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Facts
A batch of 21 appeals were filed against orders of the PCIT/CIT. A common issue across these appeals was that the PCIT/CIT's orders lacked specific findings on how the assessments were erroneous or prejudicial to the revenue's interest. The show-cause notices issued under section 263 were largely un-responded to by the assessees.
Held
The Tribunal held that the PCIT's section 263 revision directions were not sustainable. This was because the revisional authority failed to provide any categorical finding on merits, discuss the relevant error, or demonstrate prejudice to the revenue, which are essential prerequisites for invoking revisionary powers under section 263. The Tribunal relied on the settled law that an assessment cannot be revised solely due to non-response to a show-cause notice.
Key Issues
Whether revisionary orders under Section 263 are sustainable when the revisional authority fails to provide specific findings on the erroneous nature of the assessment and prejudice to the revenue, and the show-cause notices were not responded to by the assessees.
Sections Cited
263
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: Sh. Satbeer Singh Godara & Sh. Manoj Kumar Aggarwal
(APPELLANT) (RESPONDENT) PAN No. AFSPA3819E Assessee by : Sh. Rajendra Sharma, Adv. Revenue by : Sh. Sukesh Kumar Jain, CIT-DR Date of Hearing: 13.02.2025 Date of Pronouncement: 21.02.2025 ORDER Per Bench: These twenty one assessees as many appeals involving the following relevant details thereof stand tabulated as under: Sl. N o. IT A N os . A. Y . Ap pella nt Re s pon den t O rde r pa s se d a gains t P roce e dings u/ s 1. 33/ A g r./ 202 3 201 2- 13 Ra j en d ra P CIT P CIT , G wa lior’ s c as e N o. 26 3 Singh P r. CIT / Gw l/2 63/ 2 0 21- 2 2 Ch a uh a n dat e d 1 4. 0 3 .2 0 22 2. 40/ A g r./ 202 2 201 2- 13 P ra ve en P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 Kuma r P CIT -1 / A gra/ IT O (O SD) Ve rma / 263/ P KV/ 2 0 2 1- 22 Da te d 31 .0 3. 20 22 3. 46/ A g r./ 202 1 201 5- 16 RBA P CIT- 1 P CIT , A gra - 1’s , D IN & 14 3( 3) Sys te ms ( P) orde r No . Lt . ITB A/ RE V/ F/ REV5 / 2 02 0 - 21/ 1 0 32 0 6 040 7( 1) , dat e d 3 1. 0 3 .2 0 21 4. 39/ A g r./ 202 1 201 6- 17 As hok P CIT- 1 P CIT , A gra - 1’s , D IN & 14 3( 3) Kuma r orde r No . Agra wa l ITB A/ RE V/ F/ REV5 / 2 02 0 - 21/ 1 0 31 4 8 231 0( 1) , dat e d 1 5. 0 3 .2 0 21 5. 39/ A g r./ 202 2 201 6- 17 Sh ri S idh i P CIT- 1 P CIT , A gra - 1’s , D IN & 14 3( 3) Vinay ak orde r No . Dev elo pe rs ITB A/ RE V/ F/ REV5 / 2 02 0 - 21/ 1 0 32 0 5 494 5( 1) , dat e d 3 1. 0 3 .2 0 21 6. 26/ A g r./ 202 2 201 7- 18 Te j Sh oe P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 Te ch P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ Te j/ 2 0 21- 22 Da te d 31 .0 3. 20 22
ITA No. 33/Agr./2022 & 20 others 6
47/ A g r./ 202 2 201 7- 18 Pe ople’ s P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 Herit age P CIT -1 / Ag ra / ITO Hos pita l Pv t . ( OSD) / 26 3/ PHH PL / Lt d. 202 1 - 22 Da te d 31 .0 3. 20 22 8. 49/ A g r./ 202 2 201 7- 18 G irj es h P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 G upta P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ G irje s h Gu pta / 2 0 21- 22 Da te d 31 .0 3. 20 22 9. 50/ A g r./ 202 2 201 7- 18 G oya l P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 B roth e rs P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ G oya l / 202 1 - 22 Da te d 31 .0 3. 20 22 10. 66/ A g r./ 202 2 201 7- 18 Big S h oes P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ Big Sh oes / 202 1 - 22 Da te d 31 .0 3. 20 22 11. 67/ A g r./ 202 2 201 7- 18 J one s P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 T ra de rs P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ J T/ 2 02 1- 2 2 Da te d 31 .0 3. 20 22 12. 81/ A g r./ 202 2 201 7- 18 In du G ol d & P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 diam on ds P CIT -1 / Ag ra / ITO Pv t. L t d. ( OSD) / 26 3/ IG D/ 2 02 1- 2 2 Da te d 31 .0 3. 20 22 13. 83/ A g r./ 202 2 201 7- 18 O M Ic e P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 Ch ill in g P CIT -1 / Ag ra / ITO Plan t ( OSD) / 26 3/ O m Ic e & Ch ill in g Pl an t/ 202 1- 22 Da te d 31 .0 3. 20 22 14. 84/ A g r./ 202 2 201 7- 18 Ram Mu rt i P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ Ram Mu rt i/ 20 21- 2 2 Da te d 31 .0 3. 20 22 15. 85/ A g r./ 202 2 201 7- 18 Sho bhi t P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 Ban sa l P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ SB/ 2 02 1- 22 Da te d 31 .0 3. 20 22 16. 97/ A g r./ 202 2 201 7- 18 Shiva P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 T ra de rs P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ M/ s Sh iv a T ra de rs / 20 2 1- 2 2 Da te d 31 .0 3. 20 22 17. 98/ A g r./ 202 2 201 7- 18 Le kh raj a n d P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 As sociate s P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ Kek h raj / 202 1 - 22 Da te d 31 .0 3. 20 22 18. 107 / A gr./ 20 22 201 7- 18 P ra sh a nt P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 Kuma r P CIT -1 / Ag ra / ITO Ma n ga l ( OSD) / 26 3/ P KM/ 2 02 1- 22 Da te d 31 .0 3. 20 22 19. 107 / A gr./ 20 23 201 7- 18 Ma n oj P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 Aga rwa l P CIT -1 / Ag ra / ITO ( OSD) / 26 3/ Ma n oj / 202 1 - 22 Da te d 31 .0 3. 20 22 20. 153 / A gr./ 20 23 201 7- 18 Ma n jh i B ric k P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 Field P CIT -1 / A gra/ IT O( O SD) / 263/ M an j hi/ 2 02 1 - 22 Da te d 31 .0 3. 20 22 21. 139 / A gr./ 20 24 201 7- 18 As ha Gu pt a P CIT- 1 P CIT , A g ra- 1’ s c as e No . 26 3 P CIT -1 / A gra/ IT O( O SD) / 263/ As ha / 20 2 1- 2 2 Da te d 31 .0 3. 20 22
ITA No. 33/Agr./2022 & 20 others 7
Heard all the assessees and department through their respective learned representatives. Case files perused.
It emerges during the course of hearing in all these cases that although they are filed by different assessees against the respective orders of the learned PCIT’s or CIT’s; as the case may be, we find a clinching common/identical fact herein as none of the impugned order(s) has given any categorical finding as to how and in what manner, the regular assessment(s) in question are erroneous ones or they do cause prejudice to the interest of the Revenue, simultaneously.
Faced with this situation, the Revenue’s very able learned CIT-DR vehemently argues that once these assessees had been issued the corresponding section 263 show-cause notices which remained non-complied at their end, even if there is no specific finding in the impugned orders, the same deserve to be upheld for want of rebuttal by the appellant side before the revisional authority(es).
We have given out thoughtful consideration to the vehement rival pleadings. We find no reason to sustain any of the impugned revision direction forming subject matter of our adjudication in all these cases. This is for the precise reason that apart from reproducing the corresponding show-cause notices which went un-responded by the most of the assessees, ./2022 & 20 others 8 there is not even a single instance wherein the learned revisional authority has arrived at any categorical finding on merits after having discussed the relevant error as well as prejudice caused to the interest of the Revenue. Needless to say, the law on exercise of the impugned revision jurisdiction stand very well settled since long in light of Malabar Industries Ltd. vs. CIT (2000) 243 ITR 83(SC) that before the same is invoked, the assessment has to be simultaneously erroneous as well as causing prejudice to the interest of the Revenue.
Meaning thereby that till the time such a conclusion is not arrived at by the learned revision authority, an assessment could not be held as liable to be revised merely because of the fact that the corresponding show-cause notice(s) issued to the taxpayer have gone un-responded. We are further informed that case law M. L. Chains Vs. PCIT (2024) 461 ITR 457 (All.) has already decided the very issue involving a similar revision direction, as not sustainable, in para 20 thereof. We thus accept the assessees identical submissions in all these cases to this extent and reverse the learned PCIT’s section 263 corresponding identical revision directions. Ordered accordingly. All necessary computation shall follow.
All other pleadings on merit amongst the parties stand rendered academic in above terms.
ITA No. 33/Agr./2022 & 20 others 9
7. To sum up, all these twenty one assessees’ as many & 46/Agr./2021, 39, 40, 47, 49, 50, 66, 67, 81, 83, 84, 85, 97, 98 & 107/Agr./2022, ITA Nos. 33, 107 & 153/Agr./2023 and ITA Nos. 139/Agr./2024 are allowed in above terms. A copy of this common order be placed in the respective case files.