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Facts
The assessee company filed its return for AY 2015-16 declaring a loss. The AO passed an assessment order. Subsequently, the Ld.PCIT issued a show cause notice under Section 263 for revision, treating it as the final opportunity. The assessee requested an adjournment, which was ignored, and an ex-parte order was passed.
Held
The Tribunal held that the Ld.PCIT violated principles of natural justice by ignoring the assessee's request for adjournment and passing an ex-parte order without proper opportunity to respond. The revisional action was restored to the file of the Ld.PCIT.
Key Issues
Whether the Ld.PCIT violated natural justice by passing an ex-parte revisional order without granting the assessee adequate opportunity to present its case.
Sections Cited
143(3), 263
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee company against the order of the Learned Principal Commissioner of Income Tax, (hereinafter referred to as “the Ld.PCIT”), Coimbatore-1, dated 30.03.2021 for the Assessment Year (hereinafter referred to as "AY”) 2015-16.
At the outset, it is noted that there is a delay of ‘24’ days in filing of the appeal. The Ld. Counsel for the assessee has explained the cause for the delay which we notice to be excusable, therefore the delay in filing of appeal by ‘24’ days is excused; and proceed to hear the appeal on merits.
At the outset, it is noted that Ground No.1 of the assessee is against the action of the Ld.PCIT passing the impugned ex parte order qua assessee by ignoring the assessee’s application for adjournment.
The brief facts are that the assessee company had filed its return of income (RoI) for AY 2015-16 on 29.09.2015 declaring loss of (-)
₹41,64,200/- which RoI was selected for scrutiny and the AO passed the assessment order u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act”) on 12.12.2017 assessing loss of (-)₹23,14,971/-.
Later on, the Ld.PCIT conveyed his desire to invoke revisional jurisdiction u/s.263 of the Act by issuing notice dated 18.03.2021, and show caused the assessee ‘as to why’ he shouldn’t exercise his jurisdiction u/s.263 of the Act for the reasons given therein his ibid notice. According to the Ld.PCIT, in the show cause notice dated 18.03.2021 itself the assessee was put to notice that this was the last & final opportunity for the assessee to provid/furnish the submissions; and finding that there was no response from the assessee, he passed the impugned order setting aside the assessment order passed u/s.143(3) of the Act dated 12.12.2017.
Aggrieved by the aforesaid action of the Ld.PCIT, the assessee is before this Tribunal.
We have heard both the parties and perused the material available on record. We note that the Ld.PCIT had issued show cause notice on 18.03.2021 and put the assessee on notice to treat the same as the last opportunity to file reply, and finding no response from the assessee passed the impugned order within ten (10) days i.e. on 30.03.2021. The main grievance of the assessee is that despite it sought an adjournment, the Ld.PCIT ignored the same and has passed the ex parte order qua assessee, which is erroneous being violative of natural justice. From a reading of the impugned order, we note that the Ld.PCIT has only issued one notice dated 18.03.2021 expressing his desire to invoke his jurisdiction u/s.263 of the Act in respect of the assessment order passed u/s.143(3) of the Act on 12.12.2017, and in that notice, gave an ultimatum to the assessee to treat the said show cause notice as the last opportunity to respond. And the assessee pleaded before the Ld.PCIT that the assessment order under revision was for AY 2015-16 and the AO had passed order way back on 12.12.2017, therefore assessee sought a week’s time to prepare to respond to the notice. But, the Ld.PCIT is noted to have passed the impugned order ignoring the request for adjournment and passed the impugned order within ‘10’ days. Hence, we are of the view that assessee didn’t get proper opportunity to reply to the Ld.PCIT. Hence, there is per se violation of natural justice. Having said so, we restore the revisional action back to the file of the Ld.PCIT for de novo action from the point of violation of natural justice. Meaning, the assessee is allowed to file its reply to the show cause notice issued by the Ld.PCIT wherein the assessee is at liberty to raise all the contentions including legal issues as well as issues on merits against the action of the Ld.PCIT invoking jurisdiction u/s.263 of the Act; and the Ld.PCIT after hearing the assessee to pass order in accordance to law.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 28th day of November, 2025, in Chennai.