9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 213 - AT - Income TaxRevision u/s 263 - Weighted deduction u/s 35(2AB) - assessee has argued that no opportunity of being heard was given to the assessee, therefore, there is a violation of the principles of natural justice, hence, the order is not liable to be sustainable in the eyes of law - HELD THAT - On appraisal of the order dated 22.03.2021 in question, we noticed that the PCIT has issued the notice to the assessee on 16.03.2021 and passed the order in a very short interval on 22.03.2021. However, it is specifically mentioned in the order that the assessee failed to reply to the notice. There is no iota of evidence on record to which it can be assumed that the notice dated 16.03.2021 was ever served upon the assessee. No acknowledgement of service of notice is on record. After the issuance of notice, the order u/s 263 of the Act passed within the period of seven day s which is in very short interval. Nothing came on record that the sufficient opportunity was given to the assessee. However, the order in question dated 22.03.2021 is also non speaking on account of service of notice. Observing the violation of principles of natural justice by not providing the reasonable opportunity of being heard to the assessee, we are of the view that the order in question is not liable to be sustainable in the eyes of law, therefore, we set aside the same. Accordingly, the present appeal is hereby allowed.
Issues:
1. Invocation of provisions u/s 263 of the Income Tax Act, 1961 by the Principal Commissioner of Income Tax. 2. Denial of deduction u/s 35(2AB) by the assessing officer. 3. Violation of principles of natural justice in passing the order u/s 263. Analysis: Issue 1: The appeals were filed against the orders passed by the Principal Commissioner of Income Tax invoking provisions u/s 263 of the Income Tax Act, 1961. The appellant contended that the order was passed without granting sufficient time for a response, denying the opportunity to be heard. The appellant argued that the assessing officer had duly examined the deduction claimed u/s 35(2AB), and thus, the invocation of sec. 263 was erroneous. The appellant also challenged the invocation of sec. 263 based on the failure to furnish prescribed forms electronically, stating that the conditions were not applicable for the relevant year. Issue 2: The assessing officer disallowed the deduction claimed u/s 35(2AB) as the assessee did not fulfill all the conditions required for the claim. The amendment in the IT Rules mandated certain forms to be submitted for claiming the deduction, which the assessee failed to comply with. Consequently, the AO disallowed a proportionate claim and added it to the total income of the assessee. The Tribunal found that the AO's assessment order was erroneous and prejudicial to the revenue's interests, leading to the invocation of sec. 263. Issue 3: The Tribunal observed a violation of principles of natural justice in the proceedings under sec. 263. The order passed by the Principal Commissioner of Income Tax lacked evidence of serving notice to the assessee and did not provide a reasonable opportunity to be heard. As a result, the Tribunal held that the order was unsustainable in the eyes of the law due to the violation of natural justice principles. Therefore, the order u/s 263 was set aside, and the appeals of the assessee were allowed. In conclusion, the Tribunal allowed the appeals of the assessee, highlighting the importance of adherence to procedural formalities, principles of natural justice, and proper examination of deductions under the Income Tax Act, 1961.
|
