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Income Tax Appellate Tribunal, AGRA BENCH: AGRA
Before: SHRI SUNIL KUMAR SINGH & SHRI MANISH AGARWAL
O R D E R [ PER MANISH AGARWAL, AM: This appeal is filed by the assessee against the order of the Learned Principal Commissioner of Income Tax (Appeals), Agra [‘Ld. PCIT’ in short] u/s 263 of the Income Tax Act, 1961 (‘the Act’ in short) dated 31.03.2022 for Assessment Year 2017-18.
The assessee has taken the following grounds of appeal:
1. That, the notice under section 263 dated 28-03-2022, was not served upon the appellant, as it was neither served on person, nor on the registered e-mail as shown on his e-filing portal.
2. That, the order under section 263 dated 31-03-2022, was not served upon the appellant, as it was neither served on person, nor on the registered e-mail as shown on his e-filing portal.
3. That the appellant was denied opportunity of being heard or to file his submission, as he had no occasion to submit his written submissions.
4. That, the order under section 263 dated 31-03-2022, was not passed on 31-03-2023, as it was not uploaded on the e-filing portal of the appellant on 31-03-2023. Thus, the proceedings under section 263, were barred by limitation.
5. That, under facts of the case and in law, the Pr. Commissioner of Income Tax-1, Agra wrongly invoked the provisions of section 263 on the ground of no enquiry by AO in respect of cash deposits in Bank Account during demonetization period out of cash available at Rs.1,08,000 with his wife.
6. That, under facts and circumstances of the case and in law, the assessment order dated 26-11-2019 passed u/s 143(3) was not erroneous therefore, it was beyond the scope of section 263 of the Act.
7. That, under facts and circumstances of the case and in law, the order dated 31-03-2022 passed u/s 263, is without jurisdiction and as such, it deserves to be set aside.
8. That the appellate craves your honor’s leave to alter, amend, add or delete any ground of appeal.”
3. In Ground No.1 to 3, the assessee has challenged the order passed u/s 263 of the Act on the grounds that the notice for initiation of proceedings was not served upon the assessee and the revisionary order was passed in haste without providing proper opportunities of being heard to the assessee.
The appeal of the assessee is delayed by 487 days. The assessee has filed an application for condonation of delay along with an affidavit stating that order of Ld. PCIT was uploaded through online e-filing portal on 31.03.2022, however, the assessee was never Anshul Jain vs. PCIT intimated about initiation or completion of any such proceedings u/s 263. The assessee for the first time come to know about any such proceedings only when the consequential assessment order dated 15.03.2023 was passed and served and demand was raised. Thereafter, the assessee obtained the certified copy of the order u/s 263 and filed the appeal before the Tribunal. All these facts were duly affirmed in the affidavit filed by the assessee.
Hon'ble Supreme Court in Sambhaji and Ors V Gangabai and Ors., in Civil Appeal no. 6731/2008 (arising out of SLP(C) No. 14562 of 2006) vide judgment dated 20.11.2008, has held that the object of prescribing procedure is to advance the cause of justice. In an adversarial justice system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extra ordinary situations in the ends of justice. Justice is the goal of jurisprudence. Procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. Processual law is not to be tyrant but a servant, not an obstruction but an aid to justice. A procedural prescription is the handmaid and not the mistress, lubricant, not a resistance in the administration of justice. In view of this and in the interest of justice, we find sufficient cause to condone the delay caused in filing the
Before us, the Ld. DR of the assessee has submitted that the first show cause notice u/s 263 was issued only on 28.03.2022 fixing the date of hearing for 30.03.2022 i.e. within a period of two days, asking the assessee to file details of the cash deposited in the bank accounts. The said notice was communicated to the assessee through email id and the address on which the mail sent is ‘manojca2708 @ gmail.com whereas the registered email id of the assessee on the income tax e-filing portal of the assessee is anshuljainm@gmail.com. In support of this contention, assessee has filed the screen shot of e- filing portal of the assessee which is available in the paper book. It is further submitted by the ld. AR that no proper opportunities of hearing is granted to the assessee as the intimation for initiation proceedings in terms of the notice u/s 163 was issued for the first time on 28.03.2022 for making compliance on 30.03.2022. The Ld. AR further submit that the said notice was uploaded on the e-filing portal on 29.03.2022 which is evident from the screen shot of the e- portal of the assessee as available that PB-44. He thus submits that not providing a minimum seven day to respond is contrary to in violation of principal of natural justice, and, therefore, he requested that order u/s 263 may kindly be quashed. He placed reliance on the judgment of Hon’ble Kolkata High Court in the case of Lake Gardens Saha Education Society vs. Assessment Unit reported in [2024] 166 taxmann.com 443.
Anshul Jain vs. PCIT 6. On the other hand, the Ld. CIT-DR vehemently supported the orders of Ld. PCIT and submitted that the Ld. PCIT has acted in accordance with law and therefore, the order deserves to be uphold.
We have heard the rival submissions and perused the materials available on record. In the instant case, the assessment was completed in terms of the order passed u/s 143(3) of the Act dated 26.11.2019 and, thereafter, the Ld. PCIT has remained silent for almost 28 months and suddenly at the figment of the proceedings has issued a notice u/s 263 proposing the revision of the assessment order by way of issue of notice on 28.03.2022 after hearing on 30.03.2022. It is further seen that the said notice was served through e-filing portal on 29.03.2022 and, thus, the assessee was provided only one day to respond the same. As the assessee was not aware of the proceedings at very next date i.e. 31.03.2022. The order u/s 263 was passed directing the Assessing Officer for making further verification in the matter. From the perusal of all these facts and the events occurred, it is seen that the Ld. PCIT has acted in harried manner without providing the assessee reasonable opportunities to be heard. It is further seen that before reaching to the conclusion that the assessment order is erroneous and prejudicial to the interest of the Revenue. The Ld. PCIT has to reach the conclusion that the AO has not made sufficient or adequate enquiries. Opportunity of being heard is little more than serving a notice on assessee. It is not an empty formality. Without giving a proper opportunity to assessee, revision proceedings u/s. 263 cannot be finalized as the provisions Under these facts and circumstances of the case, in our considered opinion, the Ld. PCIT has violated the principle of natural justice and, accordingly, the order passed u/s 263 is hold bad in law and the assessee needs a fresh opportunity of being heard. Accordingly, we set aside the order passed by ld. PCIT u/s 263 and direct him pass a fresh order after providing the assessee a reasonable opportunity to present his case. The ground of appeal No. 3 taken by the assessee is allowed. The other grounds of appeal become academic and thus not adjudicated.
In the result, the appeal of the assessee is partly allowed as per direction given hereinabove.
Order pronounced in the open court on 24.06.2025.