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Facts
The assessee, Ritik Enterprises, filed an appeal against an order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, 1961. The PCIT had cancelled and set aside the assessment order passed by the Assessing Officer, stating it was erroneous and prejudicial to the revenue. Despite opportunities, the assessee did not appear or provide submissions.
Held
The Tribunal noted that the assessee did not appear before them either. However, considering the principles of natural justice and the nature of income tax laws as welfare legislation, the Tribunal decided to restore the matter to the PCIT for fresh adjudication. The PCIT was directed to grant a reasonable opportunity of hearing to the assessee.
Key Issues
Whether the PCIT was justified in setting aside the assessment order passed by the Assessing Officer when the assessee failed to appear and provide submissions, and whether principles of natural justice were followed.
Sections Cited
263, 143(3)
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI RATNESH NANDAN SAHAY
Assessee represented by None Department represented by Shri Sanjay Kumar, CIT-DR Date of hearing 22/01/2025 Date of pronouncement 18/02/2025 O R D E R PER: RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER: 1. This appeal by the assessee is directed against the order of the learned Principal Commissioner of Income Tax, Ranchi, [in short, the ld. PCIT] dated 02/03/2021 passed under Section 263 of the Income Tax Act, 1961 (in short, the Act) for the Assessment Year (AY) 2016-17 as per the grounds of appeal on record.
2. At the time of hearing, none has appeared on behalf of assessee, though, the notices of hearing have been duly served on the given address.
3. Submissions of the learned Commissioner of Income Tax-Departmental Representative (ld. CIT-DR) for the revenue were recorded and the documents have been given careful consideration while the matter is taken as heard. The ld. CIT-DR for the revenue supported the order of ld. PCIT. The ld. CIT-DR for Ritik enterprises Vs PCIT the revenue submits that the assessee was given more than sufficient opportunity before the ld. PCIT but the assessee failed to avail such opportunities. When the assessee has not furnished any submission and evidences, the ld. PCIT has no option except to set aside the order of Assessing Officer for passing assessment order afresh by making enquiries and verification regarding the sundry creditors and finalize the assessment in accordance with law. The ld. CIT-DR for the revenue submitted that even before the Tribunal, neither the assessee has appeared nor any application for adjournment has been given. Thus, the assessee does not deserve any leniency and the order of ld. PCIT may be upheld.
We have considered the submissions of the ld. CIT-DR for the revenue and perused the material on record and have gone through the orders of the lower authorities. We find that the Assessing Officer completed the assessment under Section 143(3) of the Act vide assessment order dated 14/12/2018. The ld. PCIT cancelled and set aside the assessment order passed by the Assessing Officer in ex parte order by taking view that despite giving opportunities to the assessee, the assessee failed to file reply/submissions. The ld. PCIT held that the assessment order passed under Section 143(3) of the Act dated 14/12/2018 is erroneous in so far as it is prejudicial to the interests of revenue within the meaning of Section 263 of the Act. We find that ld. PCIT instead of allowing further time, passed the impugned order in setting aside the assessment order passed by the Assessing Officer for de novo proceedings. We find from perusal of impugned order that the assessment order was passed by the Assessing Officer on 14/12/2018 and the first show cause notice Ritik enterprises Vs PCIT under Section 263 of the Act was issued to the assessee on 08/01/2021 fixing the date of hearing on 20/01/2021. Thereafter, another opportunity was provided to the assessee by fixing the date of hearing on 17/02/2021. Total three opportunities were provided to the assessee. Now before us, again none has appeared on behalf of assessee to substantiate its case. It is correct that reasonable opportunities have been provided to the assessee, still, there was no compliance. The facts remain that the income tax laws are within the ambit of welfare legislation which are absolutely separate from penal legislation and therefore, given the facts and circumstances and as per applicable law, benefit of doubt has to be attributed to the assessee/tax payer. There may be circumstances beyond the control of assessee or "vis major" because of which the assessee may not have able to comply with the notices before the revenue authorities. Under the given facts on record, which cannot be said that such non-compliance was deliberate or malafide on the part of assessee. Considering the facts and circumstances of the case and keeping in view the principles of natural justice, the matter is restored to the file of ld. PCIT for deciding the appeal afresh in accordance with law. Needless to direct that before passing the order, the ld. PCIT shall grant reasonable opportunity of being heard to the assessee. The assessee is also directed to avail this opportunity and not to cause further delay and seek adjournment without any valid reasons and to furnish all the details and evidences to justify various grounds of appeal raised in the appeal. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes.