D.C.Rana & Company, Ropar V. Pr.CIT, Chandigarh-1

ITA 450/CHANDI/2022

AI Insights

The case involves an appeal by D.C. Rana & Company against the order of the PCIT, Chandigarh, which was passed under section 263 of the Income Tax Act, 1961, for the assessment year 2015-16. The PCIT had set aside the original assessment order under section 143(3), claiming it was erroneous and prejudicial to the interests of the revenue, primarily due to inadequate inquiry regarding increases in partner's capital accounts and unsubstantiated claims of license fees. The assessee contested the PCIT's jurisdiction and the merits of the order, arguing that the original assessment was neither erroneous nor prejudicial and that the PCIT had acted without proper opportunity for the assessee to be heard. The Tribunal found that the PCIT's order was passed ex-parte and without adequate opportunity for the assessee to present its case, leading to the decision to set aside the order and remand the matter for fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127478 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-06-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 19-05-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Opportunity of being heard; Set aside
• Section: 263; 143(3)

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’ CHANDIGARH BEFORE: SHRI A.D.JAIN, VICE PRESIDENT AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 450/CHD/2022 नधा रण वष / Assessment Year : 2015-16 D.C.Rana & Company, House No. 93, Kiln Area, Nangal, Ropar. VS The Pr. CIT, Chandigarh-1. थायी लेखा सं./PAN /TAN No: AAKFD1701H अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Shri Parikshit Aggarwal, CA राज व क ओर से/ Revenue by : Shri Rohit Sharma,CIT-DR तार ख/Date of Hearing : 14.06.2023 उदघोषणा क तार ख/Date of Pronouncement : 16.06.2023 आदेश/ORDER PER VIKRAM SINGH YADAV,A.M. This is an appeal filed by the assessee against the order of ld. PCIT Chandigarh passed u/s 263 dated 23.03.2021 pertaining to assessment year 2015-16 wherein the assessee has taken the following grounds of appeal: 1.1. 1 . That on law, facts & circumstances of the case, the Worthy Pr. CIT has grossly erred in assuming jurisdiction u/s 263 even when: 1.2. The original assessment order passed u/s 143(3) do not satisfy the twin conditions of being an 'erroneous order' and 'prejudicial to the interest of revenue'. 1.3. The Worthy Pr. CIT has erred in setting aside the assessment order u/s 143(3) and in directing the AO to make assessment afresh on the ground that the assessment order was passed under inadequate enquiry. ITA 450/CHD/2022 A.Y.2015-16 Page 2 of 5 1.4. The Worthy Pr. CIT, vide Para 3 of her order, has erred in holding that the assessment order requires to be revised u/s 263 since the increase in partner's capital account of Rs. 2,77,18,021/- is allegedly not supported by relevant documents and therefore is automatically an unexplained cash credit u/s 68. 1.4 The Worthy Pr. CIT, vide Para 3 of her order, has erred in holding that the assessment order requires to be revised u/s 263 since license fee of Rs. 47,92,80,000/- claimed by the appellant in P&L account is allegedly not supported by relevant documents. 1.5. The Worthy Pr. CIT failed to appreciate that in proceedings u/s 263, he can not substitute the views of AO unless the view of AO is totally unsustainable. 1.6. The Worthy Pr. CIT has conducted the impugned proceedings u/s 263 in extreme haste and without affording reasonable opportunity of being heard to the appellant. 2. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 2. At the outset, it is noted that there is a delay in filing the present appeal as pointed out by the Registry by 363 days. In this regard, the assessee has filed a condonation of delay application alongwith affidavit which is placed on record. 3. During the course of hearing, ld. AR taken us through the assessee's application and it was submitted that the impugned order dt. 23.03.2021 passed u/s 263 was never served physically on the assessee and it never came to its knowledge through other means also. Further, it was submitted that it is only in March 2022 when a notice for re-assessment, consequent to order u/s 263, was received, the assessee came to know about the passing of any order u/s 263. Further, it was submitted that the assessee’s Counsel was also not of the knowledge that the order u/s 263 is appealable and that too directly before the ITA 450/CHD/2022 A.Y.2015-16 Page 3 of 5 Tribunal. It was submitted that only when the assessee engaged the ld AR for handling and assisting the re-assessment that it got to know about the issue of appeal against the order u/s 263. Thereafter, the assessee took necessary steps and appeal before the Tribunal was filed on 20.05.2022. 4. It was further submitted that due to 2nd wave of Corona Virus which restricted physical delivery of notices might be a reason that the assessee did not get aware on time and all persons including its office and the office of the consultant was working at very low capacity. It was further submitted that the Hon’ble Supreme Court has also taken cognizance of the covid pandemic and in Suo Moto Orders dated 23.03.2020, 27.04.2021 and 23.09.2021, the period w.e.f. 15th March 2020 to 28.02.2022 was ordered to be excluded from the limitation time for 'Quasi- Judicial proceedings and further 90 days w.e.f 01.03.2022 was provided. 5. It was accordingly submitted that the above facts about non-communication of order, non-awareness of assessee’s counsel about the appeal against order u/s 263 and considering the orders of Hon'ble Supreme Court regarding COVID, the delay in filing of the appeal may be condoned. It was submitted that the delay caused was totally unintentional and bona-fide on part of the assessee and a duly sworn & attested affidavit of the assessee is submitted which may be considered. ITA 450/CHD/2022 A.Y.2015-16 Page 4 of 5 6. The ld. CIT/DR is heard who has submitted that there is a substantial delay in filing the present appeal. At the same time it was fairly submitted that the period of delay includes the Covid Pandemic period and basis the decision of the Hon'ble Supreme Court, the Bench may appropriately decide regarding the condonation of delay. 7. After hearing both the parties and considering the material available on record, we find that there was a reasonable cause for delay in filing the present appeal on account of Covid- 19 Pandemic and other reasons as stated by the assessee in its affidavit which has not been disputed by the Revenue. In the result, the appeal of the assessee is hereby admitted for adjudication. 8. On merits, it is noted that the order of the ld. PCIT has been passed ex-parte qua the assessee. In this regard, the ld. AR has made similar prayer on account of non appearance on account of Covid-19 pandemic and it was submitted that in the interests of natural justice, the assessee may be allowed one more opportunity and the matter may be set aside to the file of ld. Pr. CIT. 9. The ld CIT/DR didn’t raise any objection where the matter is set-aside to the file of the ld PCIT. ITA 450/CHD/2022 A.Y.2015-16 Page 5 of 5 10. After hearing both the parties and considering the material available on record, given that the matter has been decided ex-parte qua the assessee, the same is set aside to the file of ld. PCIT to decide the same afresh after providing reasonable opportunity to the assessee. 11. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 16.06.2023. Sd/- Sd/- आकाश द प जैन !व#म %संह यादव (AAKASH DEEP JAIN) (VIKRAM SINGH YADAV) उपा(य) / VICE PRESIDENT लेखा सद+य/ ACCOUNTANT MEMBER “Poonam” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar