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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
Per Shri Duvvuru RL Reddy, Judicial Member :
This appeal is filed by the assessee against the order of the Principal Commissioner of Income Tax (Pr.CIT), Vijayawada dated 15.03.2021 for the Assessment Year (A.Y.) 2016-17, passed u/s 263 of the Income Tax Act, 1961 (in short ‘Act’).
Brief facts of the case are that the assessee is an individual, engaged in real estate business, deriving income from salary, house property, income from business and other sources. The assessee filed return of income for the A.Y.2016-17 declaring income of Rs.5,56,45,410/-.
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Subsequently, the case was selected for scrutiny by CASS. After issuance of notice, the assessment was completed u/s 143(3) of the Act on 21.12.2018. The Ld.Pr.CIT initiated proceedings u/s 263 of the Act, examined the assessment records and found that the assessment order was passed without making any enquiries or verification. Therefore, the assessment order is considered as erroneous and prejudicial to the interest of the revenue. A show cause notice u/s 263 was issued and served on the assessee through e-mail on 02.02.2021, calling for his objections. Despite proper service of notice, even after lapse of one month, the assessee did not furnish the requisite information or filed any letter, requesting for time to furnish the information. Hence, the Ld.Pr.CIT passed an ex-parte order u/s 263 of the Act.
On being aggrieved, the assessee raised the following grounds :
The revisional proceedings initiated by the Principal Commissioner of Income Tax, Vijayawada (here-in-after referred to as "The Revisional Authority") u/s. 263 of the Income Tax Act, 1961 (here- in-after referred to as "The Act") pursuant to the show cause notice in F.No.2631ACSPB032 1L12020-2 I dated 02-02-202 land/or the consequential final order in dated 15-03-2021 under DIN & document No ITBAIREV/M/REV5/20-21/1031530143(1) against the Assessment order u/s.143(3) of the Income Tax, 1961 (Here-in-after referred to as "The Assessment Order") by the Assistant Commissioner of Income Tax, Circle - 2(1), Guntur (Here-in-after referred to as "The Assessing Authority") dated 21-12-2018 in the PAN/GIR No. ACJPB0321L under Order No. ITA/AST/S/l43(3)/2018-19/1014481495(l) are not sustainable under law and/or under the facts and circumstances of the Appellants case.
The Appellant was not given an opportunity of being heard as 3 I.T.A. No.145/Viz/2021, A.Y.2016-17 Boggavarapu Ankamma Rao
stipulated u/s. 263 of the Act, thus invalidating the proceedings and consequential impugned Revisional Order.
The impugned Revisional Proceedings initiated vide show cause notice dated 02-02-2021 under the premise of the impugned assessment order being erroneous and prejudicial to the revenue. As such the proceedings are bad in law and not conferring to the requirement u/s. 263 of the Act.
The points raised in the impugned show cause notice are not errors and/or not prejudicial to the interest of Revenue more so clause (a) of Explanation 2 to Section 263(1) of the Act is not applicable to the Appellants case.
Under the facts and circumstances of the Appellant's case, the error envisaged to be raised by the Revisional Authority is the result of either a possibility or guess work or both or suspicion, but not an error of fact or law.
Under the facts and circumstances of the Appellants case and the Assessment Records, the order is not erroneous, further; no prejudice caused to the interests of the revenue.
7 The Revisional Authority ought to have considered the fact that the Assessment Order may be brief and cryptic, but that itself is not sufficient reason to brand the Assessment order as erroneous and prejudicial to the interest of the Revenue clause (a) of Explanation 2 to Section 263(1) of the Act.
Under the facts and circumstances of the Appellant's case, the assessment order was passed, after making proper enquiry and verification and examination of various points raised in the revisional proceedings and no error was committed by the Assessing Authority in dealing with the issues raised under the imügti8 Revisional proceedings.
Under the above facts and circumstances, and other facts and circumstances that may be brought to the notice of the Hon'ble Income-Tax Appellate Tribunal at the time of hearing of this Appeal, the Appellant prays the Hon’ble Appellate Tribunal to set aside the impugned Revisional order and to pass such other orders as the Hon'ble Appellate Tribunal deem fit and proper in the interests of justice.
The Appellant crave for the leave of the Hon’ble Appellate Tribunal
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to amend or delete any of the above submitted grounds, or to add any further grounds of appeal. All the grounds of appeal are related to the revisional order passed by the Ld.Pr.CIT u/s 263. It was the submission of the assessee that the Ld.Pr.CIT has not given any opportunity to the assessee to substantiate his claim. It was the further submission of the assessee that due to COVID pandemic, the assessee or his Counsel could not attend before the Ld.Pr.CIT. Therefore, pleaded for one more opportunity of being heard to the assessee before the Ld.Pr.CIT to substantiate his case.
On the other hand, the Ld.DR submitted that notice was sent to the assessee through e-mail, but the assessee did not respond for the same, therefore, there was no other option for the Ld.Pr.CIT, except to pass the order. The Ld.DR strongly relied on the order passed by the Ld.Pr.CIT u/s 263. 5. We have heard both the parties and perused the material placed on record. On perusal of the records, it is an admitted fact that the assessee did not appear before the Ld.Pr.CIT to substantiate his case. The main contention of the assessee is that due to COVID pandemic, the assessee or his counsel could not appear before the Ld.Pr.CIT and the non
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appearance was neither willful negligence nor lapse on the part of the assessee. Therefore, the assessee pleaded for one more opportunity of being heard before the Ld.Pr.CIT. After considering the COVID pandemic situation, we find force in the argument of the assessee and we are of the view that it is a fit case to grant one more opportunity of being heard to the assessee to substantiate his case before the Ld.Pr.CIT. Hence, we set aside the order u/s 263 dated 15.03.2021 passed by the Ld.Pr.CIT for fresh consideration on merits after providing opportunity of being heard to the assessee. The grounds of the assessee are allowed for statistical purpose.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 17th March , 2022. (एस बालाकृष्णन) (दुव्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated : 17.03.2022 L.Rama, SPS
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आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Shri Boggavarapu Ankamma Rao, D.No.1-727, 9th Lane, Pandaripuram, Chilakaluripet 2. रधजस्व/The Revenue – Pr.Commissioner of Income Tax, Vijayawada 3. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम/ DR,ITAT, Visakhapatnam 4.गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam