2023 (4) TMI 562 - AT - Income Tax

Revision u/s 263 - Mandation to provide proper opportunity of hearing - HELD THAT - The perusal of order of PCIT passed u/s. 263 reveals that PCIT has passed only on the basis of material on record. It order is a well settled principle of natural justice that sufficient opportunity of hearing should be offered to the parties and no parties should be condemned unheard. Assessee deserves proper opportunity of hearing .We set aside the impugned order of PCIT and restore the issue to the file of PCIT for re-adjudication of the issues. PCIT shall grant sufficient opportunity of hearing to the assessee. Assessee is also directed to promptly furnish the required details called for by the lower authorities. In view of our decision to restore the issue back to PCIT, we are not adjudicating on merits the grounds raised by the assessee. Thus the grounds of assessee are allowed for statistical purposes.

Summary

Issues:
The judgment involves the jurisdiction of the Principal Commissioner of Income Tax (PCIT) under section 263 of the Act and the adequacy of opportunity granted to the assessee for hearing.

Jurisdiction of PCIT under section 263:
The PCIT set aside the assessment order passed by the Assessing Officer (AO) under section 143(3) and directed fresh inquiries. The assessee appealed to the Tribunal, challenging the PCIT's order on various grounds. The assessee contended that the PCIT did not satisfy the statutory preconditions u/s 263, and the order was without jurisdiction. The PCIT's decision was based on the belief that the AO failed to conduct thorough investigations and accepted unsubstantiated claims. The Tribunal found that the PCIT's order lacked a proper opportunity for the assessee to be heard, a violation of natural justice. Consequently, the Tribunal set aside the PCIT's order and remanded the issue back to the PCIT for re-adjudication, emphasizing the importance of granting adequate hearing opportunities.

Adequacy of opportunity for hearing:
During the proceedings, the assessee raised concerns regarding the lack of adequate opportunity for a hearing granted by the PCIT. The Learned AR requested another chance for the assessee to present its case, ensuring full representation and submission of required details. The Tribunal acknowledged the importance of providing a fair hearing to all parties involved and decided to grant the assessee another opportunity to be heard. The Tribunal instructed the assessee to provide the necessary details promptly and directed the PCIT to re-examine the issues after ensuring a proper hearing for the assessee. The Tribunal refrained from delving into the merits of the grounds raised by the assessee, allowing the appeal solely for statistical purposes.

Conclusion:
The Tribunal allowed the appeal of the assessee for statistical purposes, emphasizing the significance of affording adequate hearing opportunities to parties involved in legal proceedings. The judgment highlighted the fundamental principle of natural justice, emphasizing the necessity of granting fair hearings and ensuring parties are not condemned unheard in legal proceedings.