MADHUBAN DEALERS PVT. LTD,KOLKATA vs. PR. CIT-2, KOLKATA

The instant appeal filed by the Assessee is directed against the order dated 13-03-2020 passed by the Ld. Pr. CIT-2, Kolkata [ in short, the Ld. PCIT] u/s. 263 of the Income Tax Act, 1961 (hereinafter referred to as “ the Act”) for the Assessment Years 2010-11.

There is delay of 56 days in filing the instant appeal before us by the assessee. In this regard, the submission made by the ld. counsel for the assessee and also appearing in the application for condonation of delay is this that the impugned order passed by the Ld. PCIT though dated 13.03.2020, the assessee could file this appeal only on 26.06.2020. The delay was on account of pandemic situation followed by lockdown declared by the Govt. of India throughout the country. Under this situation, it was not possible for the assessee to prepare the appeal and to file the same within the prescribed time. The assessee further relied upon the Notification/Ordinance dated 31.03.2020 issued by the Central Govt. granting extension for filing appeals whose due dates were falling during the pandemic till 29.06.2020. The plea taken by the assessee has not been objected by the ld. DR with all his fairness. AY 2010-11 Madhuban Dealers P.Ltd. 2.1 Having regard to the practical difficulty faced by the assessee and the Notification/Ordinance in this regard issued by the Govt. of India, we find it fit and proper to condone the delay for the ends of justice. Hence, the delay is condoned.

The Ld. PCIT issued notice u/s. 263 of the ‘Act’ dated 07-01-2020 with the prima-facie finding of failure on the part of the Ld.AO to assess the income of the assessee u/s. 144/147 of the Act and found it erroneous as it is prejudicial to the interest of the revenue within the ambit of section 263 of the Act with the following observations:-

The Ld. PCIT ultimately set aside the issue to the file of the AO u/s. 263 of the Act with the direction upon him to frame the assessment order upon looking into the issues as per the observations made in the impugned order.

At the time of hearing of the instant appeal the Learned Counsel appearing for the assessee drew our attention at pages 9,11,12 of the Paper Book filed before us wherefrom it AY 2010-11 Madhuban Dealers P.Ltd. appears that during the proceedings u/s. 263 of the Act, three(3) notices dt. 07-01-2020, 29- 01-2020 and 18-02-2020 were issued, but he further submitted that the assessee has not received any one of the same. The Ld. Counsel for the assessee further drew our attention to page-13 of the P.B filed before us, wherein it is reflected that on 9-3-2020 the applicant has also sought for adjournment and prayer was made for fixing of the matter for hearing. It was further clarified by the assessee that he could come to know that the matter was fixed for hearing on 3-3-2020 only on 9-3-2020. There was some latches on their part due to illness of the partners of the assessee company for not being vigilant in the matter and finally the assessee prayed for granting of fresh date of hearing on a subsequent date. However, such plea was not taken into consideration by the Ld. PCIT and finally the impugned order was passed on 13-03-2020 without hearing the assessee. The Ld. DR, however, relied upon the order passed by the Ld. PCIT.

Upon hearing the respective parties and upon perusal of the orders passed by the revenue and also records available before us including the notices issued by Revenue and the adjournment letter written by the assessee as annexed to the Paper Book filed by the assessee, we are of the considered opinion that the impugned order has been passed by the Ld. PCIT without affording proper opportunity of being heard to the assessee. Though the three (3) notices were issued by the Revenue fixing the date of hearing, but finally, the adjournment application as part of the record before us, though suggests the request for adjournment on behalf of the assessee before the ld. PCIT made, the same is not reflecting in the order passed by the ld. PCIT dt. 13-03-2020, issued after four(4) days from the date of making such request. In that event, we find that the principle of natural justice has not been properly adhered to. Therefore, for the ends of justice, we find it fit and proper to set aside the issue to the file of the Ld. PCIT with a further direction upon him to adjudicate the matter on merits positively upon granting an opportunity of being heard to the assessee and upon taking into consideration the evidences, which the assessee may choose to file at the time of hearing of the matter and to pass a reasoned order. It is also made clear that the AY 2010-11 Madhuban Dealers P.Ltd. assessee will also not ask for any unnecessary adjournment and will cooperate with the Ld. PCIT during the proceedings before him.

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