SONALAC PAINTS AND COATINGS LIMITED,CHANDIGARH vs. DCIT/ACIT CIRCLE 1(1) CHANDIGARH, CHANDIGARH

आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ “बी” , च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE �ी लिलत कुमार, �ाियक सद� एवं �ी िवजय वमा� , लेखा सद� BEFORE: SHRI. LALIET KUMAR, JM & SHRI. VIJAY VARMA, AM आयकर अपील सं./ ITA Nos. 651 & 650 /Chd/ 2026 िनधा�रण वष� / Assessment Year : 2018-19 & 2019-20 Sonalac Paints and Coatings बनाम The DCIT / ACIT Limited Circle 1(1), Chandigarh Plot No. 768, Industrial Area Phase II, Chandigarh-160002 �ायी लेखा सं./PAN NO: AAICS4995D अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Shri Parikshit Aggarwal, C.A राज� की ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 05/08/2026 उदघोषणा की तारीख/Date of Pronouncement : 11/08/2026 आदेश/Order PER VIJAY VARMA, A.M: The appellant has filed both of the aforementioned appeals against the respective orders passed by the Ld. CIT(A)/NFAC, Delhi, dated 20/12/2021 and 19/12/2021. 2. At the outset, the Registry pointed out that there is a delay of 416 days in filing both the above appeals. The Ld. AR prayed for condonation of delay for which the condonation application have been filed which is placed on record. 3. The Ld. DR opposed the applications for condonation of delay. 4. We have heard both the parties and request for seeking condonation of delay. Upon consideration of the facts and circumstances of the case, and the reasons explained therein, we are satisfied that the appellant was prevented by sufficient and reasonable cause from filing the appeal within the prescribed period of limitation. Accordingly, the delay of 416 days in filing both the above appeals are condoned, and the appeals are admitted for adjudication.

19/12/2021 vide the present order under appeal dt. 20/11/2024 and withdrew the relief of Rs. 5,93,331/- granted earlier, thereby confirming the intimation under section 143(1). 9. During the course of hearing the Ld. AR submitted that the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra) had came after the date of order proposed to be rectified. He also submitted that no opportunity of hearing was given by the Ld. CIT(A) before passing the order under appeal. 10. On the other hand the Ld. DR submitted that the order of Hon’ble Supreme Court on any issue explains the position of law as it always existed, since the introduction of the corresponding provisions in the relevant statute which cannot be considered equivalent to an amendment where the question of prospective or retrospective application arises. In view of the same the Ld. DR contended that opportunity of hearing was not required, as it was an apparent mistake of law. 11. It is noticed that the Ld. CIT(A) rectified its order under section 154 with in the statutory time limit provided under the Act. Section 154(1)(a) allows any Income Tax Authority referred to in Section 116 to amend any order passed it under the provisions of the Act. Section 116 of the Act includes Commissioner of Appeal in the definition of Income Tax Authority. However, Section 154(3) requires that any amendment which has effect of enhancing the assessment or increasing the liability of the assessee cannot be passed without giving notice to the assessee of its intention to do so and giving the assessee reasonable opportunity of being heard. 12. We have heard the rival submissions of the parties and carefully perused the material available on record. The grievance of the assessee is that while exercising the powers of rectification under section 250/154 of the Income-tax Act, the learned CIT(A) passed the impugned rectification order without issuing any show-cause notice or affording an opportunity of hearing to the assessee. According to the learned AR, the order originally passed by

the learned CIT(A) was in consonance with the law prevailing at the relevant point of time, as laid down by the jurisdictional Hon'ble Punjab & Haryana High Court, and the subsequent judgment of the Hon'ble Supreme Court could not, by itself, constitute a ground for invoking the rectification jurisdiction without first putting the assessee to notice. On the other hand, the learned DR submitted that the law declared by the Hon'ble Supreme Court under Article 141 of the Constitution is binding on all courts and authorities, and once such declaration of law is made, any order contrary thereto constitutes a mistake apparent from the record, for which no separate show- cause notice is necessary. 13. At this stage, we do not consider it appropriate to enter into the larger controversy as to whether the subsequent declaration of law by the Hon'ble Supreme Court would ipso facto constitute a mistake apparent from the record amenable to rectification under the Act, or whether such an exercise could be undertaken without issuing a prior notice to the assessee. Since the impugned order is liable to be restored on the limited issue of compliance with the principles of natural justice, we consciously refrain from expressing any opinion on the merits of the rival legal contentions lest it may prejudice either party in the fresh proceedings. 14. In our considered opinion, no prejudice would have been caused to the Revenue if an opportunity of hearing had been afforded to the assessee before passing the rectification order. On the contrary, issuance of a show- cause notice and grant of an effective opportunity of hearing would have ensured substantial compliance with the principles of natural justice and would have put the controversy to rest in a fair and transparent manner. Even where the authority is of the view that a binding judgment of the Hon'ble Supreme Court necessitates rectification, compliance with the audi alteram partem rule ordinarily fortifies the decision-making process and avoids unnecessary litigation. 15. Accordingly, in the peculiar facts and circumstances of the case, and without expressing any opinion on the merits of the controversy relating to the

applicability of the judgment of the Hon'ble Supreme Court or the scope of rectification under the Act, we set aside the impugned rectification order and restore the matter to the file of the learned CIT(A). The learned CIT(A) shall issue an appropriate show-cause notice to the assessee, afford a reasonable opportunity of hearing, consider all the submissions and legal contentions that may be raised by the parties, and thereafter pass a fresh speaking order in accordance with law. 16. Since we have adjudicated the issues involved in the lead appeal in ITA No.651/Chd/2026 in the foregoing paragraphs, and the facts, issues involved, grounds raised and the reasons recorded by the Ld. CIT(A) in the connected appeal bearing ITA No.650/Chd/2026 are identical and arise out of the same set of facts and circumstances, our findings and conclusions rendered in the lead appeal shall apply mutatis mutandis to the present appeal as well. Accordingly this appeal is also allowed for statistical purposes. 17. In the result, both the above appeals filed by the Appellant are allowed for statistical purposes. Order pronounced on 11/08/2026

Sd/- Sd/- लिलत कुमार िवजय वमा� (LALIET KUMAR) (VIJAY VARMA) �ाियक सद� /JUDICIAL MEMBER लेखा सद�/ ACCOUNTANT MEMBER AG आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent 3. आयकर आयु�/ CIT 4. आयकर आयु� (अपील)/ The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR-9A CHANDIGARH