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TMI Blog2024 (12) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice. Even the notice allegedly Dtd.05.03.24 was actually prepared on 15.03.24 and by interpolating the same as 05.03.24, it has been delivered to postal authorities on 16.03.24. 3. That the impugned order u/s. 263 Dtd.29.03.24 has been passed without carefully going through the relevant asstt. order, without application of mind and on wrong facts, as is apparent from the fact that Ld. CIT(E) has specifically noted in order u/s. 263 that the A.O. had allowed the benefit of exemption u/s. 11 & 12 to the assessee and consequently CIT(E) examined all the issues and also issued his directions assuming that the assessee has been allowed exemption u/s. 11 & 12, although, correctly, the exemption claimed u/s. 11 & 12 was disallowed by the A.O. in the relevant asstt. order Dtd.16.08.21 which position still subsisted as on 29.03.24, which is the date of order u/s. 263, hence the impugned order is unsustainable in law. 4. That under the facts and circumstances, Ld. CIT(E) grossly erred in law and on merits in forming an opinion that alleged loan of Rs. 1,20,90,501/- should have been disallowed and added back to the total income since advanced to persons other than specified persons and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvive for further examination and directions u/s. 263. 7. That under the facts and circumstances Ld. CIT(E), erred in law and on merits in forming opinion that the depreciation of Rs. 15,63,269/- for the assets purchased in earlier years is not allowable and also in holding that the A.O. has failed to make enquiries on this issue and consequently in setting aside the whole asstt. denovo to A.:. 7.1 That in view of the fact that exemption u/s. 11 & 12 was not allowed by the A.O. in relevant asstt. order, this issue did not survive for further examination and directions u/s. 263. 8. That without prejudice, even on assuming (without admitting) that the issues covered in order u/s. 263 are eligible for invoking Sec.263, the whole asstt. could not had been set aside to be reframed denovo. 9. That without prejudice, the manually signed SCN Dtd.05.03.24 is without DIN and also do not comply with the various requirements of CBDT circular No.19/2019 Dtd.14.08.19, which fatal defect renders the impugned SCN as nonest and illegal." 3. Brief facts of the case are that, the Assessee is registered under 12AA of Income Tax Act, 1961 ('Act' for short) and also u/s 80G (5)(vi) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter for 14.03.24 has been served by two modes, however, both times service is after 14.03.24. For above contention, following factual facts are relevant:- Date Event P/B Pg No. 05.03.2024 Date of preparing SCN u/s. 263 (manual) 1-2 08.03.2024 Intimation of DIN generated for preparing SCN u/s. 263 Dtd.05.03.24 5 14.03.2024 Date of hearing fixed as per SCN Dtd.05.03.24 2 16.03.2024 Handing over SCN u/s. 263 to postal authorities for speed post 3,3A para-6 of PCIT 18.03.2024 Service of SCN u/s. 263 Dtd.05.03.24 by speed post 3 29.03.2024 Date of passing Order u/s. 263 and uploading the same on ITBA and simultaneously also sent on email of the assessee. 6 30.03.2024 SCN and intimation of DIN Dtd.08.03.24 uploaded on ITBA and simultaneously sent on email of assessee. 4 Only single SCN u/s. 263 Dtd.05.03.24 issued in this case. It has been served through two different modes of service. 1st mode - through speed post SCN u/s. 263 Dtd.05.03.24. Date of hearing fixed 14.03.24. Delivered to postal authorities for speed post 16.03.24. (3, 3-A, Para-6 of PCIT) (3) Service on assessee on 18.03.24. Thus, the SCN fixing the matter for 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 could not be sustained. Para-18 "Further, the notice under section 263 dated 27-3-2022 was prepared and uploaded/sent on 28-3-2022 and the same was received on the date fixed, i.e., 29-3-2022 and the impugned order dated 31-3-2022 has been passed in gross violation of the principles of natural justice. [Para 18]. Para-19 "Since there is an apparent violation of the principles of natural justice, as no opportunity was given to the petitioner for defending or presenting its case, the impugned order cannot be sustained in the eyes of law. [para 19]" 6. Per contra, the Ld. Departmental Representative submitted the para-wise reply based on the information collected from the A.O. which reads as under:- "1. That a notice dated 05.03.2024 u/s 263 of the Income Tax Act, 1961 was uploaded on ITBA on 05.03.2024 itself and as per ITBA data, the same was shared with E-proceeding on 08.03.2024. It is therefore clear that the notice was served upon the assessee on the same date i.e. 08.03.2024. Further, as per the prevalent practice, it was notified by the system on 08.03.2024 to the assessee on the e- mail addresses available in the data. A copy of case history as available on ITBA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to appear before the CIT(E), which ultimately resulted in passing the ex-parte order by the CIT(E). Further submitted that the notice sent by speed post has been served on the Assessee before passing of the final order, therefore, the Ld. Departmental Representative sought for dismissal of the Appeal filed by the Assessee. 8. We have heard both the parties and perused the material available on record. In the present case, the assessment of the Assessee for Assessment Year 2018-19 was completed u/s 143(3) r.w. Section 144B of the Act on 16/08/2021 by the A.O. at the taxable income of Rs. 2,67,63,316/- against NIL returned income filed by the Assessee. Subsequently, while exercising power conferred u/s 263 of the Act, the Ld. CIT(E) called for the records from the A.O. and was of the opinion that some 'discrepancies' were noticed as the A.O. has failed to make requisite verification and enquiries on certain issue involved in the assessment. The Ld. CIT(E) by placing the Assessee ex-parte passed the order on 29/03/2024 by setting aside the assessment order dated 16.08.2021and directed for making de-novo assessment after affording reasonable opportunity being heard to the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t served well within the date of hearing fixed by the Ld. CIT(E). 10. In an identical circumstance, while quashing the order passed u/s 263 of the Act, the Hon'ble High Court of Allahabad in the case of M L Chains Vs. Pr. CIT (2023) 154 Taxman.com 508(Allahabad) held as under:- "10. After hearing the learned counsel for the parties, the Court has perused the record. 11. Admittedly, the notice under section 263 of the Income-tax Act dated 27-3-2022 was prepared and the same was got approved for uploading on the portal. The Office of the respondent sent the information to the petitioner on its portal on 28-3-2022. The petitioner came to know about the notice on 29-3-2022 in the morning and immediately thereafter, moved an adjournment application on 29-3- 2022 itself. On the adjournment application, e-proceeding response acknowledgment no. 480299081300322 was generated (Annexure No. - 6 to the writ petition). The fact that the adjournment was moved has not been denied by the respondent. The order sheet of the proceedings under section 263 of the Income-tax Act have been filed. The copy of the computer generated order sheet has been brought on record as Annexure No. CA - 2 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, following finding has been recorded:- "5. The Assessee was issued Notice under section 263 on 27-3-2022, which was dully served. In response, the Assessee has submitted its reply. The same was duly examined. Based on examination of the submission of the Assessee, facts of the case, documentary evidences produced, past assessment orders and material information available, the reply of the Assessee has been found to be grossly unsatisfactory, not responding to the queries raised in the notice issued." 15. Perusal of paragraph no. 5 of the impugned order shows that the assessee has submitted its reply after due examination of the same and material on record, the impugned order has been passed. 16. From the perusal of the aforesaid paragraph nos. 4 & 5 of the impugned order, it clearly reveals that the same are self-contradictory. The respondent authority is trying to blow hot & cold at the same time. Whereas, in paragraph no. 4 of the impugned order, it has been mentioned that no reply has been submitted by the petitioner, to the contrary, in paragraph no. 5 of the impugned order, it has been mentioned that the assessee has submitted its reply. Neither in the impugned order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be served in giving opportunity to the Assessee of being heard at this stage on considering the provisions of Section 263 (2) of the Act which bars for any order being passed pursuant to the notice u/s 263 of the Act, after the expiry of two years from the end of Financial Year in which the order sought to be revised was passed. The relevant portion of the observation of the Hon'ble High Court of Delhi are as under: - "This Court has also examined the question as to whether an opportunity of hearing could now be afforded to the Appellant. However, Section 263(2) of the Act is a clear bar for any order being passed pursuant to a notice under Section 263 of the Act, after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. Thus, there is an outer limit in the statute under Section 263 which, in the present case, is 31st March, 2013. Since, no useful purpose will be served in giving an opportunity to the Appellant of being heard at this stage, this Court answers question No.1 in the negative i.e. in favour of the Assessee and against the Revenue." 12. In the present case, there is no legal and valid service of notice wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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