VENKATESH RAJGOPAL,CHENNAI vs. ACIT COMPANY CIRCLE 1(3), CHENNAI

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ITA 2167/CHNY/2018Status: DisposedITAT Chennai22 December 2021AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the Assessing Officer was bound to issue a show-cause notice before passing a rectification order under section 154. Since no notice was issued and the CIT(A) failed to consider this, the matter was remitted back.

What were the facts?

The assessee's appeal was delayed by ten days. The Assessing Officer passed a rectification order under section 154 of the Income Tax Act, raising a demand without issuing a show-cause notice. The CIT(A) confirmed the rectification order without considering this ground.

What were the issues?

Whether a rectification order under Section 154 is valid if passed without issuing a show-cause notice to the assessee. Whether the CIT(A) erred by confirming the rectification order without considering the lack of notice.

Which sections of the Income-tax Act were involved?

Section 154,Section 143(1)

AI-generated summary — verify with the full judgment below

Before: Shri V. Durga Rao & Shri Manoj Kumar Aggarwal

Hearing: 15.12.2021Pronounced: 22.12.2021

O R D E R

PER V. DURGA RAO, JUDICIAL MEMBER:

1.

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 4, Chennai, dated 27.04.2018 relevant to the assessment year 2009-10.

The appeal filed by the assessee is delayed by ten days, for 2. which, the assessee has filed a petition for condonation of the delay in support of an affidavit, to which; the ld. DR has not raised any serious objection. Consequently, since the assessee was prevented by sufficient cause, the delay of ten days in filing of the appeal stands condoned and the appeal is admitted for adjudication.

3. When the appeal was taken up for hearing, the ld. Counsel for the assessee has submitted that the Assessing Officer, by order dated 25.10.2011 passed rectification order under section 154 of the Income Tax Act, 1961 [“Act” in short] by raising demand of ₹.3,42,060/- against the order under section 143(1) of the Act. It was further submission that the assessee carried the matter in appeal before the ld. CIT(A) and submitted before him that as per section 154(3) of the Act, the Assessing Officer has to issue a notice before passing the order. It was further submission that no such notice has been issued by the Assessing Officer. The ld. Counsel for the assessee has further submitted that without considering the ground raised by the assessee, the ld. CIT(A) simply confirmed the rectification order. Thus, the ld. Counsel for the assessee prayed that an opportunity should be given to the assessee before the Assessing Officer to substantiate his case.

3.

On the other hand, the ld. DR fairly accepted that the issue may be remitted back to the Assessing Officer.

4.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. We find that under section 154(3) of the Act, the Assessing Officer is bound to issue show- cause notice before passing rectification order under section 154 of the Act. However, in this case, no such notice has been issued by the Assessing Officer. Before the ld. CIT(A), the assessee has raised a ground that no notice has been issued. However, without considering the ground raised by the assessee, the ld. CIT(A) concluded his order on merits. In our opinion, an opportunity should have been given to the assessee before passing order under section 154 of the Act. In view of the above, we set aside the order passed by the ld. CIT(A) and remit the matter back to the file of the Assessing Officer to adjudicate the issue afresh after giving notice to the assessee and considering his reply thereon.

5.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced on the 22nd December, 2021 at Chennai.

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