What did the Tribunal hold?

The Tribunal found that the assessee was not given a proper opportunity to contest the PCIT's revision proposal. Therefore, the matter was remanded back to the PCIT for fresh consideration.

The assessee's appeal was filed with a delay of 213 days, which was condoned. The Principal Commissioner of Income Tax (PCIT) initiated revision proceedings against an assessment order, alleging it was erroneous and prejudicial to revenue.

What were the issues?

Whether the PCIT was justified in revising the assessment order ex-parte without providing the assessee with a reasonable opportunity to be heard.

Mr Anil Jaganath Kedar, Solapur vs PCIT | ITAT Pune 2022

Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI INTURI RAMA RAO & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri Piyush Bafna & Akash Parakh

For Respondent: Shri Keyur Patel

आदेश / ORDER

PER S.S. VISWANETHRA RAVI, JM :

This appeal by the assessee against the order dated 31-03-2021 passed by the Principal Commissioner of Income Tax-4, Pune (“PCIT”) for assessment year 2016-17.

We find that this appeal was filed with a delay of 213 days. Upon hearing both the parties, we find that the delay of 213 days is saved by the decision of Hon’ble Supreme Court passed during National Lockdown imposed on account of pandemic Covid-19. Therefore, the delay of 213 days is condoned.

The assessee raised three grounds of appeal amongst which the only issue emanates for our consideration is as to whether the PCIT is justified in holding the assessment order dated 24-12-2018 passed u/s. 143(3) of the Act is erroneous and prejudicial to the interest of revenue ex-parte of the assessee.

4. We note that the PCIT on an examination of assessment record pertaining to A.Y. 2016-17, found the total receipts during F.Y. 2015-16 were at Rs.6,31,25,161/- which is inclusive of cash deposit of Rs.1,12,02,580/-. According to the PCT, the assessee cannot be treated as Kacha Adatia and books of accounts should have been audited. Further, he also observed that there was no supportive evidence proving 5 to 6% of commission received by the assessee. Basing on such finding, the PCIT initiated proposal to revise the assessment order passed u/s. 143(3) of the Act by giving show cause notice dated 10-02-2021. The said show cause notice was issued through ITBA revision portal but was bounced which is evident from para 3 of the impugned order. There was no representation on behalf of the assessee in terms of the proposal to revise the assessment order already concluded u/s. 143(3) of the Act. Further, it is established that in the absence of any clarification/submission on behalf of the assessee, the PCIT proceeded to pass ex-parte order revising the assessment order passed u/s. 143(3) of the Act with a direction to AO that the assessment order should be framed as per the provisions of law considering proper facts and necessary verification in the light of observations made in paras 4 and 5 of the impugned order. Therefore, it is clear from the record there was no opportunity for the assessee to contest the proposals stated to have been raised by the PCIT in 263 proceedings. Thus, we deem it proper to remand the issue to the file of PCIT for his fresh consideration. The PCIT shall pass order by affording reasonable opportunity of hearing to the assessee, in accordance with law. The assessee is liberty to file evidences, if any, in support of his claim. Thus, the grounds raised by the assessee are allowed for statistical purpose.

In the result, the appeal of assessee is allowed for statistical purpose.

Order pronounced in the open court on 21st November, 2022.

MR ANIL JAGANATH KEDAR,SOLAPUR vs. PRINCIPAL COMMISSIONER OF INCOME-TAX -4, PUNE

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