Louis Dreyfus Company India Pvt Ltd, New Delhi V. Pr.CIT - 5, New Delhi

ITA 1442/DEL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2424 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 24-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AKSHAY UPPAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 143(3); 144C; 13; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) IT A NO. 1442 /DEL/20 20 ASSESSMENT YEAR: 20 13 - 14 LOUIS DREYFUS COMPANY PVT. LTD., RNM CENTRE, 68/2, JANPATH, NEW DELHI. V. PR. CIT-5, NEW DELHI. TAN/PAN: AAACL7361E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AJAY VOHRA, SR.ADV., SHRI ADITYA VOHRA, ADV. AND SHRI AKSHAY UPPAL, CA RESPONDENT BY: SHRI J.K. MISHRA, CIT-DR DATE OF HEARING: 13 10 2020 DATE OF PRONOUNCEMENT: 27 11 2020 O R D E R PER AMIT SHUKLA, JUDICIAL MEMBER: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST THE IMPUGNED ORDER DATED 31.03.2020 PASSED BY LD. PRINCIPAL COMMISSIONER OF INCOME TAX-V, DELHI IN RE VISIONARY JURISDICTION U/S.263 CANCELLING THE FINAL ASSESSMENT ORDER DATED 30.05.2017 PASSED U/S.143(3)/144C(13) TO COMP LETE THE ASSESSMENT PROCEEDINGS DENOVO . IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER DATED 31.03.2020 PASSED BY THE PRINCIPAL COMM ISSIONER OF INCOME TAX-5, DELHI [PCIT] UNDER SECTION 263 OF T HE INCOME TAX ACT, 1961 (THE ACT) IS BEYOND JURISDICTION, BAD IN LAW AND VOID AB INITIO. ITA NO.1442/DEL/2020 2 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY PCIT UNDER SECTION 263 OF THE ACT I S BEYOND JURISDICTION AND BAD IN LAW, SINCE THE SAME HAS BEE N PASSED WITHOUT AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT AND IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE . 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PCIT ERRED IN SETTING ASIDE THE FINAL ASSESSMEN T ORDER DATED 30.05.2017 PASSED UNDER SECTION 143(3) READ WITH SE CTION 144C OF THE ACT AND IN DIRECTING THE ASSESSING OFFICER TO U NDERTAKE ASSESSMENT DE NOVO, WITHOUT APPRECIATING THAT THE T WIN CONDITIONS THAT ARE SINE QUA NON FOR EXERCISING REVERSIONARY P OWERS UNDER SECTION 263 OF THE ACT, VIZ., ASSESSMENT ORDER BEIN G ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE , WERE NOT SATISFIED IN THE APPELLANTS CASE. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PCIT ERRED IN SETTING ASIDE THE ASSESSMENT ORDE R WITHOUT APPRECIATING THAT RELEVANT DETAILS/ DOCUMENTS PERTA INING TO ISSUES RAISED IN SHOW CAUSE NOTICE ISSUED UNDER SECTION 26 3 WERE ALREADY FURNISHED BY THE APPELLANT AND DULY EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PR OCEEDINGS UNDER SECTION 143(3) READ WITH SECTION 144C, THEREBY OUST ING JURISDICTION UNDER SECTION 263 OF THE ACT. 4.1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE PCIT ERRED IN SETTING ASIDE THE ASSESSMENT ORDE R BY EXERCISING POWERS UNDER SECTION 263 OF THE ACT, WITHOUT APPREC IATING THAT IT WAS NOT A CASE OF LACK OF ENQUIRY. 4.2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PCIT ERRE D IN NOT APPRECIATING THAT THE VIEW TAKEN BY THE ASSESSING O FFICER IN RESPECT OF THE VARIOUS ISSUES WHICH WERE SUBJECT MATTER OF SHOW CAUSE NOTICE ISSUED UNDER SECTION 263 OF THE ACT, WAS A P LAUSIBLE VIEW. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PCIT ERRED IN SETTING ASIDE THE ASSESSMENT ORDE R, WITHOUT ITA NO.1442/DEL/2020 3 RECORDING ANY PRIMA FACIE FINDINGS ON THE MERITS OF THE VARIOUS ISSUES RAISED IN THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 263 OF THE ACT, THEREBY NOT DEMONSTRATING HOW AND WHY THE FINAL ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF THE REVENUE. 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PCIT ERRED IN EXERCISING JURISDICTION UNDER SEC TION 263 OF THE ACT WITHOUT APPRECIATING THAT AS THE ORIGINAL ASSESSMEN T ORDER UNDER SECTION 143(3)/ 144C OF THE ACT WAS PASSED WITH THE APPROVAL/ SANCTION OF THE DRP, COMPRISING OF A COLLEGIUM OF T HREE COMMISSIONERS OF INCOME-TAX [CIT], THE SAME WAS N OT AMENABLE TO REVISION UNDER SECTION 263 OF THE ACT. 6.1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE PCIT ERRED IN NOT APPRECIATING THAT CIT OF CO-O RDINATE RANK CANNOT ASSUME JURISDICTION UNDER SECTION 263 IN RES PECT OF ASSESSMENT ORDER PASSED UNDER SECTION 144C( 13) OF THE ACT WITH THE STATUTORY APPROVAL OF ANOTHER CIT, IN THE PRESENT C ASE, BY DRP COMPRISING OF THREE CITS. 2. AT THE OUTSET, LD. SENIOR COUNSEL FOR THE ASSESS EE, MR. AJAY VOHRA SUBMITTED THAT THIS IS SECOND ORDER PASSE D U/S.263 FOR THE SAME ASSESSMENT YEAR; AS FIRST WAS AGAINST DRAFT ASSESSMENT ORDER WHICH HAS BEEN QUASHED. NOW SECOND REVISIONARY ORDER U/S.263 HAS BEEN PASSED CANCELLIN G THE FINAL ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 14 4C (13) ON 30.05.2017. THE LD. CIT HAS ISSUED A NOTICE ON 18 TH MARCH, 2020 FOR COMPLIANCE ON 23.03.2020 AND THIS FACT HAS ALSO BEEN MENTIONED IN PARAGRAPH 3 OF THE IMPUGNED ORDER . NOTICE WAS ALSO SENT THROUGH SPEED POST. LD. COUNSEL POINT ED OUT THAT, DURING THAT PERIOD DUE TO RISE OF COVID-19 PA NDEMIC, ITA NO.1442/DEL/2020 4 LOTS OF RESTRICTIONS ON WORKING WERE IMPOSED AND FI NALLY ON 23 RD MARCH, 2020, ALL INDIA LOCKDOWN WAS ANNOUNCED AND ALL THE OFFICES WERE SHUTDOWN. DESPITE THAT, ASSESSEE S ENT A REPLY THROUGH E-MAIL ON 23.06.2020 THAT IT HAD NOT RECEIV ED ANY NOTICE ISSUED FROM OFFICE OF PR.CIT FOR WHICH HEARI NG WAS SCHEDULED FOR 23 RD MARCH, 2020. IT WAS INFORMED THAT OFFICE OF THE COMPANY WAS LOCKED DUE TO ANNOUNCEMENT BY PRIME MINISTER FOR COVID-19 PANDEMIC. AGAIN NOTICE WAS SE NT THROUGH E-MAIL BY PR.CIT ON EVENING OF 25 TH MARCH ASKING THE ASSESSEE-COMPANY TO FILE REPLY ON THE ISSUE MENTION ED IN THE NOTICE BEFORE 12 TH NOON ON 26 TH MARCH, 2020. HOWEVER, THE LD. PR.CIT WITHOUT GIVING ANY OPPORTUNITY PASSED THE OR DER HAD SET ASIDE THE IMPUGNED ORDER AND DIRECTED THE ASSES SING OFFICER TO COMPLETE THE ASSESSMENT PROCEEDINGS DENOVO . LD. COUNSEL SUBMITTED THAT THERE IS A GROSS VIOLATION O F PRINCIPLE OF NATURAL JUSTICE, AND THEREFORE, SUCH AN ORDER CA NNOT BE SUSTAINED. 3. ON THE OTHER HAND, LD. CIT-DR SUBMITTED THAT MAT TER CAN BE RESTORED BACK TO THE FILE OF THE LD. PR.CIT TO GIVE PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE, NOW THAT WO RKING OF THE OFFICES HAS STARTED. 4. AFTER CONSIDERING THE AFORESAID SUBMISSION AND O N PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT THERE H AS BEEN GROSS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE BY T HE LD. PR.CIT, BECAUSE THE NOTICE U/S.263 WAS ISSUED ON 18.03.2020 FOR MAKING COMPLIANCE ON 23 RD MARCH, 2020, WHEN THERE WAS A NATIONAL LOCKDOWN ANNOUNCED BY HONBLE PRIME MINIST ER DUE ITA NO.1442/DEL/2020 5 TO PANDEMIC CAUSED BY COVID-19 AND THE OFFICES INCL UDING THE OFFICE OF THE LD. PR.CIT WAS ALSO SHUTDOWN. AGAIN, HE HAD ISSUED A SECOND NOTICE THROUGH E-MAIL IN THE EVENIN G OF 25 TH MARCH, 2020 FOR MAKING COMPLIANCE AT 12 NOON OF 26 TH MARCH, 2020, WHEN STILL ALL THE OFFICES WERE SHUTDO WN AND THERE WAS NO MOVEMENT AT ALL. UNDER THESE CIRCUMSTA NCES, LD. PR.CIT WAS NOT JUSTIFIED IN PASSING THE ORDER ON 31 ST MARCH, 2020 WHEN ON THAT DATE ALSO NO OFFICES WERE FUNCTIO NING. SUCH AN ORDER OF LD. PR.CIT IS NOT JUSTIFIED AND HAS CAUSED GREAT PREJUDICE TO THE ASSESSEE AND VIOLATES ALL THE TENETS OF PRINCIPLE OF NATURAL JUSTICE. UNDER THESE FACTS AND CIRCUMSTANCES, WE ARE SETTING ASIDE THE IMPUGNED OR DER OF LD. PR.CIT IS REMANDED BACK TO LD. PCIT TO ISSUE FRESH SHOW CAUSE NOTICE AND GIVE DUE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE AND THEN DECIDE THE MATTER IN ACCOR DANCE WITH LAW. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2020 SD/- SD/- [N.K. BILLAIYA] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH NOVEMBER, 2020 PKK