M.P. STATE CIVIL SUPPLIES CORPORTION LTD,BHOPAL vs. THE PR CIT -1 , BHOPAL

Feeling aggrieved by revision-order dated 18.03.2021 passed by Ld. Pr. Commissioner of Income-Tax, Bhopal (in short “Ld. PCIT”) u/s 263 of Income Tax Act 1961, which in turn arises out of assessment-order dated 28.12.2018 passed by Ld. ACIT-2(1), Bhopal (in short “Ld. AO”) u/s 143(3) of the Act, for Assessment-Year 2016-17, the assessee has filed this appeal on various grounds as mentioned in Appeal Memo, challenging the validity of the aforesaid revision-order.

Briefly stated the facts are such that the original assessment-order of the relevant assessment year 2016-17 was passed by Ld. AO on 28.12.2018 u/s 143(3) of the Act. Subsequently, Ld. PCIT examined the record of assessment- proceeding and observed that the assessment-order passed by Ld. AO is erroneous in so far as it is prejudicial to the interest of revenue. Based on such observation, Ld. PCIT initiated action for revision of assessment-order by issuing show-cause notice dated 01.03.2021 to the assessee. Finally, the Ld. PCIT passed revision-order u/s 263 on 18.03.2021 whereby he has set aside assessment-order and directed the Ld. AO to make a de novo assessment. Aggrieved by revision-order, the assessee has come in appeal before us.

Ld. AR appearing on behalf of assessee invited our attention to the show- notice dated 01.03.2021 issued by Ld. PCIT, a copy of which is placed at page No. 10 of the Paper-Book. Ld. AR submitted that the Ld. PCIT, through this show-notice, fixed hearing on 16.03.2021 at 4:00 PM. Then, the Ld. AR carried us to Page No. 12 of the Paper-Book and demonstrated that in response to the said show-cause notice, the assessee filed application dated 13.03.2021 to Ld. PCIT seeking short-adjournment up to 26.03.2021 since the assessee needed some time to prepare the details required by Ld. PCIT. Ld. AR submitted that M.P. State Civil Supplies Corporation Limited ITANo.11/Ind/2021 A.Y. 2016-17 Page 3 of 5 the copy of adjournment-application, placed at Page No. 12 in the Paper-Book, is duly-acknowledged by “ITBA System” of Income-tax Department and there cannot be any dispute about it. Ld. AR submitted that despite such adjournment-request submitted by assessee well in time, the Ld. PCIT hurriedly passed revision-order on 18.03.2021 itself without taking cognizance of assessee’s request. Ld. AR submitted that the order passed by Ld. PCIT is against the established procedure of law as well as against the principal of natural justice. Therefore, the order passed by Ld. PCIT deserves to be set aside.

We have considered submissions of both sides and perused the case- record in the light of provision of section 263. We observe that in the show- cause notice issued by Ld. PCIT, the hearing was fixed on 16.03.2021 but prior to that, the assessee had filed adjournment-application well in time on 13.03.2021. We further observe that the assessee requested a short- adjournment upto 26.03.2021 and this was the first adjournment-request of assessee. On perusal of para No. 3 of the order passed by Ld. PCIT, we observe that Ld. PCIT has mentioned “However, none attended on the dates of hearing and also no request for adjournment was made through personal appearance/telephone.” But this finding itself is erroneous since the assessee has filed a valid adjournment-application at “ITBA system” of department. Section 263 clearly prescribes that the Ld. PCIT may “….after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order thereon ….”. In the present case, Ld. PCIT has not afforded the opportunity of hearing to the M.P. State Civil Supplies Corporation Limited ITANo.11/Ind/2021 A.Y. 2016-17 Page 4 of 5 assessee by not taking cognizance of the adjournment-application and, therefore, we are satisfied that the order passed by Ld. PCIT is unjust. Hence, in such circumstance, we feel it appropriate to refer the matter back to Ld. PCIT for a fresh and adequate adjudication after giving opportunity of hearing to the assessee. Accordingly, we send this matter back to Ld. PCIT with a direction that he shall give reasonable opportunities of hearing to the assessee and pass order afresh in accordance with law. Needless to mention that the assessee shall be entitled to file the details / documents and the Ld. PCIT shall consider the same.

In the result, the appeal of Assessee is allowed for statistical purposes.

Date of taking dictation 23.9.22

Date of typing & draft order placed before the 23.9.22 Dictating Member

Date on which the file goes to the Bench Clerk