against order of Ld. PCIT under section 263 of the Income Tax Act, 1961 for AY 2012-13.

Analysis:
1. The appeal was filed by the assessee against the order of Ld. PCIT-Asansol under section 263 of the Income Tax Act, 1961 for the assessment year 2012-13. The Ld. PCIT had observed that the assessee failed to comply with the show cause notices despite being served and provided with enough opportunities to be heard. However, the Ld. A.R. of the assessee contended that the assessee did respond to the show cause notice by filing objections on 17.02.2021, which were forwarded to the Ld. PCIT via email and uploaded in the ITBA system. The Tribunal noted that the Ld. PCIT's observation was incorrect as the assessee had indeed replied to the show cause notice. Consequently, the Tribunal held that the impugned order of the Ld. PCIT was flawed for violating natural justice and ordered to set it aside. The matter was remanded back to the Ld. PCIT for reconsideration, instructing him to consider the objections raised by the assessee, both on legal and factual grounds, before deciding whether to proceed under section 263 of the Act. The assessee was directed to submit written submissions, objections, and supporting documents during the fresh proceedings. The Tribunal allowed the appeal of the assessee and pronounced the order on 18th February 2022.

2. The Tribunal emphasized the importance of adhering to principles of natural justice in tax proceedings, highlighting that failure to provide a fair opportunity of being heard could render the orders invalid. By directing the Ld. PCIT to conduct a de-novo consideration of the matter, the Tribunal ensured that the assessee's objections and submissions would be duly considered before any further action under section 263 of the Act. This decision underscored the significance of procedural fairness and the right to be heard in tax assessments, safeguarding the assessee's interests and upholding the rule of law in tax administration.

3. The Tribunal's ruling exemplified the judicial oversight exercised by appellate authorities to rectify procedural irregularities and ensure a fair and transparent adjudication process in tax matters. By setting aside the impugned order and remanding the case for fresh consideration, the Tribunal upheld the principles of natural justice and procedural fairness, underscoring the need for tax authorities to act in accordance with the law and provide adequate opportunities for taxpayers to present their case. The decision underscored the Tribunal's role in safeguarding the rights of taxpayers and maintaining the integrity of the tax assessment process, thereby promoting accountability and adherence to legal standards in tax administration.