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2021 (5) TMI 411 - AT - Income TaxViolation of principles of natural justice - right to be heard - Rectification u/s 154 - Period of limitation - return is e-filed - bonafide mistakes of ignorance of facts - Rectification of amount received compulsory acquisition of land by the Government - rectified computation of income and proof of payment for compensation made by the District Magistrate (SDM)-cum-Land Acquisition Collector, Sangrur for consideration and necessary action HELD THAT - Rectification application duly e-filed was not disposed of within the statutory time limit remains unaddressed. Similarly, the reasoning that the application referred to by the AO is a manual application filed later by the Counsel for the appellant cannot be considered to be the original application filed through e-portal appears to be a case of heads you loose and tails also you loose. The submission afforded as an argument cannot be substituted for the original application to the prejudice of the assessee. If there were deficiencies, in the e-filing of the application, these should have been notified to the assessee for correcting the defect. The tax authorities cannot be seen to violate the Statutory time lines at their whims and fancies. The disposal of the appeal in this manner cannot be upheld. Similarly the reasoning that, The manual application signed by the Counsel, is in itself not regular unless it is by way of a reminder with regards to the online application filed also does not address the issues at hand. The issue remains open since it is unclear was it treated as a reminder or a substitution. , in case there were any deficiencies in the rectification application filed by the assessee, then the defect should have been notified and opportunity to correct the same should have been provided. The assessee cannot be subsequently burdened on account of lapses etc. which were never pointed out. The primary issue which thus, remains for consideration is can the rectification order be said to have been passed within the statutory timeline. On the facts as available on record, it appears that the answer is no. However, since the issue has been deflected/obfuscated, it is remanded back for consideration afresh. What would constitute record? - what would constitute the record for a case of rectification like this wherein the return is e-filed? - As limitations of documents only filed on e-portal cannot operate against the citizen taxpayers. The systems set in place for robust tax collection cannot be so used as to deprive the tax paying citizens from getting a fair hearing and seek a proper adjudication on disputed facts. Such an action would be wholly unjustified. The systems and e-portals are still in the process of being fine tuned and still in the process of being perfected. They cannot be presumed to be so sacrosanct and final and thus beyond critical scrutiny. For the purposes of the present proceedings, as will confine myself to holding that every statutory order/decision and relevant facts which went into the decision making of punching the figures on e-portal at the relevant point of time would constitute the record for the purposes of proceedings u/s. 154. All bonafide mistakes of ignorance of facts; misinterpretation and incorrect understanding of relevant statutory provisions etc. applicable at that specific point of time would be covered under this umbrella. The axioms that the mistake is rectifiable only which is patently evident on the face of the record of course remains inviolate what has been elaborated is what would constitute the record. Can written submissions without a conscious waiver be treated as waive of Right to be heard? - In the facts of the present case, it is seen that written submissions had been advanced. It is seen that the submissions were considered but did not find favour with the First Appellate Authority as the order u/s. 154 stood confirmed. From the body of the order, it is not evident whether the assessee was confronted with the fact that its written submissions were not sufficient for relief prayed for and that the assessee was given an opportunity of being heard thereafter. In the eventuality, written submissions of the assessee were found to be insufficient for granting relief and were considered to be not relevant, then the assessee should in all fairness be necessarily confronted with the fact that its claim was not allowable and be given due notice thereof. The purpose being that if the assessee still has something further to say, the opportunity of so saying should have been provided. The arbitrary presumption that the assessee shall have nothing to state cannot be upheld. The due process of law envisages an opportunity of fair representation. As evident from the impugned order assailing which specific ground invoking principles of natural justice has been taken that the right to be heard was not waived off by the assessee by mere making available of the written submissions to the First Appellate Authority. No doubt a party may choose to waive the right to be heard and instead choose to rely only on written submissions - it is the duty of the adjudicating authorities to ensure that the waiver so made is intelligently made and with full knowledge and understanding i.e. with the foreknowledge that the right to be heard 'exists. The record is silent on this aspect. In the facts of the present case there is nothing on record to show that the right to be heard was consciously and knowingly waived. The order cannot be upheld and deserves to be set aside. The impugned order is set aside in toto and restored back to the file of the CIT(A) with a direction to pass a speaking order in accordance with law first on the maintainability of the order itself after giving the assessee a reasonable opportunity of being heard - Appeal of the assessee is allowed for statistical purposes.
Issues Involved:
1. Violation of Principles of Natural Justice 2. Rejection of Rectification Application 3. Limitation for Passing Rectification Order 4. Jurisdictional Challenge 5. Maintainability of Rectification Application 6. Waiver of Right to be Heard Detailed Analysis: 1. Violation of Principles of Natural Justice: The appellant contended that the order passed by the CIT(A) violated the principles of natural justice. The tribunal noted that the written submissions of the assessee were considered, but it was not evident if the assessee was confronted with the fact that its submissions were insufficient. The tribunal emphasized that the right to be heard is fundamental and should not be presumed waived unless explicitly stated by the assessee. The tribunal concluded that the order could not be upheld due to the lack of opportunity for the assessee to be heard. 2. Rejection of Rectification Application: The CIT(A) rejected the rectification application on the grounds that it was not a mistake apparent from the record. The tribunal observed that the rectification application was filed electronically by the assessee and later manually by the counsel. The tribunal highlighted that any deficiencies in the e-filing should have been notified to the assessee for correction. The tribunal found the rejection of the rectification application unjustified as the primary issue of whether the rectification order was passed within the statutory timeline remained unaddressed. 3. Limitation for Passing Rectification Order: The assessee argued that the rectification order was barred by limitation as it was passed after the statutory period of six months. The tribunal noted that the rectification application was filed on 01.12.2017 and transferred to the concerned AO on 05.12.2017, but the order was passed on 09.11.2018, beyond the six-month period prescribed under Section 154(8) of the Income Tax Act. The tribunal held that the rectification order was not passed within the statutory timeline, and the issue was remanded back for fresh consideration. 4. Jurisdictional Challenge: The assessee challenged the jurisdiction of the AO, arguing that the rectification application was not filed by the assessee but by the counsel. The tribunal referred to the case law of Smt. Jangir Kaur, Ambala City vs Assessee, which supported the view that the rectification application should be filed by the assessee. The tribunal found that the application filed by the counsel without the assessee's signature was non-est in the eyes of law. However, the tribunal noted that the primary issue of limitation remained unaddressed and remanded the matter for fresh consideration. 5. Maintainability of Rectification Application: The assessee contended that the rectification application was maintainable as it was filed electronically by the assessee. The tribunal observed that the CIT(A) did not address whether the manual application filed by the counsel was a reminder or a substitution for the e-filed application. The tribunal held that the rectification application was maintainable and the issue needed to be reconsidered by the CIT(A). 6. Waiver of Right to be Heard: The tribunal emphasized that the right to be heard is a fundamental principle of natural justice. The tribunal found no evidence that the assessee consciously waived the right to be heard by submitting written submissions. The tribunal held that the order could not be upheld as the assessee was not given an opportunity to be heard after the written submissions were found insufficient. Conclusion: The tribunal set aside the impugned order and remanded the matter back to the CIT(A) to pass a speaking order in accordance with law, first on the maintainability of the order itself after giving the assessee a reasonable opportunity of being heard. If the assessee does not succeed, the other issues challenged shall become live, and the CIT(A) shall pass a speaking order in accordance with law. The appeal of the assessee was allowed for statistical purposes.
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