FORTUNE CARS PVT LTD ,MUMBAI vs. PRINCIPLE COMMISSIONER OF INCOME TAX-6, , MUMBAI
Facts
The assessee filed an appeal challenging a revision order passed by the PCIT under section 263 of the Income Tax Act for AY 2018-19. The PCIT initiated proceedings alleging the AO's assessment order was erroneous, particularly regarding a stock valuation addition.
Held
The Tribunal noted that the assessee did not respond to the PCIT's notices, leading to an ex-parte revision order. The assessee argued that their reply was filed but not received by the PCIT due to simultaneous penalty proceedings. The Tribunal found merit in this argument and decided to provide another opportunity.
Key Issues
Whether the revision order passed by PCIT u/s 263 was justified when the assessee did not get an opportunity to be heard.
Sections Cited
263, 143(3), 68, 69, 115BBE, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: JUSTICE (RETD.) C V BHADANG, HON’BLE& SHRI B.R. BASKARAN
PER B.R. BASKARAN, ACCOUNTANT MEMBER :
The assessee has filed this appeal challenging the revision order dated 27/02/2024 passed by Pr. Commissioner of Income Tax [in short the ld. PCIT], u/s. 263 of the Act and it relates to the Assessment Year 2018-19.
The ld.Counsel appearing on behalf of the assessee submitted that the Assessing Officer had completed the assessment for the year under consideration u/s. 143(3) of the Act. The ld. PCIT initiated revisional proceedings u/s. 263 of the Act alleging that the assessment order passed by the Assessing Officer is erroneous and prejudicial to
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the interest of the Revenue. The case of the ld PCIT is that the addition of Rs.2.27 crores made by the Assessing Officer in respect of difference in valuation of stock has been made while computing income under the head business. However the said addition should have been made either u/s 68 or u/s 69 of the Act and tax should have been charged at the higher rates prescribed u/s. 115BBE of the Act.
The ld PCIT noticed that the assessee did not respond to the notices issued by him and he proceeded to pass the impugned revision order ex-parte directing the Assessing Officer to reassess the total income as per observations made by him in the said order.
The ld A.R submitted that two proceedings were going on simultaneously for the present assessment year, i.e., revision proceeding u/s 263 of the Act by Ld PCIT and the penalty proceedings u/s 271(1)(c) of the Act by the AO. The assessee, however, uploaded the replies to the notices issued by ld PCIT u/s. 263 of the Act against the penalty proceedings that was pending at the very same point of time. Hence, the reply so filed by the assessee did not reach the hands of ld PCIT and it has resulted in passing of the impugned ex-parte order.
Accordingly, the ld.A.R submitted that the assessee may be provided with one more opportunity to furnish those replies before the ld. PCIT and explain the case.
We have heard ld. Departmental Representative and perused the record. Having regard to the submissions made by ld A.R, we are of the view that, in the interests of natural justice, the assessee may be provided with one more opportunity to present its case properly before ld PCIT. Accordingly, the order passed by ld PCIT is set-aside and all
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the issues are restored to his file for passing a fresh order after affording adequate opportunity of being heard to the assessee. We also direct the assessee to fully co-operate with ld PCIT for expeditious completion of the set aside revision proceedings.
In the result, the appeal field by the assessee is treated as allowed.
Order pronounced in the open court on 10 June, 2024. Sd/- Sd/- [Justice (Retd) C V Bhadang] (B.R. Baskaran) President Accountant Member Mumbai, Date : 10 June, 2024 VM. Copy to : 1) The Appellant 2) The Respondent 3) The PCIT/CIT concerned 4) The D.R, “F” Bench, Mumbai 5) Guard file
By Order
Dy./Asstt. Registrar I.T.A.T, Mumbai
