2019 (9) TMI 56 - HC - Income Tax

Revision u/s 264 - requirement of affording opportunity of being heard - power and obligation of CIT - erroneously taken up a petition for condonation of non-existent delay, condoned the same and passed orders on merits - HELD THAT - Obvious error that has occurred in the impugned order, wherein a petition for condonation of delay has been taken up when there was no delay, this Court deems it appropriate to set aside the order with a direction to the 1st respondent to hold personal hearing on a specified date, time and venue and dispose of the matter afresh. Before that, it is to be noticed that even if there was a delay condonation petition, on condonation of delay, it would have been appropriate to communicate a date of personal hearing for main matter in cases where Revisional authority at his discretion chooses to give a personal hearing. At the risk of repetition, it is reiterated that this is a case, where 1st respondent has chosen to give an opportunity of personal hearing at his discretion though it is not statutorily imperative. Impugned order bearing reference C.No.217/264/Pr.CIT-1/2017-18 dated 04.03.2019 made by the 1st respondent is set aside. It is made clear that impugned order is set aside on the ground that it has erroneously taken up a petition for condonation of non-existent delay, condoned the same and passed orders on merits. In other words, no opinion is expressed on the merits of the matter.

Issues:
1. Revision of assessment order under Section 264 of Income Tax Act, 1961
2. Exercise of discretion in granting personal hearing
3. Condonation of delay in filing revision application
4. Error in considering a petition for condonation of delay when there was no delay

Issue 1: Revision of assessment order under Section 264 of Income Tax Act, 1961

The High Court considered the revision application filed by the assessee under Section 264 of the Income Tax Act, 1961, challenging an assessment order dated 29.12.2017. The court noted that the revision application was filed within the stipulated one-year period from the date of communication of the assessment order, thereby establishing that the application was within the prescribed time limit as per Section 264(3) of the Act. The court emphasized that the power of revision vested in the respondent could be exercised either on the respondent's own motion or on an application by the assessee, which was the case here.

Issue 2: Exercise of discretion in granting personal hearing

Although not mandatory under Section 264, the 1st respondent exercised discretion to provide an opportunity for personal hearing in this case. The court highlighted that the respondent had the authority to decide whether to grant a personal hearing based on the facts and circumstances of the case. The respondent scheduled a personal hearing on 14.12.2018 and directed the assessee to file written submissions and an affidavit confirming non-filing of an appeal against the assessment order being revised. The court acknowledged the respondent's discretion in providing a personal hearing and the importance of conducting an inquiry before passing an order under Section 264.

Issue 3: Condonation of delay in filing revision application

The court addressed the issue of condonation of delay raised by the assessee in a reply letter dated 11.02.2019, citing medical grounds for the delay. However, the court noted that there was no delay in filing the revision application on 25.06.2018, rendering the request for condonation unnecessary. The court emphasized that all that was required from the assessee was to file an affidavit confirming non-filing of an appeal and attend the scheduled personal hearing, which the assessee failed to do.

Issue 4: Error in considering a petition for condonation of delay when there was no delay

The central theme of the petition revolved around the respondent's erroneous consideration of a petition for condonation of delay when no delay existed. The court highlighted that the respondent's decision to accept the delay condonation plea was unnecessary and led to confusion. The court deemed it appropriate to set aside the order and directed the respondent to hold a fresh personal hearing to dispose of the matter properly. The court emphasized the importance of clear communication and procedural adherence in such cases.

In conclusion, the High Court set aside the impugned order and directed the respondent to conduct a personal hearing on a specified date, emphasizing the need for procedural correctness and timely resolution of the revision application. The court highlighted the importance of following statutory provisions and exercising discretion judiciously in matters concerning revision of assessment orders under the Income Tax Act, 1961.

← Previous Next →