RAJESH BUILDERS,MUMBAI vs. PR CIT 27, MUMBAI

This is an appeal preferred by the assessee against the order of the Ld. Principal Commissioner of Income Tax-27, Mumbai dated 25.01.2019 for assessment year 2015-16 passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). At the outset, the Ld. AR of the assessee brought to our notice 2. that the Ld. PCIT has passed an ex-parte order without giving proper opportunity to the assessee. We note that though the Ld. PCIT had issued show cause notice dated 23.10.2018 and has adjourned the matter at the request of the assessee for 14.11.2018 and thereafter on 27.11.2018, the assessee could not appear and submit the details asked for by the Ld. PCIT, since the evidence relating to Rs.55,16,548/- pertains to transactions which happened in the year 1986-87 (supplementary deed). However, the Ld. PCIT after having granted 2 A.Y. 2015-16 Rajesh Builders three (3) adjournments, passed the impugned revisional order dated 25.01.2019. According to the Ld. AR, the Ld. PCIT had time till 31.03.2019 (time barring date) and even though the assessee pleaded to give one more opportunity to the Ld. PCIT to bring evidence on record, he did not heed to the request of assessee. According to the Ld. AR, given one more opportunity, the assessee would appear before the Ld. PCIT with all documents to substantiate the query raised by the Ld. PCIT. So he pleaded to restore the mater back to Ld. PCIT. 3. Per contra, the Ld. CIT-DR opposed the submission of the Ld. AR and submitted that the assessee has been granted sufficient opportunity to produce the material, which he failed to do. Therefore, a second innings should not be given to assessee. So the impugned action of the Ld. PCIT should not be disturbed. 4. Having heard both the parties and after perusal of the records, we note that the impugned order has been passed on 25.01.2019 and the Ld. PCIT had given three (3) opportunities to the assessee to submit the documents to substantiate the query raised by him (show cause notice dated 23.10.2018). However, it has been brought to our notice that there were two queries raised by the Ld. PCIT one regarding Rs.3.69 crores and another regarding Rs.55.16 Lakhs. According to the Ld. AR, regarding the query related to 55.16 Lakhs, the assessee had to trace out the supplementary deed executed in the year 1986-87. Therefore, he sought more time/adjournment which according to us was a reasonable cause for seeking adjournment. It was also brought to our notice that the Ld. PCIT had time till 31.03.2019 which was the time barring date; but the Ld. PCIT without 3 A.Y. 2015-16 Rajesh Builders giving any more opportunity to the assessee has hastily passed the impugned order in January, 2019. This action of Ld. PCIT, in the facts and circumstances as noted (supra) cannot be countenanced. In the year 2018, when the Ld. PCIT asked assessee a query regarding a supplementary deed executed in the year 1986-87 (ie. 30 years back), reasonable time should have been granted to the assessee. The query was raised by issue of show cause notice 23.10.2018 and the time barring date was undisputedly on 31.03.2019, the Ld. PCIT rather than passing the exparte order on 25.01.2019 could have given reasonable opportunity to assessee. Therefore, taking into consideration the overall facts and circumstances and for the interest of justice and fair play, we set aside the impugned order of the Ld. PCIT and restore the matter back to the file of the Ld. PCIT and direct him to give proper opportunity to the assessee, and thereafter, pass the order for AY. 2015-16 in accordance to law u/s 263 of the Act. And the assessee is directed to be diligent and file written submissions/ supporting documents and appear before the Ld. PCIT and the Ld. PCIT to decide in accordance to law.