Smt. Shardaben B. Patel, Ahmedabad V. Pr. CIT, Ahmedabad-5, Ahmedabad

ITA 1026/AHD/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9399 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 24-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Keywords: Opportunity of being heard; Principle of natural justice; Wrong claim; Corroborative evidences; Competent authority; Set aside; Audi alteram partem; Capital Gains
• Section: 143(3); 142(1); 143(1); 263

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1026/AHD/2018 ( ASSESSMENT YEAR : 2013-14) SMT. SHARDABEN B. PATEL D-85, SHAKTIDHAR SOCIETY, INDIA COLONY ROAD, BAPUNAGAR, AHMEDABAD - 380024 / VS. PR. COMMISSIONER OF INCOME TAX-5 1ST FLOOR, NARAYAN CHAMBERS, NEAR PATANG HOTEL, AHMEDABAD - 380009 ./ ./ PAN/GIR NO. : ABCPP5208J ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIJAY MEHTA, A.R. / RESPONDENT BY : SHRI O. P. VAISHNAV, CIT.DR DATE OF HEARING 09/08/2019 !'# / DATE OF PRONOUNCEMENT 25/09/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE IMPUGNING THE REVISIONAL ORDER DATED 21.03.2018 PAS SED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX, AHMEDABAD-5 (PCIT IN SHORT) UNDER S. 263 OF THE INCOME TAX ACT, 1961 (THE ACT) IN CONNECTION WITH THE ASSESSMENT ORDER PASSED BY THE AO UNDER S.143(3) OF THE ACT DA TED 24.07.2015 FOR AY. 2013-14. ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: 1. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TA X (PR. CIT) ERRED IN LAW AND IN FACTS OF THE CASE IN SETTING ASIDE TH E ASSESSMENT ORDER U/S 143(3) DATED 24.07.2015 TO THE FILE OF THE AO A ND IN DIRECTING HIM TO FRAME AN ORDER DE-NOVO. 2. THE LD. PR. CIT ERRED IN LAW AND ON FACTS OF THE CASE IN NOT PROVIDING THE PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT AND THUS IN VIOLATING THE PRINCIPLES OF NATURAL JUS TICE, BEFORE PASSING THE ORDER U/S 263 OF THE INCOME TAX ACT. 3. AS PER THE GROUNDS OF APPEAL, THE ESSENTIAL GRIE VANCE OF THE ASSESSEE IS THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PR.CIT WAS NOT JUSTIFIED IN EXERCISING REVISIONARY POWERS UNDER S. 263 OF THE ACT AND THEREBY SETTING ASIDE THE ASSESSMENT ORDER PASSED U NDER S.143(3) OF THE ACT WITH A DIRECTION TO THE AO TO FRAME ASSESSMENT AFRE SH AFTER PROPER EXAMINATION, INQUIRY AND VERIFICATION WITH REFERENC E TO LONG TERM CAPITAL GAINS OF RS.1,50,69,856/- DERIVED BY THE ASSESSEE. TO ADJUDICATE THE GRIEVANCE OF THE ASSESSEE, IT WOULD BE PERTINENT TO TAKE NOTE OF THE RELEVANT FACTS. 3.1 THE ASSESSEE FILED HER RETURN OF INCOME FOR AY 2013-14, DECLARING TOTAL INCOME AT RS.18,22,490/-. THE ASSESSEE INTER ALIA CLAIMED EXEMPTION UNDER S.10(38) OF THE ACT ON ACCOUNT OF LONG TERM C APITAL GAINS OF RS.1,50,69,856/- ON SALES OF SHARES. THE RETURN FI LED BY THE ASSESSEE WAS SUBJECTED TO SCRUTINY ASSESSMENT AND ASSESSMENT ORD ER WAS FRAMED UNDER S.143(3) OF THE ACT DATED 24.07.2015 WHEREIN THE CA PITAL GAINS SO DECLARED BY THE ASSESSEE WAS DULY ACCEPTED WITHOUT ANY DISTU RBANCE. THE ASSESSMENT SO FRAMED BY THE AO UNDER S.143(3) OF TH E ACT WAS HOWEVER COULD NOT MET APPROVAL OF THE PCIT, WHO INVOKED SUP ERVISIONARY JURISDICTION PROVIDED UNDER S.263 OF THE ACT AND SO UGHT TO MODIFY THE IMPUGNED ORDER PASSED BY THE AO. A SHOW CAUSE NOTI CE DATED 27.02.2018 WAS ACCORDINGLY ISSUED IN THIS REGARD ALLEGING THE AFORESAID ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF THE REVENUE. THE RELEVANT PORTION OF THE SHOW CAUSE NOTICE IS REPROD UCED HEREUNDER: ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 3 - DURING THE COURSE OF SEARCH PROCEEDINGS DETECTION OF OVER 500 CR. HAS BEEN MADE ON THE BASIS OF OFF MARKET PURCHASE OF SH ARES IN BOTH THE SCRIP KGN INDUSTRIES LTD AND KGN ENTERPRISE LTD. WHEREIN THE SALE PROCEEDS OF SHARES WERE NOT BROUGHT THROUGH STOCK EXCHANGE. ON VERIFICATION, IT IS NOTICED THAT THE ASSESSEE HAS BOOKED BOGUS LONG TER M CAPITAL GAIN BY TRANSITION IN THE SHARES OF M/S. KGN ENTERPRISES TO THE TUNE OF RS. 1,50,69,856/-. AT THE TIME OF ASSESSMENT, THIS INFO RMATION OF FRAUDULENT TRANSACTION WAS ON RECORDS OF THE AO BUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAS NOT VERIFIED OR CONDUCTED A NY INQUIRY IN RESPECT OF THE SHARE TRANSACTIONS IN RESPECT OF THE BOGUS C LAIM LTCG AND COMPLETED THE ASSESSMENT. 3.2 AS PER THE SHOW CAUSE NOTICE REPRODUCED ABOVE, THE PCIT ESSENTIALLY OBSERVED THAT THE ASSESSEE HAS BOOKED BOGUS LONG TE RM CAPITAL GAINS IN THE SHARE OF KGN ENTERPRISE LTD. FOR WHICH REQUISITE IN QUIRY WAS NOT CARRIED OUT BY THE AO WHILE COMPLETING THE ASSESSMENT. 3.3 IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSES SEE FILED WRITTEN REPLY WHICH IS REPRODUCED IN PARA 4 OF THE REVISIONAL ORD ER IMPUGNED HEREIN. THE SAME READ AS UNDER: 4. IN RESPONSE TO THE ABOVE NOTICE, THE ASSESSEE F ILED WRITTEN SUBMISSION ON 05/03/2018. IN ITS REPLY THE ASSESSEE HAS MENTIONED THAT THE ASSESSMENT ORDER SHOULD NOT CONSIDERED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND CONSEQUENTLY THE SA ME SHOULD NOT BE SET- ASIDE U/ 263 OF THE ACT OR TO BE FRAMED DE-NOVO AFT ER COMPLETE PROPER ENQUIRIES AND VERIFICATION. THE REPLY GIVEN TO THE AO IS REPRODUCED AS UNDER- I) IT IS MENTIONED IN YOUR CAPTIONED SHOW CAUSE NO TICE THAT, DURING THE COURSE OF SEARCH PROCEEDINGS DETECTION OF OVER 500CR HAS BEEN MADE ON THE BASIS OF OFF MARKET PURCHASE OF SHARES IN BOTH THE SCRIP KGN INDUSTRIES LTD AND KGN ENTERPRISE LTD WHEREIN T HE SALE PROCEEDS OF SHARES WERE NOT BROUGHT THROUGH STOCK E XCHANGE. IN RESPONSE TO THE SAME, I HUMBLY SUBMIT THAT IT IS NO T CLEAR FROM THE SHOW CAUSE NOTICE AS TO ON WHOM THE SEARCH WAS CARR IED AND HOW MY SALE TRANSACTION IS BEING FINKED TO IT. 1 THEREF ORE REQUEST YOU GOOD SELF TO SUPPLY ME FOLLOWING DETAILS: A. WHERE AND IN WHOSE SEARCH WAS CONDUCTED? B. STATEMENT RECORDED OF THE CONCERNED PERSON DURIN G THE SEARCH. C WHAT ARE THE SEIZED MATERIALS OF SEARCH? D. WHAT IS THE OUTCOME IN THEIR SEARCH CASE? E. HOW IS MY TRANSACTION ALLEGED TO BE NOT GENUINE? I HUMBLY REQUEST THAT TILL FULL DETAILS ARE PROVIDE D TO ME, NO PROPER OPPORTUNITY OF BEING HEARD IS CONSIDERED TO BE GIVE N TO ME WHICH IS A MANDATE OF SECTION 263 OF THE ACT. TILL SUCH TIME I REQUEST YOUR ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 4 - GOOD SELF TO TREAT MY REPLY AS AN INTERIM REPLY AND I SHOULD BE ALLOWED TO MAKE FURTHER SUBMISSIONS BASED ON DETAIL S PROVIDED TO ME. FURTHER, IT IS VERY CRUCIAL TO NOTE THAT MY PUR CHASE TRANSACTION WAS MADE FROM A RECOGNIZED BROKER AND THE SALE TRAN SACTIONS THROUGH RECOGNIZED STOCK EXCHANGE 'NSE' AS AGAINST THE ALLEGATION OF SALE NOT BEING ANY STOCK EXCHANGE AS MENTIONED I N YOUR SHOW CAUSE NOTICE. (II) YOUR ATTENTION IS DRAWN TO THE PROVISIONS OF S ECTION 263 OF THE ACT WHICH IS REPRODUCED AS UNDER: THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CAL L FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN B Y THE ASSESSING OFFICER IS ERRONEOUS IN SO FOR AS IT IS P REJUDICIAL TO THE INTEREST OF THE REVENUE, HE MAY, AFTER GIVING T HE ASSESSEE ON OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR C AUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SU CH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, I NCLUDING ON ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CAN CELLING THE ASSESSMENT AND DIRECT A FRESH ASSESSMENT. ' THEREFORE, THE PRE REQUISITE FOR APPLYING THE PROVI SIONS OF SECTION 263 OF THE ACT ARE NOT PRESENT IN MY CASE WHICH IS EXPLAINED AS UNDER. III) YOU HAVE MENTIONED IN YOUR SHOW CAUSE NOTI CE AT PARA 2(I), 'ON VERIFICATION, IT IS NOTICED THAT THE ASSESSEE H AS BOOKED BOGUS LONG TERM GAIN BY TRADING IN THE SHARES OF M/S. KGN ENTERPRISES TO THE TUNE OF RS.1,50,69,856/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAS NOT VERIFIED THE SHARE TRAN SACTIONS IN RESPECT OF THE BOGUS CLAIM OF LTCG. ' IV) I HEREBY, DENY THE OBSERVATION MADE BY YOU AS ABOVE. V) IN THIS CONNECTION, I QUOTE THE QUESTIONNAIRE ( COPY ENCLOSED) ISSUED BY THE AO ENCLOSED WITH NOTICE U/S. 142(1) OF THE A CT DATED 12-06- 2015, WHICH AT QUESTION NO. 7 SPECIFICALLY CALLED F ROM ME AS UNDER: THE DETAILS OF DEMAT ACCOUNT, PURCHASE/SALE OF SHA RES AND SECURITIES ACCOUNT WITH SUPPORTING EVIDENCES.' VI) IN RESPONSE TO THE SAME, I FURNISHED THE DETAI LS CALLED FOR VIDE MY SUBMISSION (COPY ENCLOSED) DATED 08-07-2015, WHEREI N AT POINT NO. 3-5, 1 HAVE SUBMITTED COMPLETE DETAILS OF THE CAPIT AL GAINS MADE BY ME AMOUNTING TO RS. 1,50,69,856/-. THE DETAILS SUBM ITTED BY ME VIDE THIS SUBMISSION IS REPRODUCED AS BELOW: '3. I AM FURNISHING HEREWITH A COPY OF INCOME-TAX R ETURN, COMPUTATION OF INCOME, PROFIT AND LOSS ACCOUNT, BAL ANCE SHEET AND CAPITAL ACCOUNT. 4. DETAIL OF BANK ACCOUNT HELD BY ME IS AS UNDER: ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 5 - NAME OF THE BANK AND BRANCH TYPE OF A/C. A/C. NO. UNION BANK OF INDIA- BAPUNAGAR SAVING 454802010573856 MEHSANA NAGRIK SAHKARI BANK- BAPUNAGAR SAVING 3014 COPY OF BANK PASS BOOKS ORE BANK BOOKS ARE SUBMITTE D HEREWITH. 5. IN RESPECT OF LONG TERM CAPITAL GAIN FROM SHARE TRANSACTIONS, I AM SUBMITTING FOLLOWING DETAILS A. COPY OF LEDGER ACCOUNT OF SHARE TRANSACTIONS B. COPY OF SALES BILLS-12 BILLS C. COPY OF DEBIT NOTE, DELIVERY NOTE, CONFIRMATION END LEDGER ACCOUNT FROM VIJAY BHAGWANDAS & CO. FOR PURCHASE OF SHARES OF KGN ENTERPRISE D. COPY OF LEDGER ACCOUNT FROM INDIA INFOLINE LTD. ' VII) FURTHER, VIDE SUBMISSION DATED 23-07-2015, I S UBMITTED MY DEMAT STATEMENTS REFLECTING THE SAID SCRIP. (COPY ENCLOSE D). VIII) IT IS PERTINENT TO CLARIFY THAT, THE PURCHAS ES WERE MADE THROUGH VIJAY BHAGWANDAS & CO, THE REGISTERED STOCK BROKER UNDER SEBI. DETAILS OF PURCHASES MADE THROUGH THE BROKER AND PR OPER CONFIRMATION FROM THE STOCK BROKER WERE DULY SUBMIT TED TO AO AS REFLECTED IN POINT 6(C) ABOVE. I AM SUBMITTING HERE WITH ANNEXURE REFLECTING SALE AND PURCHASE OF THE SAID SHARES FOR YOUR GOOD SELF S REFERENCE AND RECORD. IX) THESE SHARES WERE HELD IN DEMAT ACCOUNT AND WE RE SUBSEQUENTLY SOLD IN NATIONAL STOCK EXCHANGE ('NSE') THROUGH IND IA INFOIINE LTD. THE DETAILS THEREOF WERE DULY SUBMITTED TO AO AS REFLECTED IN POINT 6(D) ABOVE. X) THE ENTIRE TRANSACTION WAS REFLECTED IN THE BAN K STATEMENT SUBMITTED TO THE AO AS REFLECTED IN POINT 4 ABOVE. XI) THEREFORE, IT GETS CONFIRMED THAT FULL DETAIL S REGARDING PURCHASE/SALE OF SHARES WERE CALLED FOR BY THE AO A ND WERE DULY SUBMITTED BY ME. THE AO SCRUTINIZED ALL THE DETAILS AND SUPPORTING EVIDENCES SUBMITTED BY ME AND ONLY AFTER BEING FULL Y SATISFIED, HE ACCEPTED THE CLAIM OF LONG TERM CAPITAL GAINS AMOUN TING TO RS. 1,50,69,856/-. XII) IN VIEW OF THE ABOVE YOUR HONOUR'S REMARK IN PARA 2(I) FOR YOUR SHOW CAUSE NOTICE DATED 27-02-2018 THAT THE AO HAS NOT VERIFIED THE SAID TRANSACTION AND THEREFORE THE ASSESSMENT O RDER U/S. 143(3) OF THE ACT DATED 24-07-2015 IS ERRONEOUS AND PREJUD ICIAL TO THE INTEREST OF THE REVENUE, THEREBY LIABLE TO BE SET A SIDE, IS NOT CORRECT. ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 6 - XIII) THE AO IS NOT EMPOWERED TO APPLY HIS MIND ON THE SAME ISSUE AGAIN AND AGAIN ESPECIALLY WHEN THE PARTICULAR ISSUE HAS BEEN THOROUGHLY EXAMINED AND AFTER PROPER VERIFICATION THE ASSESSEE 'S CIAIMETIAS BEEN ACCEPTED. XIV) IN VIEW OF THE ABOVE SUBMISSION, IT IS HUMBLY SUBMITTED THAT THE ORDER PASSED U/S. 143(3) OF THE ACT DATED 24-07-201 5 IS NOT ERRONEOUS IN SO FAR AS IT IS NOT PREJUDICIAL TO THE INTERESTS OF THE REVENUE. XV) THEREFORE, NO PROCEEDING U/.S 263 OF THE ACT SHOULD BE INITIATED IN MY CASE SINCE THE AO'S ORDER U/S. 143(3) OF THE ACT DATED 24-07- 2015 DOES NOT REQUIRE ANY MODIFICATION. XVI) WITHOUT PREJUDICE TO ABOVE, IF YOUR HONOUR COM E TO A CONCLUSION FOR ANY REASON TO PROCEED AHEAD WITH THE MATTER, YOU AR E REQUESTED TO VERIFY/EXAMINE MY CLAIM OF CAPITAL GAINS ONCE AGAIN NOW. XVII) KINDLY PLACE THE ABOVE ON RECORD, DROP THE PR OCEEDINGS INITIATED U/S.263 OF THE ACT AND OBLIGE. 3.4 THE PCIT, HOWEVER, WAS NOT IMPRESSED BY THE PLE ADINGS OF THE ASSESSEE. THE PCIT IN BROADER TERMS, OBSERVED IN T HE REVISIONAL ORDER THAT INFORMATION WAS RECEIVED FROM INVESTIGATION WING WI TH REFERENCE TO SEARCH IN THE CASE OF GLOB ECO LOGISTICS GROUP OF AHMEDABA D WHEREBY IT WAS DISCOVERED THAT ASSESSEE IS ONE OF BENEFICIARIES OF BOGUS LONG TERMS CAPITAL GAIN IN THE SHARES OF KGN ENTERPRISE LTD. THE INFO RMATION WAS MADE AVAILABLE TO THE AO ON 01.07.2015 BEFORE THE CONCLU SION OF ASSESSMENT. THE AO HOWEVER HAS FAILED TO MAKE ANY VERIFICATION AND INVESTIGATION IN THIS CASE. IN THE LIGHT OF INFORMATION AVAILABLE A S PER THE REPORT OF THE INVESTIGATION WING, THE PCIT THEREAFTER REFERRED TO THE CONTENTS OF THE REPORT AND OBSERVED THAT AS PER THE REPORT, THE ASS ESSEE IN CONNIVANCE WITH THE BROKERS HAS ABUSED THE PROCESS FOR LAUNDERING H ER UNDISCLOSED INCOME IN THE GARB OF LONG TERM CAPITAL GAIN. IT WAS OBSE RVED THAT THE AO HAS NOT CONDUCTED REQUISITE INQUIRY IN RESPECT OF SUCH LONG TERM CAPITAL GAINS REPORTED BY THE ASSESSEE EXCEPT COLLECTING CUSTOMAR Y DOCUMENTS LIKE CONTRACT NOTES AND CALCULATION OF LONG TERM CAPITAL GAINS ETC. IT WAS ALLEGED THAT THE AO HAS FAILED TO MAKE ANY INQUIRY AS TO WH ETHER THE COMPANY NAMELY KGN ENTERPRISE LTD. POSSESSES ANY ECONOMIC A ND FINANCIAL SUBSTANCE TO JUSTIFY THE PHENOMENAL RISE IN THE SHA RE PRICE AND CONSEQUENT CAPITAL GAINS. THE PCIT THUS ESSENTIALLY NOTED THA T THE AO HAS NOT ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 7 - VENTURED INTO ANY INQUIRY IN RESPECT OF IMPUGNED TR ANSACTIONS AND COMPLETED ASSESSMENT UNDER S.143(3) OF THE ACT MECH ANICALLY AND PERFUNCTORILY. THE PCIT ACCORDINGLY SET ASIDE AND CANCELLED THE ASSESSMENT ORDER AND DIRECTED THE AO TO LOOK INTO T HE FACTUAL ASPECTS AND FINALIZE THE ASSESSMENT AFTER GIVING REASONABLE OPP ORTUNITY TO THE ASSESSEE AND PASS AFRESH ASSESSMENT ORDER IN ACCORDANCE WITH LAW. 4. AGGRIEVED BY THE REVISIONAL DIRECTIONS OF THE PC IT SEEKING TO NULLIFY THE ASSESSMENT ORDER PASSED BY AO IN EXERCISE OF PO WER UNDER S.263 OF THE ACT, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBU NAL. 5. THE LEARNED AR FOR THE ASSESSEE REITERATED VARIO US SUBMISSIONS MADE EARLIER BEFORE THE PCIT AS NOTED IN ITS ORDER AND P OINTED OUT THAT THE JURISDICTION ASSUMED BY THE PCIT IS WITHOUT SANCTIO N OF LAW AND THE REVISIONAL ORDER PASSED THEREON IS UNSUSTAINABLE IN LAW. THE LEARNED AR FOR THE ASSESSEE MADE TWO FOLD OBJECTIONS OF PROCEE DINGS CARRIED OUT UNDER S.263 OF THE ACT; (I) THE ASSESSMENT ORDER IS NEITH ER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE & (II) T HE REVISIONAL ORDER PASSED BY THE PCIT IS IN GROSS VALUATION OF PRINCIPLES OF NATURAL JUSTICE AND THUS NOT TENABLE IN LAW. MOVING FURTHER, THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT ALL DOCUMENTS PERTAINING TO THE TRAN SACTIONS GIVING RISE TO THE PURCHASE AND SALE OF SHARES IN THE POSSESSION O F ASSESSEE WERE PROVIDED TO THE AO IN THE COURSE OF THE ASSESSMENT PROCEEDIN GS. ON RECEIPT OF SUCH DOCUMENTS, IT IS THE PREROGATIVE OF THE AO TO DETER MINE THE EXTENT OF THE INQUIRY THEREON. THE OBSERVATION OF PCIT IS IN THE REALM OF INFERENCE WITHOUT REFERENCE TO ANY FALSITY IN THE DOCUMENTS F ILED. 5.1 THE LEARNED AR THEREAFTER ADVERTED TO SERIOUS L APSE BY THE PCIT WHILE SETTING ASIDE THE ORIGINAL ASSESSMENT ORDER B Y HOLDING IT AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REV ENUE IS CONTEMPLATED UNDER S.263 OF THE ACT. THE LEARNED AR REFERRED TO THE R EVISIONAL ORDER AND SUBMITTED THAT IN PURSUANCE OF THE SHOW CAUSE NOTIC E DATED 27.02.2018, A WRITTEN REPLY WAS PROMPTLY FILED WITHIN A WEEKS TI ME ON 05.03.2018. BY THE AFORESAID REPLY, IT WAS POINTED OUT TO THE PCIT THAT THE SHOW CAUSE ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 8 - NOTICE ISSUED IS NONDESCRIPT AND DO NOT REVEAL THE BASIS FOR MAKING SERIOUS AVERMENTS AGAINST THE ASSESSEE. THE PCIT WAS ACCOR DINGLY REQUESTED TO SUPPLY CERTAIN DETAILS REGARDING THE NAME OF THE PE RSON WHO ARE SEARCHED, THE STATEMENT OF THE PERSON SEARCHED, SEIZED MATERI AL FOUND IN SEARCH AND OUTCOME OF THE SEARCH INCRIMINATING THE ASSESSEE IN SOME MANNER. DELVING FURTHER, THE LEARNED AR POINTED OUT THAT IT WAS SPE CIFICALLY SUBMITTED TO THE PCIT THAT IN THE ABSENCE OF MATERIAL, IT WILL NOT B E POSSIBLE TO MEET THE SHOW CAUSE NOTICE AND THE OBJECT OF GRANTING PROPER OPPORTUNITY OF BEING HEARD AS MANDATED UNDER S.263 OF THE ACT WILL NOT B E FULFILLED. WHILE DOING SO, IT WAS ALSO POINTED OUT TO THE PCIT THAT PURCHASE/SALE TRANSACTIONS WERE MADE THROUGH RECOGNIZED BROKER ON THE PLATFORM OF THE STOCK EXCHANGE AS AGAINST THE ALLEGATION OF THE SAL E NOT RECORDED IN THE STOCK EXCHANGE PLATFORM. 5.2 THE LEARNED AR POINTED OUT THAT THE ASSESSEE EX PRESSLY DENIED THE ALLEGATIONS MADE BY THE PCIT ON LACK OF ENQUIRY AND REFERRED TO THE QUESTIONNAIRE ISSUED BY THE AO ALONGWITH NOTICE UND ER S. 143(1) DATED 12.06.2015 WHEREIN SPECIFIC INQUIRY WAS MADE ON THE ISSUE READS AS UNDER: THE DETAILS OF DEMAT ACCOUNT, PURCHASE/SALE OF SHA RES AND SECURITIES ACCOUNT WITH SUPPORTING EVIDENCES. IT WAS SUBMITTED THAT IN RESPONSE TO THE AFORESAID QUERY, THE ASSESSEE HAS FILED RELEVANT EVIDENCE VIDE SUBMISSION DATED 08.07 .2015. THE DEMAT STATEMENT REFLECTING THE SCRIP IN QUESTION WAS ALSO PROVIDED. THE SHARES WERE HELD IN DEMAT ACCOUNT AND ENTIRE ACCOUNTS WERE REFLECTED IN THE BANK STATEMENT SUBMITTED TO THE AO WHICH IS NOT IN DISPU TE. IT WAS THUS CONTENDED THAT OBSERVATIONS MADE IN THE SHOW CAUSE NOTICE THAT THE AO HAS NOT VERIFIED THE SAID TRANSACTIONS AS WHOLLY INCORR ECT. OUR ATTENTION WAS THEREAFTER ADVERTED TO PARA (XVI) OF THE REPLY AS N OTED IN PARA 5 OF THE REVISIONAL ORDER SEEKING VERIFICATION OF THE CLAIM OF THE LONG TERM CAPITAL GAIN AT THE END OF THE PCIT HIMSELF BEFORE DRAWING ANY ADVERSE CONCLUSION. 5.3 IT WAS THEREAFTER VOCIFEROUSLY SUBMITTED THAT T HE PCIT DID NOT CHOOSE TO RESPOND TO THE MATERIAL ASKED TO SUPPORT THE NON -DESCRIPT SHOW CAUSE NOR ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 9 - DID ANY FURTHER CORRESPONDENCE WITH THE ASSESSEE WH ILE TAKING A DRASTIC STEP OF SETTING ASIDE A STATUTORY ORDER. IT WAS POINTED OUT THAT THE PCIT MERELY DISAGREED WITH THE CONTENTS OF THE REPLY OF THE ASS ESSEE FILED IN PURSUANCE OF SOLITARY SHOW CAUSE AND CAME TO HIS OWN CONCLUSI ONS AND THAT TOO IN UNEQUIVOCAL TERMS. IT WAS POINTED OUT THAT PCIT HI MSELF HAS OBSERVED AND CONCLUDED THAT THE ASSESSEE HAS ABUSED THE PROCESS IN CONNIVANCE OF THE BROKERS AND LAUNDERED HIS OWN UNDISCLOSED INCOME OV ERLOOKING ALL REPLIES MADE AND ALL QUESTIONS RAISED. THE REVISIONAL ORDE R WAS PASSED ON 21.03.2018 I.E. WITHIN A SPAN OF LESS THAN ONE MONT H FROM THE DATE OF ISSUANCE OF SOLITARY NOTICE AND A SINGULAR REPLY TH EREON OF INTERIM NATURE BY THE ASSESSEE AS NARRATED. THE LEARNED AR THUS POIN TED OUT THAT THE TEXT AND TENOR OF THE ORDER OF THE PCIT MAKE IT UNDOUBTEDLY CLEAR THAT THE PCIT HIMSELF HAS REACHED TO AN ADVERSE CONCLUSION WITHOU T ANY OPPORTUNITY AND WITHOUT CONFRONTING MATERIAL IN POSSESSION IN THIS REGARD. IT WAS SUBMITTED THAT THE ACT OF SETTING ASIDE THE ORIGINAL ORDER AN D RETURNING THE MATTER BACK TO THE AO FOR FURTHER INQUIRY IS ONLY AN EMPTY FORM ALITY AND A FARCE WHERE THE ADVERSE CONCLUSION HAS ALREADY BEEN DRAWN. IN T HE LIGHT OF CATEGORICAL ASSERTIONS MADE BY THE PCIT, THE CONCLUSION IS FORG ONE AGAINST THE ASSESSEE AND THE AO WAS LEFT WITH NO DISCRETION BUT TO TOE T HE CONCLUSION ALREADY DRAWN BY THE PCIT WITHOUT ANY DEMUR . THE WHOLE EXERCISE THEREFORE HAS GRIEVOUSLY INJURED THE ASSESSEE AND HAS RESULTED IN IRREPARABLE MISCARRIAGE OF JUSTICE. IT WAS THUS CONCLUDED THAT SUCH ORDER IS A NULLITY IN THE EYE OF LAW. 5.4 THE LEARNED AR IN THIS REGARD REFERRED TO THE D ECISION OF THE CO- ORDINATE BENCH OF TRIBUNAL IN THE CASE OF TATA CHEMICALS LIMITED VS. DCIT ITA NO. 3127/MUM/10 ORDER DATED 30 TH JUNE, 2011 FOR THE PROPOSITION THAT IF THE GROUND OF REVISION IS NOT MENTIONED (SIMILAR TO THE OBSCURE REASONING IN THE INSTANT CASE) IN THE SHOW CAUSE NOTICE, IT C ANNOT BE MADE THE BASIS OF ORDER FOR THE REASON THAT THE ASSESSEE WOULD HAVE N O OPPORTUNITY TO MEET THE POINT. THE LEARNED AR IN THE CONTEXT SUBMITTED THAT THE CO-ORDINATE BENCH HAD HELD THAT IN THE CIRCUMSTANCES AS EXISTIN G IN THE PRESENT CASE, THE INFRINGEMENT OF FUNDAMENTAL PRINCIPLES OF NATURAL J USTICE WOULD RESULT IN THE REVISIONAL ORDER TO BE NULLITY. PARA NOS. 9 & 10 OF THE ORDER OF THE CO- ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 10 - ORDINATE BENCH WAS REFERRED TO BUTTRESS THE PLEA OF THE ORDER RESULTING IN THE NULLITY FOR SUCH SERIOUS BREACH. 5.5 A REFERENCE WAS MADE TO THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF M/S. ANDAMAN TIMBER INDUSTRIES VS. COMMISSIONER OF CENTRAL EXCISE, KOLKATA CIVIL APPEAL NO. 4228 OF 2006 JUDGMENT DATED 02.09.2015 TO CONTEND THAT WHEN THE RATIO OF THE DECISION IS A PPLIED, A SERIOUS FLAW IN NOT ALLOWING THE ASSESSEE TO ACCESS THE BASIS OF SH OW CAUSE NOTICE WHEN PARTICULARLY DISPUTED, WOULD LEAD TO ACTION OF THE PCIT WHOLLY UNTENABLE AND WITHOUT AUTHORITY OF LAW. 5.6 IT WAS REITERATED THAT NO MATERIAL WAS CONFRONT ED TO THE ASSESSEE DESPITE SPECIFIC REQUEST AND THE ORDER WAS PASSED H URRIEDLY WITHOUT ANY OPPORTUNITY BASED ON A NONDESCRIPT SHOW CAUSE NOTIC E AND GIVING UNILATERAL CONCLUSIVE FINDING AGAINST THE ASSESSEE THEREBY TOT ALLY CURTAILING THE STATUTORY DISCRETION OF THE AO. SUCH ACT OF THE PC IT IS NOT IN CONSONANCE WITH AUTHORITATIVE JUDICIAL PRONOUNCEMENT MADE IN T HIS REGARD. A REFERENCE WAS MADE TO YET ANOTHER DECISION OF THE HONBLE SUP REME COURT IN CIT VS. AMITABH BACHCHAN (2016) 384 ITR 200 (SC) TO CONTEND THAT OPPORTUNITY TO THE ASSESSEE TO BE HEARD ON ALL ISSUES IS MANDATORY AND CONCLUSIONS DRAWN ADVERSE TO THE ASSESSEE IN THE ORDER OF REVISION ON ISSUES NOT MENTIONED IN THE NOTICE IS IMPERMISSIBLE. IT WAS CONTENDED THAT THE SATISFACTION TO EXERCISE JURISDICTION UNDER S.263 OF THE ACT IS AVA ILABLE SUBJECT TO THE STRICT OBSERVANCE OF PRINCIPLE OF NATURAL JUSTICE WHICH IS INGRAINED IN THE REQUIREMENT OF THE SECTION ITSELF. 5.7 DWELLING FURTHER, THE LEARNED AR SUBMITTED THAT THE BREACH OF PRINCIPLE OF NATURAL JUSTICE CAN TYPICALLY HAPPEN I N TWO WAYS; (I) THE COMPETENT AUTHORITY PASSES ORDER WITHOUT GIVING REA SONABLE OPPORTUNITY TO DEAL WITH THE POINTS RAISED AND FACTS IN ISSUE OR ( II) PASSES ORDER WITHOUT REVEALING THE FACTS ITSELF DESPITE HAVING INQUIRED INTO BY THE ASSESSEE. THE CASE OF THE ASSESSEE FALLS IN THE SECOND CATEGORY O F BREACH WHICH IS FAR MORE STRINGENT AND HAS OUTRIGHTLY DEPRIVED THE ASSE SSEE OF HER RIGHT TO MAKE ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 11 - ANY EFFECTIVE REPRESENTATION TO DEFEND HER CASE AS CONTEMPLATED IN THE PROVISIONS OF SECTION 263 OF THE ACT. 5.8 MOUNTING HIS DEFENSE FURTHER, THE LEARNED AR TH EREAFTER REFERRED TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ITO VS D. G. HOUSING PROJECT LTD. (2012) 343 ITR 329 (DEL) AND CONTENDED THAT THE REVISIONAL COMMISSIONER CANNOT REMIT THE MATTER FOR A FRESH DECISION TO THE AO TO CONDUCT FURTHER INQUIRIES WITHOUT MAKING SOME MINIMAL INQUIRY HIMSELF AND COME TO SOME PRIMA FACIE CONCLUSION THAT TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED. IN THE INST ANT CASE, THE CONSIDERATION OF REVISIONAL COMMISSIONER AS TO WHET HER AN ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE IS NOT BASED ON UNDERLYING MATERIAL TO IMPLICATE THE ASSES SEE IN SOME MANNER. DESPITE BEING INQUIRED, THE PCIT HAS NOT ALLOWED TH E ASSESSEE TO PARTICIPATE IN THE PROCESS OF INQUIRY BEFORE HIM NO R HAS THE PCIT MADE ANY INQUIRY TO DEMONSTRATE THE ALLEGED ERROR OR MISTAKE MADE BY THE AO AS HELD SO ASSERTIVELY IN THE REVISIONAL ORDER. THE LEARNED AR NEXT CONTENDED THAT THE PRESENT CASE AT BEST CAN BE DUBBED AS THE CASE OF INADEQUATE INVESTIGATION OR INQUIRY AND NOT A CASE OF TOTAL LA CK OF INQUIRY PER SE IN THE LIGHT OF THE RELEVANT MATERIAL PLACED BEFORE HIM AG AINST A SPECIFIC QUERY. IT WAS THUS CONTENDED THAT VIEWED FROM ANY ANGLE THE R IVISIONAL ACTION OF THE PCIT LAYING BLAME ON THE DOORSTEP OF ASSESSEE IS NO T JUSTIFIED. 5.9 THE LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE PCIT SUBMITTED THAT A STANDARD QUESTIONNAIRE PUTTING FEW LINES WITH RESPECT TO THE TRANSACTIONS OF CAPITAL GAIN IN QUESTION WOULD NOT GIVE RISE TO AN INFERENCE OF AN INQUIRY CONTEMPLATED IN LAW THAT HA S TO BE CARRIED OUT. IT WAS CONTENDED THAT SUBSEQUENT TO THE RECEIPT OF INV ESTIGATION REPORT ON 01.07.2015 NO INQUIRY WAS MADE BY THE AO IN CONNECT ION WITH THE ISSUE IN QUESTION AND THEREFORE THE ORDER OF THE AO CLEARLY SUFFERS FROM GROSS LACK OF INQUIRY RENDERING IT ERRONEOUS IN SO FAR AS PREJ UDICIAL TO THE INTEREST OF THE REVENUE. THE LEARNED DR ALSO SUBMITTED THAT TH E MATTER WAS SET ASIDE TO THE AO AND THUS NO SERIOUS PREJUDICE HAS BEEN CA USED TO THE ASSESSEE. IT ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 12 - WAS THUS CONTENDED THAT NO INTERFERENCE WITH THE RE VISIONAL ORDER OF THE PCIT IS CALLED FOR. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE ASSESSEE HAS CHALLENGED THE ASSUMPTION OF REVISIONARY JURISDICTI ON UNDER S.263 OF THE ACT AS WELL AS MADE IMPUTATIONS ON THE SERIOUS LAPS E IN ABIDING BY EXPRESS MANDATE OF OPPORTUNITY TO ASSESSEE, WHILE SETTING A SIDE STATUTORY ORDER OF THE LOWER AUTHORITIES. THE ASSESSEE HAS DELINEATED ON ASPECTS OF PRINCIPLES OF NATURAL JUSTICE AT LENGTH AND HAS ESSENTIALLY CO NTENDED THAT SUCH GROSS NEGLECT IN PROVIDING EFFECTIVE OPPORTUNITY AND SERI OUS TRANSGRESSION OF PRINCIPLES OF NATURAL JUSTICE TANTAMOUNT TO ILLEGAL ITY AND CONSEQUENTLY THE REVISIONAL ORDER SETTING ASIDE THE ASSESSMENT ORDER PASSED BY AO IS NOT SUSTAINABLE IN LAW. 6.1 HAVING REGARD TO THE LENGTHY AND ARDENT DEFENSE ON BEHALF OF THE ASSESSEE, WE CONSIDER IT EXPEDIENT TO DELINEATE ON THE IMPACT OF PALPABLE FLAW IN FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE ALLEGEDLY COMMITTED BY THE REVISIONAL COMMISSIONER. IT IS THE CASE OF THE ASSESSEE THAT A SOLITARY SHOW CAUSE NOTICE WAS ISSUED BY THE REVISIONAL COMM ISSIONER ON 27.02.2018 SEEKING TO DISPLACE THE ASSESSMENT ORDER PASSED BY THE AO UNDER S.143(3) OF THE ACT IN EXERCISE OF ITS STATUT ORY FUNCTIONS. THE ASSESSEE FILED A REPLY THERETO WITHIN A WEEKS TIME STRONGLY OBJECTING TO THE AVERMENTS MADE IN THE SHOW CAUSE NOTICE AND ASKED F OR THE RELEVANT BACKGROUND MATERIAL TO DERIVE AN UNDERSTANDING ON T HE ALLEGATIONS MADE IN THE SHOW CAUSE NOTICE TO ENABLE IT TO DEFEND ITS CA SE IN AN EFFECTIVE MANNER. THE ASSESSEE HAS ALSO ALLEGED THAT THE SHOW CAUSE N OTICE ITSELF IS VAGUE AND NONDESCRIPT WITHOUT ANY REFERENCE TO ANY OBJECTIVE INFORMATION OR MATERIAL FOR MAKING AN ALLEGATION ADVERSE TO THE ASSESSEE. IT IS THUS THE CASE OF THE ASSESSEE THAT THE SOLITARY SHOW CAUSE NOTICE ISSUED BY THE PCIT IS NOT FOCUSED ON THE ISSUE WITH DESIRED OBJECTIVITY AND T HE SAME IS CRYPTIC AND UNINTELLIGIBLE. THE ASSESSEE THUS RESERVED ITS RIG HT TO SUBMIT PROPER REPLY ON ADDRESSING REDDRESSAL OF THE POINTS RAISED IN IN TERIM REPLY BY THE PCIT. NO CORRESPONDENCE HAS BEEN EXCHANGED THEREAFTER. T HE WHOLE ACTION IS MARRED BY LACK OF OPPORTUNITY. ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 13 - 6.2 WE NOTICE FROM THE CASE RECORDS THAT ONLY A SOL ITARY NOTICE WAS ISSUED TO GIVING OPPORTUNITY TO THE ASSESSEE TO DIS CUSS AS TO WHY ACTION UNDER S.263 OF THE ACT SHOULD NOT BE UNDERTAKEN. A S NOTED, THE ASSESSEE IN ITS IMMEDIATE REPLY HAS POINTED OUT LACK OF CLARITY IN THE SHOW CAUSE NOTICE ON VITAL ASPECTS AND SOUGHT THE PARTICULARS THEREOF ALONGWITH REQUISITE MATERIAL FOR PROPER REPLY AND SUBMITTED THAT THE PR ESENT REPLY SHOULD BE TREATED AS INTERIM REPLY WITH A CAVEAT TO MAKE FURT HER SUBMISSIONS ON OBTAINING REQUISITE DETAILS AS MENTIONED IN THE REP LY. IT IS ALSO NOTICED THAT THE ASSESSEE HAS ALSO POINTED OUT FACTUAL INCORRECT NESS IN THE ASSERTIONS MADE IN THE SHOW CAUSE NOTICE VIZ. THE ALLEGATION O F SALES NOT BEING THROUGH STOCK EXCHANGE IS INCORRECT. 6.3 WE ALSO NOTICE THAT THE ASSESSEE HAS ALSO DEMON STRATED THAT ALL PRIMARY DOCUMENTS IN RELATION TO THE LONG TERM CAPI TAL GAINS WERE DULY PROVIDED TO THE AO WITHOUT ANY DEMUR WHICH REFLECTED THE OCCURRENCE OF TRANSACTIONS IN NORMAL COURSE ON THE PLATFORM OF TH E STOCK EXCHANGE. THE REVISIONAL COMMISSIONER HOWEVER HAS JETTISONED ALL THE CONTENTIONS OF THE ASSESSEE RAISED AS PER ITS INTERIM REPLY BUT REMAIN ED SILENT AS TO WHY FURTHER OPPORTUNITY IS NOT REQUIRED AND WHY THE MAT ERIAL CALLED FOR CANNOT BE SUPPLIED FOR EFFECTIVE REPRESENTATION. AS NOTIC ED, THE PCIT HEAVILY RELIED ON CERTAIN INFORMATION RECEIVED FROM INVESTI GATION WING IN THE SEARCH PROCEEDINGS IN THE CASE OF A THIRD PARTY. T HE DETAILS OF INFORMATION RECEIVED WERE NOT PROVIDED TO THE ASSESSEE AT ALL A T ANY STAGE OF THE PROCEEDINGS. AS PER PARA 8 OF THE REVISIONAL ORDER , THE PCIT HAS RELIED UPON THE SO-CALLED INFORMATION PURPORTEDLY RECEIVED WITH WHICH NO-ONE IS PRIVY TO. THE WHOLE ACTION IS THUS SELF-VIRTUOUS A ND REPUGNANT. SIGNIFICANTLY, THE PCIT HAS CONCLUDED IN UNEQUIVOCA L TERMS AND WITH A DEGREE OF FINALITY THAT THE ASSESSEE IN CONNIVANCE WITH THE BROKERS HAS ABUSED THE PROCESS FOR LAUNDERING HER UNDISCLOSED I NCOME IN THE GARB OF BOGUS LONG TERM CAPITAL GAINS. THE ASSERTIONS MADE IN THE REVISIONAL ORDER AGAINST THE ASSESSEE CLEARLY FORECLOSES THE CASE AG AINST THE ASSESSEE WITH FINALITY LEAVING NO SCOPE WITH THE AO TO APPLY HIS OWN MIND, WHILE DIRECTING HIM TO MAKE ALL INQUIRIES AND INVESTIGATI ONS. THE DIRECTION TO AO MAKE INQUIRIES IS OSTENSIBLY AN EMPTY FORMALITY LEA VING NO LIBERTY WITH AO ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 14 - TO THINK DIFFERENTLY. THE RESULT IS THUS A FOREGONE CONCLUSION. THE DIRECTION TO MAKE ENQUIRY CLEARLY LACKS PURPOSE. EXCEPT THE SOLITARY CORRESPONDENCE, THERE IS NO REFERENCE TO ANY OTHER OPPORTUNITY. TH E WHOLE PROCESS HAS BEGUN WITH SHOW CAUSE NOTICE AND CULMINATED WITH A HURRIED REVISIONAL ORDER IN ABOUT A MONTHS TIME BASED ON ONE CORRESPO NDENCE OF INCOMPLETE AND SHALLOW NATURE. 6.4 IN THIS BACKDROP, WE NEED TO ASCERTAIN THE JUST IFICATION IN THE ACTION OF THE PCIT. 6.5 IT IS OSTENSIBLE FROM THE SEQUENCE OF EVENTS TH AT THE ACTION OF THE REVISIONAL COMMISSIONER IS IN NEGATION OF OVERRIDIN G PRINCIPLES OF NATURAL JUSTICE WHICH WERE EXPLICITLY REQUIRED TO BE FOLLOW ED WHILE EXERCISING AUTHORITY UNDER S.263 OF THE ACT. SECTION 263 OF T HE ACT EXPRESSLY PROVIDES FOR GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASS ESSEE BEFORE PASSING REVISIONAL ORDER. SUCH OPPORTUNITY THUS HAS SERIOU S CONNOTATIONS IN THE CONTEXT OF REVISIONAL JURISDICTION. THE OBJECT IS OBVIOUS, IT IS MEANT TO ENABLE THE ASSESSEE TO UNDERSTAND WHAT IS WEIGHED A GAINST HIM TO SUITABLY DEFEND HIS POSITION. NEEDLESS TO SAY, THE OPPORTUN ITY TO BE GIVEN TO THE ASSESSEE MUST BE REAL, EFFECTIVE AND REALISTIC. A NOTIONAL OPPORTUNITY WOULD TANTAMOUNT TO A MERE EMPTY FORMALITY AND WOUL D NATURALLY NOT MEET THE EXPRESS INTENT OF LAW. THE REVISIONAL CIT HAS CHOSEN TO REMAIN SILENT ON THE CONTENTS OF INTERIM REPLY FILED BY THE ASSES SEE. AS QUIPPED ON BEHALF OF ASSESSEE, THE VAGUENESS AND AMBIGUITY IN THE SHOW CAUSE NOTICE HAS DEFEATED THE RIGHT OF REASONABLE OPPORTUNITY OF THE ASSESSEE TO EFFECTIVELY DEFEND ITS CASE. THUS, ALLEGATION OF S HOW CAUSE NOTICE BEING ILLUSORY IS SOMEWHAT STARK. THE BASIC CANONS OF NA TURAL JUSTICE ARE FOUND TO BE DISPENSED WITH. 6.6 IT IS TRITE THAT THE RIGHT TO FAIR HEARING IS A GUARANTEED RIGHT OF AN ASSESSEE. EVERY PERSON BEFORE AUTHORITY EXERCISING ADJUDICATORY POWERS HAS A RIGHT TO KNOW THE EVIDENCE TO BE USED AGAINST HIM. THE SUPPLY OF DOCUMENTS RELIED UPON WOULD, IN OUR VIEW, BE NECESS ARY TO SET THE LAW IN MOTION. IT IS DIFFICULT TO COMPREHEND FULL FACTS FR OM THE SHOW CAUSE NOTICE ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 15 - AND CONSEQUENTLY INSISTENCE FOR SUPPLY OF RELEVANT INFORMATION POSSESSED BY THE REVISIONAL AUTHORITY CANNOT BE REGARDED AS U NREASONABLE INSISTENCE. THE LETTER OF LAW IN SECTION 263 OF THE ACT IS EXPR ESS AND FOUNDED ON THE PRINCIPLES OF NATURAL JUSTICE, WHICH IN THE PRESENT CASE IS SCANTLY FULFILLED. THE ACTION OF THE REVISIONAL COMMISSIONER WAS CONTI NUED IN VIOLATION OF THIS CARDINAL REQUIREMENT. THE ASSESSEE IS SOUGHT T O BE VISITED WITH THE CIVIL CONSEQUENCES ON THE BASIS OF SYMBOLIC COMPLIA NCE OF THE REQUIREMENT. THE CONTEXT HOLDS THE KEY WHILE EXAMINING THE EXTEN T TO WHICH THE VIOLATION OF NATURAL JUSTICE HAS IMPACTED THE OTHER SIDE. A GRANTING OF EFFECTIVE OPPORTUNITY IS A SIN QUA NON IN SECTION 263 OF THE ACT FOR UNSETTING A STATUTORY ORDER. IT IS THE DUTY OF THE REVISIONAL COMMISSIONER TO PROVIDE THE ASSESSEE AN EFFECTIVE OPPORTUNITY TO ENABLE IT TO DISENGAGE THE TRUTH FROM WRONGS INSTEAD OF TAKING AN EASY COU RSE OF REJECTING THE REPLY IN ITS ENTIRELY SOLELY ON THE GROUND THAT SAM E IS NOT ACCEPTABLE. AT THIS JUNCTURE, IT WOULD BE PERTINENT TO QUOTE THE O BSERVATIONS OF THE CO- ORDINATE BENCH IN TATA CHEMICALS LIMITED VS. DCIT ITA NO. 3127/MUM/10 ORDER DATED 30 TH JUNE, 2011 AS EXTRACTED BELOW: 9. IN THE CASE OF SYNERGY ENTERPRISES SOLUTIONS PV T LTD VS DCIT (ITA NO 2076/MUM/2010; ORDER DATED 31' MARCH 2011], A CO ORDINATE BENCH HAD AN OCCASION TO DEAL WITH A MATERIALLY IDENTICAL SITUATION. AS HELD IN THIS DECISION, FOLLOWING MAXPACK INVESTMENTS 13 SOT 67 (DEL), G.K. KABRA 211 ITR 336 (AP) AND JAGADHRI ELECTRIC SUPPLY 140 ITR 490 (P&H), IF A GROUND OF REVISION IS NOT MENTIONED IN THE SHOW-CAUSE NOTICE, IT CANNOT BE MADE THE BASIS OF THE ORDER FOR THE RE ASON THAT THE ASSESSEE WOULD HAVE HAD NO OPPORTUNITY TO MEET THE POINT . W HILE LEARNED DEPARTMENTAL REPRESENTATIVE DOES NOT DISPUTE THIS P OSITION AND THAT DECISION OF THE COORDINATE BENCH SQUARELY COVERS TH E ISSUE, HE URGES US TO AT BEST REMIT THE MATTER TO THE FILE OF THE CIT SO AS THE ASSESSEE CAN BE GIVEN AN OPPORTUNITY TO MEET THE POINT ON WHICH REV ISION POWERS ARE EXERCISED, EVEN THOUGH, ACCORDING TO THE LEARNED DE PARTMENTAL REPRESENTATIVE, STRICTLY SPEAKING EVEN THIS PARTIAL RELIEF IS NOT DUE TO THE ASSESSE BECAUSE SUBJECT MATTER OF THE REVISION HAS REMAINED THE SAME AS WAS SET OUT IN THE NOTICE, I.E. DEDUCTION UNDER SEC TION 80 IA IN RESPECT OF NOTIONAL SALE OF STEAM. WE ARE UNABLE TO SEE ANY LE GALLY SUSTAINABLE MERITS IN THE STAND OF THE LEARNED DEPARTMENTAL REP RESENTATIVE. WHILE SUBJECT MATTER OF REVISION MAY HAVE BEEN THE SAME A S IN THE SHOW CAUSE NOTICE, THE GROUND ON WHICH REVISION WAS SOUGHT TO BE DONE IN THE SHOW CAUSE NOTICE IS MATERIALLY DIFFERENT THAN THE GROUN D ON WHICH REVISION POWERS ARC ACTUALLY EXERCISED. AS SUCH, ASSESSEE HA D NO OPPORTUNITY TO DEFEND ON THE GROUND WHICH IS ULTIMATELY DECIDED AG AINST HIM. IT IS WELL SETTLED LEGAL POSITION, AS WE HAVE SEEN IN THE ERUD ITE DISCUSSIONS IN MAXPACK DECISION (SUPRA), THAT REVISION POWERS CAN NOT BE EXERCISED ON A GROUND WHICH HAS NOT BEEN PUT TO THE ASSESSEE. IN A NY CASE, IT IS ONE OF THE ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 16 - FUNDAMENTAL PRINCIPLES OF NATURAL JUSTICE THAT NO P ERSON CAN BE CONDEMNED UNHEARD I,E AUDI ALTERANT PARTEM, AND THE IMPUGNED REVISION ORDER WAS THUS PASSED IN VIOLATION OF THE PRINCIPLE S OF NATURAL JUSTICE. AS FOR THE PLEA THAT THE MATTER SHOULD BE REMITTED TO THE FILE OF THE LEARNED COMMISSIONER FOR AFFORDING THE ASSESSEE AN OPPORTUN ITY OF HEARING, WE FIND WHAT IS IN CHALLENGE BEFORE US IS THE REVISION ORDER PASSED BY THE LEARNED COMMISSIONER, AND, AS WE HAVE NOTED ABOVE, THE SAID ORDER IS LEGALLY UNSUSTAINABLE IN LAW, AND QUASHED ACCORDING LY. AS OBSERVED BY A SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF COLON IZERS VS. ACIT (41 1TD SB 57), THE VIOLATION OF PRINCIPLES OF JUSTICE, AS HAS HAPPENED IN THIS CASE, RESULTS IN AN ORDER BEING RENDERED NULL AND VOID. T HE SPECIAL BENCH HAS, INTER ALIA, OBSERVED AS FOLLOWS: AS IT HAS BEEN DISCUSSED IN THE EARLIER PARAGRAPH T HERE ARE PLETHORA OF CASES HOLDING THAT VIOLATION OF PRINCIPLES OF NA TURAL JUSTICE MAKES THE DECISION VOID AS IN EVERY OTHER CASE ULTR A VIRES. THE RULES OF NATURAL JUSTICE OPERATE AS IMPLIED MANDATO RY REQUIREMENT, NON-OBSERVANCE OF WHICH AMOUNTS TO ARBITRARINESS AN D DISCRIMINATION. THE PRINCIPLES OF NATURAL JUSTICE H AVE BEEN ELEVATED TO THE STATUS OF FUNDAMENTAL RIGHTS GUARANTEED IN T HE CONSTITUTION OF INDIA AS IS EVIDENT FROM THE DECISION OF THE FUL L BENCH OF THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. TULSIRAM PATEL & ORS. REPORTED IN AIR 1985 SC1416 AT 1469, H OLDING THAT THE PRINCIPLE OF NATURAL JUSTICE HAVE THUS COME TO BE RECOGNISED AS BEING A PAN OF THE GUARANTEE CONTAINED IN ARTICLE 1 4 OF THE CONSTITUTION OF INDIA BECAUSE OF THE NEW AND DYNAMI C INTERPRETATION GIVEN BY THE SUPREME COURT TO THE CO NCEPT OF EQUALITY WHICH IS THE SUBJECT-MATTER OF THAT ARTICL E AND THAT VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BY A STA TE ACTION IS A VIOLATION OF ARTICLE 14, A QUASI-JUDICIAL OR ADMINI STRATIVE DECISION RENDERED OR AN ORDER MADE IN VIOLATION OF THE RULE OF AUDI ALTERAM PARTEM IS NULL AND VOID AND THE ORDER MADE IN SUCH A CASE CAN BE STRUCK DOWN AS INVALID ON THAT SCORE ALONE (MANEKA GANDHI VS. UNION OF INDIA AIR 1978 SC 597; GANGADHARAN PILLAI VS. ACED (1978) 8 CTR (KER) 352 : (1980) 126 ITR 356 (KER) A T PP. 365 TO 367). IN OTHER WORDS, THE ORDER WHICH INFRINGES THE FUNDAMENTAL PRINCIPLE, PASSED IN VIOLATION OF AUDI ALTERAM PART EM RULE, IS A NULLITY. WHEN A COMPETENT COURT OR AUTHORITY HOLDS SUCH AN ORDER AS INVALID OR SETS IT ASIDE, THE IMPUGNED ORDER BEC OMES NULL AND VOID. (NB. KHAN ABBAS KHAN VS. STATE OF GUJARAT AIR 1974 SC 1471 AT 1479). 10. ONCE WE COME TO THE CONCLUSION THAT THE IMPUGNE D ORDER IS NULL AND VOID, IT IS NOT FOR US TO ADVISE THE COMMISSIONER A S TO WHAT SHOULD HE DO. HE IS ALWAYS AT LIBERTY TO DO WHATEVER ACTION HE CA N TAKE IN ACCORDANCE WITH THE LAW, BUT WE CANNOT GIVE LIFE TO A NULL AND VOID ORDER BY REMITTING IT BACK TO THE LEARNED COMMISSIONER FOR GIVING AN O PPORTUNITY OF PASSING THE FRESH ORDER AFTER GIVING THE ASSESSEE AN OPPORT UNITY OF HEARING. IN CASE, IT IS POSSIBLE FOR THE COMMISSIONER TO PASS A FRESH ORDER AT THIS STAGE, IN ACCORDANCE WITH THE SCHEME OF THE ACT, HE CAN VERY WELL DO SO, BUT IN CASE THE TIME LIMIT FOR PASSING SUCH ORDER H AS ALREADY EXPIRED, WE CANNOT EXTEND THE SAME BY DIRECTING HIM TO PASS THE ORDER AFRESH AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. A S FOR LEARNED DEPARTMENTAL REPRESENTATIVE'S SUGGESTION THAT NO RE AL PREJUDICE IS CAUSED TO THE LEGITIMATE INTERESTS OF THE ASSESSEE SINCE B Y WAY OF IMPUGNED ORDER ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 17 - LEARNED COMMISSIONER HAS ONLY DIRECTED FRESH DECISI ON OF THE ASSESSING OFFICER ON MERITS AND IN ACCORDANCE WITH THE LAW, A LL WE CAN SAY IS THAT IF WE ARE TO UPHOLD SUCH A CONTENTION, WE WILL HAVE BU RY THE CONCEPT OF FINALITY OF ASSESSMENT DEEP AND IGNORE THE STATUTOR Y LIMITATIONS ON THE POWERS OF THE REVENUE AUTHORITIES TO TINKER WITH TH E ASSESSMENTS ALTOGETHER. LEARNED DEPARTMENTAL REPRESENTATIVE'S A RGUMENT IS THUS CLEARLY CONTRARY TO THE SCHEME OF THE ACT. FOR ALL THESE REASONS, WE REJECT THE SUBMISSIONS OF THE DEPARTMENTAL REPRESENTATIVES , AND QUASH THE IMPUGNED REVISION ORDER ON THE GROUND THAT THE REVI SION IS DONE ON A GROUND OTHER THAN THE GROUND SET OUT IN THE SHOW CA USE NOTICE. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. HOWEVER, AS W E HAVE QUASHED THE IMPUGNED REVISION ORDER ON THE TECHNICAL GROUND SET OUT ABOVE, WE SEE NO NEED TO DEAL WITH THE MERITS OF OTHER ARGUMENTS RAI SED BY THE ASSESSEE. THE CO-ORDINATE BENCH HAS THUS CONCLUDED THAT SUCH LACK OF OPPORTUNITY WOULD RENDER THE REVISIONAL ORDER A NULLITY AND ACC ORDINGLY QUASHED THE REVISIONAL ORDER. 6.7 TO REITERATE, THE GROUNDS FOR REVISION IN THE S HOW CAUSE NOTICE IS VAGUE AND OPPORTUNITY GIVEN TO THE ASSESSEE IS EFFE CTIVELY NO OPPORTUNITY DESPITE EXPRESS REQUEST. THE ACTION OF THE REVISION AL COMMISSIONER IN VIOLATION OF THE EXPRESS MANDATE OF SECTION 263 OF THE ACT CANNOT THUS BE COUNTENANCED. A QUESTION MAY MOMENTARILY ARISE THA T THE GAFFES IN FOLLOWING PRINCIPLES OF NATURAL JUSTICE IS ONLY A P ROCEDURAL IRREGULARITY AND THEREFORE MATTER SHOULD BE RESTORED TO THE FILE OF THE PCIT TO RESTART THE PROCEEDINGS FROM THE PLACE WHERE THE IRREGULARITY H AS OCCURRED. WE ARE NOT INCLINED TO AGREE. THE OPPORTUNITY WAS SPECIFICALLY SOUGHT BUT DENIED. THE BREACH OF SACROSANCT OPPORTUNITY EXPRESSLY ENJOINED BY THE LEGISLATURE IN SECTION 263 OF THE ACT IS FUNDAMENTAL AND GOES TO T HE ROOT OF THE ISSUE. IT IS NOT OPEN TO PROCEED TO FRAME THE REVISIONAL ORDE R BY OVERRIDING EXPRESS INTENT OF LAW. SUCH FLAW IS FATAL WHICH SEEKS TO E NSUE CIVIL CONSEQUENCES AND EFFECTS THE RIGHTS OF THE ASSESSEE IN A COMPLET ED MATTER. THE PROVISIONS OF SECTION 263 OF THE ACT EXPRESSLY ENJOIN PROVIDIN G OPPORTUNITY. THE ASSESSEE HAD ON ITS PART HAS EXERCISED ITS RIGHT TO SEEK BACKGROUND INFORMATION TO ENABLE IT TO FILE AN INFORMED DEFENS E. THE DISSUASION OF SUCH CATEGORICAL REQUEST RENDERS THE ACTION OF THE REVISIONAL COMMISSIONER INCOMPETENT IN LAW. THE TOTAL ABSENCE OF OPPORTUNI TY ALONE RENDERS THE REVISIONAL ORDER NULL AND VOID. ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 18 - 6.8 WE HOWEVER ALSO PEEP INTO ANOTHER LINE OF DEFEN SE ON BEHALF OF THE ASSESSEE. THE ASSESSEE HAS ADMITTEDLY FILED THE PR IMARY EVIDENCE IN THE COURSE OF THE ASSESSMENT. THE PCIT HOWEVER SEEKS T O RELY UPON CERTAIN ADDITIONAL INFORMATION WHICH APPEARS TO TRANSCEND T HE BONAFIDES OF THE TRANSACTIONS. IT WAS THUS INCUMBENT UPON THE PCIT TO UNDERTAKE A MINIMAL INQUIRY HIMSELF WITH REGARD TO THE CLAIM OF BONAFID ES BEFORE REMANDING THE MATTER BACK TO THE AO. 6.9 MOST SIGNIFICANTLY, IN THE INSTANT CASE, AS NOT ED ABOVE, THE MATTER HAS BEEN REMANDED TO ACTUALLY CARRY OUT THE CONCLUSIONS ALREADY DRAWN BY THE PCIT UNILATERALLY WHICH CONCLUSIONS GIVES THE INFAL LIBLE IMPRESSION OF IT BEING ABSOLUTE AND RIGID. THE PCIT HAS THUS ACTUAL LY FORECLOSED THE MATTER WITHOUT OPPORTUNITY. THEREFORE, THE WHOLE EXERCISE OF REMANDING THE MATTER BACK TO THE AO IS ONLY A PRETENSE AND AN EMP TY FORMALITY. SUCH ACT OF THE PCIT THUS CANNOT BE ENDORSED WHEN SEEN IN EN TIRETY. THE CONTENTIONS OF THE ASSESSEE ON PALPABLE ILLEGALITY IN THE ORDER PASSED UNDER S.263 OF THE ACT MERITS ACCEPTANCE. 6.10 TO SUM UP, THE REVISIONAL ACTION UNDER SECTION 263 OF THE ACT IN UNSUSTAINABLE IN LAW ON TWO COUNTS; (I) A REVISIONA L ACTION WHICH BEGAN WITH A NONDESCRIPT NOTICE AND CULMINATED IN REVISIO NAL ORDER WITHOUT ANY EFFECTIVE OPPORTUNITY DESPITE SPECIFIC REQUEST IS A N ORDER PASSED IN BLATANT TRANSGRESSION OF NATURAL JUSTICE & (II) THE REVISI ONAL CIT MADE AN UNFLINCHING AND ADVERSE CONCLUSION IN THE LEAGUE OF FINALITY (WITHOUT GRANTING ANY OPPORTUNITY) AND CLOSED THE DOOR FOR T HE ASSESSEE BEFORE THE AO WHILE SETTING ASIDE THE ORDER OF AO. THE ENQUIR Y OR INVESTIGATION SET IN MOTION IN THE PROCEEDINGS BEFORE THE AO IN PURSUANC E TO THE REVISIONAL ORDER IS CLEARLY A PRETENSE AND AN EMPTY FORMALITY. THE AO WAS EFFECTIVELY ASKED TO OBDURATELY ADHERE TO THE PRE-CONCEIVED OBS ERVATIONS MADE IN THE REVISIONAL ORDER OF EX PARTE NATURE. SUCH DIRECTIONS ARE CLEARLY UNSUSTAINABLE. 6.11 HENCE, IN VIEW OF THE FATAL ERROR COMMITTED TO WARDS LACK OF EFFECTIVE OPPORTUNITY AND CONCLUSIVE AVERMENTS MADE IN THE RE VISIONAL ORDER, ITA NO. 1026/AHD/18 [SMT. SHARDABEN B. PATEL VS.PR.C IT] A.Y. 2013-14 - 19 - CONSEQUENTIAL ACTION OF SETTING ASIDE THE ASSESSMEN T ORDER IS A NULLITY. SUCH REVISIONAL ORDER THUS DESERVES TO MERGE IN VOI D AND DISAPPEAR. HENCE, WE THUS DO NOT CONSIDER IT NECESSARY TO DWELL UPON OTHER ASPECTS OF THE MAINTAINABILITY OF REVISIONAL ORDER. WE MAY HOWEVE R HASTEN TO ADD AT THIS JUNCTURE THAT OUR OBSERVATIONS ARE LIMITED TO THE C ORRECTNESS OF PROCESS OF FRAMING REVISIONAL ORDER UNDER S.263 OF THE ACT AND SHOULD NOT IN ANY MANNER BE READ AS OUR EXPRESSIONS ON MERITS. 6.12 THE ORDER OF THE REVISIONAL COMMISSIONER IS TH US VITIATED AND CONSEQUENTLY BAD IN LAW. THE IMPUGNED ORDER UNDER S.263 OF THE ACT IS ACCORDINGLY SET ASIDE AND QUASHED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (RAJPAL YADAV) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 25/09/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 25/09/20 19