2014 (5) TMI 666 - AT - Income Tax

Ex-parte order passed u/s 263 of the Act Opportunity of being heard not provided Held that - The assessee had submitted a letter seeking adjournment before the Commissioner the Commissioner without giving further opportunity, on the basis of show cause notice itself, has set aside the assessment order thus, the matter is required to be remitted back to the Commissioner and directed to provide due and effective opportunity of hearing to the assessee Decided in favour of Assessee.

Summary

Issues:
Challenging order under section 263 of the Income Tax Act, 1961 for assessment year 2007-08.

Analysis:
The appeal was filed by the assessee against the order dated 7th March 2012 passed under section 263 of the Income Tax Act, 1961. The main contention raised was that the order was passed ex-parte without providing a reasonable opportunity for hearing. The assessee had submitted a letter seeking adjournment, but no date for hearing was communicated. The Tribunal observed that the assessee's objection was valid, as the order was passed solely on the basis of the show cause notice without giving a proper opportunity for the assessee to present its case. Consequently, the Tribunal set aside the impugned order and directed the matter to be restored back to the file of the Commissioner for passing a fresh order after providing due and effective opportunity of hearing to the assessee.

The Tribunal noted that the assessment order under section 143(3) for the assessment year 2007-08 was set aside without proper opportunity for the assessee to present its case. The Tribunal emphasized the importance of providing a fair hearing to the assessee before passing such orders under section 263. The Tribunal found that in the interest of justice, the matter needed to be reconsidered by the Commissioner after giving the assessee a proper opportunity to present its submissions and objections. Therefore, the impugned order was set aside, and the matter was remanded back for fresh consideration.

The Tribunal allowed the appeal of the assessee for statistical purposes, indicating that the grounds raised by the assessee were valid concerning the lack of proper opportunity for hearing before passing the order under section 263. The Tribunal's decision highlighted the significance of providing a fair and adequate opportunity for the assessee to present its case before making decisions that could affect their interests. Consequently, the Tribunal directed the Commissioner to reconsider the matter after affording the assessee a proper opportunity for hearing and to pass a fresh order in accordance with the law and considering the submissions made by the assessee.