M/S.INTEGRATED TEXTILES CONNECTIONS P. LTD.,BANGALORE vs. PR. COMMISSIONER OF INCOME TAX, BANGALORE

PDF · subscribers
ITA 1630/BANG/2016Status: DisposedITAT Bangalore02 September 2020AY 2011-124 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the Pr. CIT cannot direct the AO to make an addition in 263 proceedings, but can only direct adjudication of the issue. The AO violated principles of natural justice by making an addition without issuing notice to the assessee.

What were the facts?

The assessee filed an appeal against an order passed by the Pr. Commissioner of Income-tax under section 263. The Pr. CIT directed the AO to disallow cash/cheque payments under section 40A(3). The AO made the addition without providing the assessee an opportunity to be heard.

What were the issues?

Whether the Pr. CIT can direct an addition under Section 263, and whether the AO violated principles of natural justice by making an addition without providing an opportunity to be heard.

Which sections of the Income-tax Act were involved?

Section 263,Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE

Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI

For Appellant: Shri V Srinivasan, Advocate
For Respondent: Shri Pradeep Kumar, CIT (DR)

ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal has been filed by assessee against order passed by Ld.CIT under section 263 of the Act by order dated 30/03/2016. 2. At the outset, Ld.AR submitted that, only grievance that assessee has in impugned order is regarding direction by Ld.Pr.CIT to Ld.AO to disallow payments made by way of cash/cheque under section 40A(3) of the Act.

3.

Admittedly, Ld.AO did not verify the issue considered by Ld.Pr.CIT in 263 proceedings. It has been submitted that, in 263 proceedings Ld.Pr.CIT cannot direct assessing officer to make addition, rather a direction for adjudicating the issue can only be made.

4.

Ld.AR. Submitted that, pursuant to order passed under section 263 Ld.AO passed order making addition in hands of assessee, without offering opportunity of being heard, causing violation of principles of natural justice.

5.

Ld.CIT.DR relied on order passed by Ld.Pr.CIT. We have perused submissions advanced by both sides in light of records placed before us. Admittedly, Ld.Pr.CIT in impugned order, directed Ld.AO to make addition in hands of assessee. It has been submitted that Ld.AO passes order giving effect to section 263 order on 30/6/2016, without issuing any notice to assessee. Assessee thus has not been granted opportunity of being heard before Ld.AO. Such is not the mandate of section 263. We therefore, set aside order dated 30/6/2016 passed by Ld.AO giving effect to direction of Ld.Pr.CIT. LdAO is directed to issue notice to assessee in respect of the issue considered by Ld.Pr.CIT in impugned order. Needless to say that, proper opportunity of being heard shall be granted to assessee. Assessee is directed to file all requisite details in support of its contention. Based on evidences filed by assessee, Ld.AO shall pass a reasoned order in accordance with law. In the result, appeal filed by assessee stands allowed for statistical purposes. Order pronounced in open court on Order pronounced in the open court on 2nd Sept, 2020. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 2nd Sept, 2020. /Vms/ Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore 6. Guard file

More judgments on Section 263

All 13,616 judgments and leading authorities on Section 263 →

Recent GST High Court judgments

Search GST case law →