2017 (6) TMI 550 - AT - Income Tax

Revision u/s 263 - Held that - If there is an order on 31.12.2008, certainly the DR would have brought it to the notice of the Tribunal on 1.10.09 when the assessee submitted that there was no such order and by efflux of time the appeal had become infructuous. We, therefore, find that there is nothing on record to suggest that, as a matter of fact, there was an order passed by the AO on 31.12.2008 u/s 144 r.w.s. 263 and that there was an error that had crept in the proceedings of the Tribunal, while accepting the plea of the Counsel on either side that there was no order pursuant to the revisionary order of the CIT (A) in this matter. Not only that the evidence placed on record indicates that the notice dated 19.12.2008 was not issued immediately to the assessee and it was received only on 2.2.2009, much later to the so called date of order. Even the order does not indicate that an opportunity has been issued on 19.12.2008 and the order indicates only those dates on which the assessee appears before the AO in the first assessment proceedings. Service of the impugned order as late as 17.04.2010 also indicates that the order could not have been passed before the order of the ITAT allowing the withdrawal of the appeal. The order of the ITAT was served on the assessee with the address at Begum Bazar , but the revised assessment order placed indicates the address as LIC Colony, Secunderabad . It is also noticed that the order was not sent by post as is the practice in the Department, but through process server which is unusual. Only his report was relied that assessee was not available in the given address. For these reasons, we are of the considered opinion that the submissions of the assessee that there was no order passed within the due date, pursuant to the revisionary order u/s 263 of the Act, go unchallenged and unimpeachable, and the observations CIT (A) in the impugned order are unsubstantiated. Appeal of the assessee is allowed.

Summary

Issues:
Challenge to order dated 11.09.2013 passed by CIT (A)-18 Mumbai for A.Y 2003-04; Appeal dismissed by CIT (A) as barred by limitation; Allegation of backdated notice by AO; Appeal before ITAT challenging CIT (A) order; Assessment order u/s 144 r.w.s 263 of the Act dated 31.12.2008; Allegations of violation of natural justice and backdating of orders.

Analysis:
The case involved the assessee's appeal challenging the order dated 11.09.2013 passed by the CIT (A)-18 Mumbai for the A.Y 2003-04. The assessee claimed that the AO issued a notice with an ante date of 19.12.2008, which was received after the due date, rendering the subsequent order u/s 144 r.w.s 263 of the Act dated 31.12.2008 invalid. The assessee contended that the appeal was dismissed by the CIT (A) on the grounds of limitation without proper notice or opportunity of hearing. The ITAT reviewed the chronology of events, including the assessee's attempt to withdraw the appeal due to the absence of an order giving effect to the CIT (A) order u/s 263 of the Act before 31.12.2008. The ITAT found discrepancies in the dates and service of the notice, supporting the assessee's claim of backdating and lack of proper communication.

The ITAT noted that there was no evidence to suggest that an order was passed by the AO on 31.12.2008 as claimed, and discrepancies in the address and method of service further raised doubts about the validity of the orders. The ITAT agreed with the assessee's argument that no order was passed within the due date pursuant to the revisionary order u/s 263 of the Act. The ITAT concluded that the observations of the CIT (A) were unsubstantiated, and the orders lacked a legal basis. Therefore, the ITAT allowed the appeal, quashing the impugned orders of the authorities.

In summary, the ITAT found in favor of the assessee, highlighting discrepancies in the dates, service of notices, and lack of evidence supporting the AO's claimed actions. The ITAT held that the orders lacked legal standing, supporting the assessee's challenge to the order dated 11.09.2013. The decision emphasized the importance of following due process and ensuring the validity of orders issued by tax authorities to uphold natural justice principles and legal requirements.