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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI G.D. AGRAWAL & SHRI MAHAVIR SINGH
PER BENCH :
This appeal by the assessee is arising out of the revision order of Principal Commissioner of Income Tax-2, Nagpur under Section 263 of the Income-tax Act, 1961 (hereinafter ‘the Act’) dated 30th March, 2016. Assessment was framed by the ITO, Ward-3(1), Nagpur under Section 143(3) of the Act for assessment year 2008-09 vide his order dated 27th January, 2014.
The only issue in this appeal of the assessee is against the revision order passed by the CIT u/s 263 of the Act as illegal, invalid and bad in law for the reason that the CIT erred in not giving any opportunity to the assessee before passing his order. For this, assessee has raised following four grounds :-
2 ITA-360/Nag/2016
“1. The order passed on 30.03.2016 u/s 263 of the Income Tax Act, 1961 by the Hon’ble CIT(2), Nagpur is illegal, invalid and bad in law.
The Hon’ble CIT(2), Nagpur erred in invoking the provision of section 263 of the Income Tax Act, 1961 on the ground that the assessment order was deficient in certain respect and thereby setting aside the order passed by the Assessing Officer and directing him to pass a fresh order.
The Hon’ble CIT(2), Nagpur also erred in not giving a reasonable opportunity of being heard to the assessee and passed order u/s section 263 of the Income Tax Act, 1961, which is prejudicial to the interest of the assessee and also against the principle of natural justice.
The appellant prays that order passed under section 263 of the Act to be struck down as null and void-ab-initio.”
Briefly stated, facts are that the assessee is a retired person from Ordnance Factory, Nagpur and was drawing pension income. Learned counsel for the assessee drew our attention to the first paragraph of the order that notice u/s 263 of the Act was issued on 30th March, 2016 and fixing the same for 30th March, 2016 and thereafter passing the order also on 30th March, 2016. The first page of the revision order of the CIT clearly reveals these dates. In view of this, learned counsel for the assessee stated that once there is no opportunity given by the CIT, the order passed by any authority is invalid and void ab-initio. When this was confronted to the learned Senior DR, he could not comment anything on this.
After hearing rival contentions and going through the facts and circumstances of the case, it is admitted position that notice u/s 263 was issued only on 30th March, 2016 and was served on the same date calling for his explanation as is evident from the revision order. Even the revision order was passed by the CIT on that very date i.e., 30th
3 ITA-360/Nag/2016 March, 2016. Hon'ble Supreme Court in the case of CIT Vs. Ramendra Nath Ghosh – (1971) 82 ITR 888 (SC) has clearly held that an order under Section 263 of the Act cannot validly be made unless it is proved that a show cause notice was properly served and reasonable opportunity of being heard was afforded to the assessee to have his say. Hon'ble Supreme Court held as under :-
“Held, affirming the decision of the High Court, on the facts, that the service of the notices was not in accordance with the law and therefore it could not be said that the assessees had been given a proper opportunity to put forward their case as required by section 33B of the Income-tax Act.”
Respectfully following the aforesaid decision of Hon'ble Supreme Court in the case of Ramendra Nath Ghosh(Supra), we quash the revision proceedings as the same are in violation of principles of natural justice.
In the result, the appeal of the assessee is allowed. Decision pronounced in the open Court on 05.03.2018.
Sd/- Sd/- (G.D. AGRAWAL) (MAHAVIR SINGH) PRESIDENT JUDICIAL MEMBER
Dated : 05.03.2018 VK.
Copy of the order forwarded to :
The Appellant 2. The Respondent 3. Concerned CIT 4. The CIT(A) 5. D.R. Assistant Registrar