9911796707
TMI Blog2008 (2) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the assessee, without service of any notice to the assessee or his authorized person; order so passed under s. 263 is bad in law and against the principle of natural justice. 2. That all the issues mentioned in the aforesaid order under s. 263 were duly discussed, considered and examined by the AO during the penalty proceeding at the time of hearing and applied his mind then only he passed the penalty order under s. 271(1)(c), therefore the action of the CIT under s. 263 is against the law and void ab initio." 3. Both the parties were heard regarding the issues raised by the assessee in the appeal and its legal implication. 4. During the course of hearing, the learned Representative of the assessee has vehemently argued cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the merits, he pointed out that as can be seen from the order itself, the assessee has filed the return under s. 139 on 31st July, 2005 tendering income of Rs. 7,38,602. The additional income of Rs. 1.21 crores was not included in the return, This was taken by the CIT as concealment of income and also presumed as furnishing of inaccurate particulars. Further, it was observed by the CIT that notice under s. 148 of the IT Act dt. 6th Sept., 2006 was issued to the assessee and in response to that notice, the assessee has filed return on 13th Dec, 2006 disclosing income of Rs. 1,28,51,986 which is including the additional income offered during the search. This was taken wrongly; by the CIT as not voluntary but in response to notice issued unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the appeal of the assessee. 5. Contrary to this, the learned Departmental Representative vehemently argued supporting the order passed by the CIT and accordingly sought for upholding the same by dismissing the appeal of the assessee. 6. On careful consideration of the materials made available before the Tribunal and analyzing the same in the light of the rival submissions of both the parties, it is found that the undisputed facts relating to the issue are that the assessee has filed return under s. 139 for the assessment year under consideration on 31st July, 2005 showing return of income of Rs. 7,38,602 and the additional income of Rs. 1.21 crores offered by the assessee during the course of search conducted prior to the filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y material made out in the order about the personal service of the notice to the assessee, it can only be said that there is no opportunity given by the CIT, much less proper and reasonable opportunity given by the CIT to the assessee, to reply to the notice issued by him under s. 263. The provision contained in s. 263 categorically mentions that the CIT can pass the order under s. 263 after giving the assessee an opportunity of being heard and after taking or causing to be made such enquiry as he deems necessary. This provision clearly imposes an obligation on the part of the CIT while invoking the powers under s. 263 to give an opportunity to the assessee of hearing. As can be seen from the above undisputed facts, it is clear that notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him, in response to the notice issued under s. 148. During the course of the assessment proceedings it was categorically contended by the assessee before the AO that the return filed by the assessee in response to notice issued under s. 148 can be taken as revised return substituting the original return and this contention of the assessee was accepted by the AO and he ultimately passed the assessment order dt. 28th Dec, 2006 determining the taxable income at the hands of the assessee at Rs. 1,31,51,986 on addition of Rs. 3 lakhs to the income returned by the assessee. This order was accepted by the assessee, having filed no appeal before the appellate authority. While passing the assessment order, though it is mentioned at the fag end of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed. In support of this, the assessee has relied on the copy of the computation statement enclosed with the return filed in response to the notice under s. 148 placed at pp. 15 and 16 of the paper book filed before the Tribunal. In the 2nd page of the said computation, a note was written after completion of the computation of the tax payable by the assessee to the effect that there is a search under s. 132 conducted by the Department resulting in seizure of Rs. 53 lakhs and was in the possession of the Department and the same is requested to be considered as tax payable as per the return of income, since the tax is payable only because of surrendered income of Rs. 1.21 crores only and there remained only an amount of Rs. 1,77,044 balance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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