M/s. MAHARASHTRA SOLVENT EXTRACTION PVT. LTD, JALGAON V. PRINCIPAL COMMISSIONER OF INCOME TAX - 1, NASHIK

ITA 121/PUN/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4974 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 11-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Opportunity of being heard; Principle of natural justice; Speculation loss; Assessment record
• Section: 263; 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.121/PUN/2021 िनधाᭅरण वषᭅ / Assessment Year: 2016-17 M/s. Maharashtra Solvent Extraction Pvt. Ltd., Shivaji Nagar, Old Dhulia Road, Jalgaon- 425001. PAN : AADCM8466G Vs. Pr.CIT-1, Nashik. Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Pr. Commissioner of Income Tax- 1, Nashik (‘the PCIT’) dated 12.03.2021 for the assessment year 2016-17. 2. Briefly, the facts of the case are that the appellant is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of extraction of Soyabean Oil. The return of income for the assessment year 2016-17 was filed on 17.10.2016 declaring total income of Rs.69,40,600/-. Against the Assessee by : Shri Sanket M. Joshi Revenue by : Shri Abhinay S. Kumbhar Date of hearing : 19.07.2022 Date of pronouncement : 21.07.2022 ITA No.121/PUN/2021 2 said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Circle-1, Jalgaon (‘the Assessing Officer’) vide order dated 21.12.2018 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at total income of Rs.85,21,990/- after making (a) disallowance u/s 40A(3) of Rs.4,92,634/-, (b) disallowance u/s 36(1)(iii) of Rs.6,89,023/- and (c) disallowance of expenditure of Rs.4,00,000/-. Subsequently, on verification of the assessment record, the ld. PCIT formed an opinion that the assessment order is erroneous and prejudicial to the interests of the revenue on the ground that the Assessing Officer without examining had allowed the claim of set off of speculative loss against profit earned and, accordingly, issued show-cause notice dated 01.03.2021 requiring the appellant to show-cause as to why the assessment order cannot be set-aside. On receipt of the said notice, the appellant had sought an adjournment of hearing of appeal through e-mail on the Income Tax Department’s website portal, which reads asunder :- “Our income tax consultant is not available at this time due to COVID- 19. Hence, we seek adjournment in hearing of the notice by 15 days.” 3. However, the ld. PCIT without disposing of the adjournment petition had proceeded with passing of the order u/s 263 and had ITA No.121/PUN/2021 3 set-aside the assessment order to the Assessing Officer with direction to re-frame the assessment order in accordance with law. 4. Being aggrieved by the impugned order of ld. PCIT passed u/s 263, the appellant is in appeal before us in the present appeal. 5. It is submitted that the ld. PCIT had passed the impugned order in gross violation of principle of natural justice without affording of reasonable opportunity of being heard to the appellant. Thus, it is pleaded that the order passed by the ld. PCIT u/s 263 may be set-aside. 6. On the order hand, ld. CIT-DR placed reliance on the order of the ld. PCIT passed u/s 263 of the Act. 7. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the validity of the order passed by the ld. PCIT u/s 263 of the Act. The appellant had questioned the validity of the order of revision on the ground of gross violation of principles of natural justice, as the appellant was not afforded a reasonable opportunity of the representing the matter before the ld. PCIT. On perusal of the impugned order, it is clear that the ld. PCIT had issued notice only once i.e. on 01.03.2021 fixing the matter for hearing for 08.03.2021. On receipt of the said ITA No.121/PUN/2021 4 notice of hearing, the appellant sought adjournment of hearing through e-mail on the Income Tax Department’s website portal. The ld. PCIT without disposing of the adjournment petition and without giving reasonable opportunity of hearing had proceeded with passing the order u/s 263 of the Act. In doing so, the ld. PCIT had violated the principle of natural justice by granting unreasonable short time to respond to the notice of hearing and without disposing of request for adjournment had proceeded with passing of order u/s 263 of the Act. Therefore, we remand the matter to the file of the ld. PCIT with direction to pass a fresh order u/s 263 after giving a reasonable opportunity of being heard to the appellant. Accordingly, the grounds of appeal raised by the assessee stands partly allowed for statistical purposes. 8. In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced on this 21 st day of July, 2022. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 21 st July, 2022. Sujeet ITA No.121/PUN/2021 5 आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT-1, Nashik. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.