2022 (11) TMI 237 - AT - Income Tax

Revision u/s 263 - admitting total income under the heads income from house property and income from business - CIT-A directing the AO to recompute the income without giving any opportunity of being heard to the assessee to explain that the AO has already initiated enquiries in respect of purchase of the property and passed assessment order u/s 143(3) - HELD THAT - It is an admitted fact that the CIT has not given sufficient opportunities to the assessee to explain and substantiate the case of the assessee. Therefore, we are of the firm view that the assessee should be given an opportunity to explain his case, in order to meet the principles of natural justice. We therefore, remit the matter back to the file of the Ld.Pr.CIT to give one more opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purpose.

Summary

Issues:
Condonation of Delay, Jurisdiction under Section 263 of the Income Tax Act, 1961

Condonation of Delay:
The appeal was filed with a delay of 175 days, seeking condonation based on the Hon'ble Supreme Court's order excluding the period from 15.03.2020 to 28.02.2022 for calculating delays in filing appeals. The ITAT Visakhapatnam, following the Supreme Court's order, condoned the delay and admitted the appeal for hearing.

Jurisdiction under Section 263 of the Income Tax Act, 1961:
The Principal Commissioner of Income Tax (Pr.CIT) directed the Assessing Officer (AO) to treat the difference between the stamp duty value and purchase consideration of a property as income from other sources u/s 56(2)(vi)(b) of the Act for A.Y. 2016-17. The assessee appealed, arguing that the assessment order was not erroneous or prejudicial to revenue. The ITAT noted that the Pr.CIT did not provide sufficient opportunity for the assessee to explain, remitting the matter back to the Pr.CIT for another hearing to ensure principles of natural justice were met.

This judgment by the ITAT Visakhapatnam addressed two main issues. Firstly, regarding the Condonation of Delay, the appeal was filed late, but the ITAT accepted the delay based on the Supreme Court's order excluding certain periods for calculating delays in filing appeals. Secondly, on the Jurisdiction under Section 263 of the Income Tax Act, the Pr.CIT's direction to treat the property value difference as income was challenged by the assessee, arguing the assessment was not erroneous. The ITAT found the assessee was not given adequate opportunity to present their case, remanding the matter back to the Pr.CIT for a fair hearing.