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Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI
Before: SMT BEENA A PILLAI & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M. 1. All these 3 appeals filed by the different assessee are against the order passed by the learned Pr. Commissioner Of Income Tax, Ghaziabad under section 263 of the income Tax Act in their respective cases involving the Page | 1 similar issue and therefore they are taken for hearing together. The parties also advanced their arguments in all 3 appeals identically. Hence, by this common order those are disposed of.
The challenge to the appeal in by Smt Anita Rani for assessment Year 2010-11 to the order of the Principal Commissioner Of Income Tax, Ghaziabad dated 22/3/2017 passed u/s 263 of the Income Tax Act wherein it is stated that assessee has not been served up on any notice before passing order under section 263 of the income tax act , therefore, assessee did not get any opportunity of being heard, therefore the order passed by the learned Pr Commissioner Of Income Tax is without any jurisdiction. The assessee challenges the above issue in ground No. 1 of the appeal wherein it is challenged that the learned Principal Commissioner Of Income Tax has erred in law and on facts in assuming jurisdiction under section 263 of the Income Tax Act.
The learned authorised representative referred to page number 7 of the order, wherein in para number 1, it is mentioned that :-
“Having received the proposal show cause notice dated 22/2/2017 was issued to the assessee but on the date fixed for hearing. None attended the proceedings. Instead show cause notice was returned unserved on 2/3/2017 with the remark assessee could not be traced in spite of best efforts. It is relevant to mention that assessment was completed in the month of April, 2015 and notices were served on the same address. The return of so cause notice issued under section 263 of the income tax act indicates that the assessee has deliberately and intentionally returned the show cause notice served under section 263 of the act as he had no explanation to furnish in the case.”
Stating the above facts, the learned authorised representative submitted that the learned principal Commissioner of income tax has passed the order under section 263 of the income tax act without serving any notice on the assessee, so assessee did not get any opportunity of hearing , which is the basic condition of order u/s 263 of the Act. He therefore submitted that the order passed by the learned principal Commissioner of income tax suffers from the basic jurisdictional defect. He further relied upon the decision of the Hon’ble Delhi High Court in 86 taxmann.com 35 (Delhi) in Tulsi Tracom Private limited vs CIT and also the decision of the Hon’ble Rajasthan High Court in 147 ITR 379 in CIT vs Girdhari Lal. Therefore, it is submitted that the issue is squarely covered in favour of the assessee has no notice has been served on the assessee before passing any order under section 263 of the income tax act.
The learned departmental representative vehemently contested the argument of the learned authorised representative and submitted that assessee has appeared before the Commissioner of income tax in the proceedings under section 263 of the income tax act and therefore now the assessee cannot complain that no notice has been served on the assessee. He further pressed into service the provisions of section 292BB of the act and stated that where an assessee has appeared in any proceedings or cooperated in any enquiry relating to an assessment of reassessment, now it is not open for the assessee to challenge the service of the notice. He therefore submitted that the issue is not covered in favour of the assessee by the judicial precedents cited before the bench. 6. We have carefully considered the rival contention and perused the order of the learned principal Commissioner of income tax passed under section 263 of the income tax act. As per the para stated above of that particular order. It is apparent that assessee has not been served any notice under section 263 of the income tax act. Therefore the learned principal Commissioner of income tax passed an order on the basis of material available on record. Therefore, it is apparent that the issue has been decided by the learned principal Commissioner of income tax on the basis of the information available on record. Without giving proper opportunity of hearing to the assessee. As the assessee has not been served any notice before passing of the order under section 263 of the income tax act, no opportunity was available to the assessee to represent his case. In view of this, the order passed by the learned principal Commissioner of income tax is not sustainable in law. The provisions of section 263 of the income tax act contemplates that after giving the assessee an opportunity of being heard the learned principal Commissioner of income tax should have passed the impugned order. In the circumstances as there is no service of notice on the assessee did not meet the requirement of opportunity of being heard as provided under section 263 of the income tax act. It is mandatory for the learned principal Commissioner of income tax, who passed the order under section 263 of the income tax act, or to have been fully satisfied that the adequate opportunity was given to the assessee to controvert the facts stated in the notice under section 263 and to explain the circumstances surrounding such facts. The satisfaction of the commissioner on this count could not have been arrived as the process commencing with the issue of the notice under section 263: in in the order was completely hurried and without following the mandatory requirement of serving a notice on the assessee and opportunity of being heard given to the assessee. In view of this there is no doubt that this does not constitute any opportunity in respect of notice under section 263 of the income tax act. The facts in the order of the Hon’ble jurisdictional High Court in 86 Taxmann.com 35 and the Hon’ble Rajasthan High Court in 147 ITR 379 squarely covered the issue in favour of the assessee. In view of this, we are unable to sustain the order passed by the learned Principal Commissioner of Income Tax under section 263 of the income tax Act. Hence, same is quashed. Accordingly, Ground No. 1 of the appeal of the assessee is allowed.
Accordingly filed by the assessee for assessment year 2010-11 is allowed.
In 2010-11 filed by Mr Ankush Singhal and ITA No. 2390/Del/2017 for assessment year 2010-11 filed by Mr Anilkumar Singhal are having the similar facts, where the assessee has challenged the order passed by the learned principal Commissioner of Income Tax, Ghaziabad passed under section 263 of the income tax Act dated 22/3/2017. The facts relating to the above order clearly shows that in these cases also the learned principal Commissioner of income tax has passed the similar order without serving any notice on the assesses. Therefore, in view of our decision in ITA No. 2388/Del/2017, we also quash orders passed by the learned principal Commissioner of income tax under challenge before us in above 2 appeals and allow ground number 1 of those appeals.
Accordingly, appeals filed by the assessee in both the above cases is allowed. Order pronounced in the open court on 17/05/2019.