M/S NAMDHARI FOOD INTERNATIONAL (P) LTD.,NEW DELHI vs. PRINCIPAL COMMISSIONER OF INCOME TAX,, ROHTAK

The main information leading to scrutiny was not properly verified by Ld. AO. Accordingly, Ld. AO was directed to redo the assessment in accordance with the law. The assessee failed to make any representation during revisionary proceedings. Pursuant to the said directions, another assessment has been framed on the assessee u/s 143(3) r.w.s. 263 on 18-03-2022 wherein Ld. AO added aforesaid amount to the income of the assessee. Aggrieved, the assessee has challenged the validity of revisionary order passed u/s 263. The Ld. AR has assailed the revisionary jurisdiction on the ground that there was no error in the assessment as originally framed by Ld. AO.

5. A perusal of the record shows that vide order dated 27.03.2023, the Principal Commissioner of Income Tax, PCIT, Rohtak remanded the case back to the Assessing Officer. The relevant portion of the order dated 27.03.2023 is reproduced as under: "7. Keeping in view of the facts and circumstances of the case as discussed above, I am of the considered opinion that the AO had passed the order dated 11.02.2021 in a very casual manner without due diligence and without conducting proper enquiries & verification which should have been made with respect to amended provisions of the Finance Act, 2015 & binding decision of Jurisdictional Hon'ble Punjab & Haryana High Court & Hon'ble Apex Court on the taxability of interest on enhanced compensation. Therefore, the assessment completed u/s 143(3) r.w.s 143(3A) & 143(3B) of the Act is erroneous so far as it is prejudicial to the interest of the revenue in terms of Explanation 2 of section 263 of the Act. Accordingly, the assessment order passed by the AO on 11.02.2021 u/s 143(3) r.w.s 143(3A) & 143(3B) of the Act for the A.Y. 2018-19 is set aside with the direction to pass an order afresh, after due consideration of the facts and in accordance with law after making requisite enquiries & proper verification with regard to issues mentioned above. The assessee is at liberty to adduce the facts as relevant before the AO at the time of assessment proceedings in consequence to this order. The AO shall allow the assessee, adequate & reasonable opportunity of being heard & make relevant submissions. It may be ensured that assessment order u/s 153(3) is passed within the prescribed time limit as per Income Tax Act. "

7. Vide order dated 27.03.2023 passed under Section 263 of the Act by the PCIT, the matter was remanded back to the Assessing Officer to pass a fresh order. During the pendency of the appeal before the Tribunal, itself, the Assessing Officer passed a fresh order on 18.02.2024 in compliance of order dated 27.03.2023. Undisputedly the appellant has preferred appeal against order dated 18.02.2024 as well, which is pending consideration. Simultaneously, the present appeal is preferred against order dated 28.06.2024 passed by the learned Income Tax Appellate Tribunal, Delhi Bench 'G', New Delhi.

The Ld. AR sought distinction in the facts of that case on the ground that in the present case, the order of Ld. Pr. CIT is an ex-parte order and the principles of natural justice were not adhered to by Ld. Pr. CIT. Secondly, in the present case, the assessee has not preferred further appeal against consequential order (as intimated by IRP Shri Rakesh Kumar Gupta). These facts have not been controverted before us.

6. We find that indeed the first and foremost argument of Ld. AR before us is the violation of principles of natural justice. It is the prayer of Ld. AR that another opportunity of hearing may be granted to the assessee to defend its stand. The Ld. AR is not seeking indulgence on merits. Secondly, the assessee is not in further appeal against consequential order and not providing this opportunity of hearing would essentially forfeit the assessee’s right to appeal. Accordingly, we set aside the impugned order and restore the appeal back to the file of Ld. Pr. CIT for fresh consideration with a direction to the assessee to plead and prove its case. The Ld. Pr. CIT would pass a fresh order u/s 263 of the Act after providing opportunity of hearing to the assessee.