ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED,HYDERABAD vs. INCOME TAX OFFICER, WARD-1(2), HYDERABAD

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ITA 452/HYD/2020Status: DisposedITAT Hyderabad27 January 2022AY 2015-166 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal. While not providing an opportunity to be heard is not a ground to quash the order, the Tribunal set aside the Pr.CIT's order to ensure principles of natural justice were met.

What were the facts?

The assessee filed a revised return claiming higher depreciation. The Principal CIT initiated proceedings under Section 263, finding the assessment order erroneous and prejudicial to revenue. The assessee appealed, claiming no proper opportunity of being heard was given.

What were the issues?

Whether the Pr.CIT passed the order under Section 263 without affording proper opportunity of hearing to the assessee. Whether the assessment order was erroneous and prejudicial to the interest of revenue.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘ A ‘ BENCH, HYDERABAD.

Before: SHRI A. MOHAN ALANKAMONY & SHRI DUVVURU RL REDDY

For Appellant: Shri B. Satyanarayana Moorthy, C. A

O R D E R Per Shri Duvvuru RL Reddy, J.M. : This assessee’s appeal for Asst. Year 2015-16 arises from the order of Pr. Commissioner of Income Tax/CIT – 1, Hyderabad dt.19.05.2020 passed in proceedings under Section 263 of Income Tax Act, 1961 (‘the Act’).

2.

We notice at the outset that assessee's instant appeal suffers from 37 days delay in filing. Learned counsel submitted that due to the outbreak of pandemic covid 19 unable to get the documents from the department which caused the impugned delay in filing of the instant appeal. Case law Collector Land Acquisition Vs. Mst.

Katiji & Ors, 1987 AIR 1353 (SC) and University of Delhi Vs. Union of India, Civil Appeal No.9488 & 9489/2019 dated 17th Dec., 2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way for the cause of substantial justice.

We accordingly hold that assessee's impugned delay of thirty seven days is neither intentional nor deliberate but due to the circumstances beyond its control. The same stands condoned. Case is now taken up for adjudication on merits therefore.

3.

The main grievance of the assessee is that the Pr.CIT/CIT-1, Hyderabad Dt.19.05.2020 passed order under section 263 of the Act without giving proper opportunity to substantiate its case.

4.

Brief facts are that the assessee is a company filed its Return of Income for the A.Y. 2015-16 on 29.09.2015 declaring a taxable

Rs.31,27,25,520 claiming a depreciation of Rs.17,11,41,739. Subsequently, the return was revised by claiming higher depreciation of Rs.84,08,95,046. The case was selected for scrutiny under section 143(3) of the Act and assessment was completed on 30.12.2017 determining the taxable income of Rs.1,07,29,000 under normal provisions and Rs.40,78,61,402 under section 115JB of the Act by making disallowance u/s.14A relating to prior period expenditure and addition of exempt income.

5.

The case was selected for scrutiny to verify whether the depreciation claimed by the assessee was correct or not. On perusal of the assessment record, the Pr. CIT/CIT-1 came to a conclusion that the assessment order dt.30.12.2017 is erroneous and prejudicial to the interest of revenue. Therefore the Pr. CIT / CIT-1 set aside the assessment order passed u/s.143(3) of the Act Dt.30.12.2017. The Pr.CIT / CIT-1 directed the A.O. to redo the assessment after examining the issue discussed in the Pr.CIT / CIT- 1 order and after allowing an opportunity of being heard to the assessee. Aggrieved the assessee filed an appeal before the Tribunal.

6.

At the outset, the learned counsel for the assessee submitted that the Pr.CIT/CIT-1, Hyderabad passed the order u/s.263 Dt.19.05.2020 without giving an opportunity to the assessee of being heard. He further submitted that the assessee has not received any notice from the Pr.CIT/CIT-1, Hyderabad. He prayed that the matter may be remitted back to the file of Pr.CIT/CIT-1, Hyderabad for examining all the issues afresh.

7.

On the other hand, the learned Department Representative submitted that Pr.CIT/CIT-1 has afforded an opportunity but there is no response from the assessee. He prayed that the order of Pr.CIT/CIT-1 be upheld.

8.

We have heard both the sides and perused the material on record. There is no evidence before us that a notice was served on the assessee. Therefore, we find force in the argument of the assessee, however, not providing an opportunity of being heard is not a valid ground to quash the order passed u/s.263 of the Act.

However, in order to meet the principles of natural justice, we set aside the order passed by the Pr.CIT/CIT-1, Hyderabad and remit

Pr. CIT / CIT-1 to afford one more opportunity of being heard to the assessee and pass a speaking order as per law. The assessee is directed to co-operate with the Pr.CIT/CIT-1, Hyderabad for early disposal of the case.

Since we set aside the order of Pr.CIT/CIT-1 and remitting all the issues to Pr.CIT/CIT-1, we are not going into the merits of the case.

9.

In the result, the appeal of the assessee is allowed in above terms. Order pronounced in the open court on 27th Jan.,2022.

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