Sant Kumar Suri, Nurpur V. Pr. CIT, Chandigarh

ITA 576/CHANDI/2022

AI Insights

The case involves an appeal by Sant Kumar Suri against the order of the Pr. CIT, Chandigarh-1, which was passed under section 263 of the Income Tax Act, 1961 for the Assessment Year 2015-16. The Pr. CIT had set aside the original assessment order, claiming it was erroneous and prejudicial to the interests of the revenue, and ordered a denovo assessment. The assessee contested that the original assessment did not meet the criteria of being 'erroneous' and 'prejudicial to the interest of revenue', and that the issues raised were beyond the scope of the limited scrutiny under which the original assessment was conducted. The Tribunal found that the assessee was not adequately informed about the proceedings due to communication issues with his earlier counsel, and thus, in the interest of substantial justice, decided to remand the case for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127791 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-07-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 01-08-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RA MOHAN SINGH
• Keywords: Revision of order; Opportunity of being heard; Set aside
• Section: 263; 143(3)

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “बी” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH ी आकाश द प जैन, उपा य! एवं ी %व&म (संह यादव, लेखा सद-य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM आयकर अपील सं./ ITA NO. 576/Chd/ 2022 नधा रण वष / Assessment Year : 2015-16 Sant Kumar Suri, C/o Parikshit Aggarwal, Chartered Accountant, H.No. 3035, Sector 27D, Chandigarh बनाम The Pr. CIT, Chandigarh थायी लेखा सं./PAN NO: ALNPS9363E अपीलाथ /Appellant यथ /Respondent नधा रती क! ओर से/Assessee by : Shri Parikshit Aggarwal, CA राज व क! ओर से/ Revenue by : Shri Ra Mohan Singh, CIT, DR स ु नवाई क! तार&ख/Date of Hearing : 04/07/2023 उदघोषणा क! तार&ख/Date of Pronouncement : 05/07/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. Pr. CIT, Chandigarh-1 dt. 15/03/2021 passed under section 263 of the Income Tax Act, 1961 pertaining to A.Y. 2015-16 wherein the assessee has taken the following grounds of appeal: 1. That on law, facts & circumstances of the case, the Worthy Pr. CIT has grossly erred in assuming jurisdiction u/s 263 even when: 1.1. 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'. 1.2. The original assessment framed u/s 143(3) was under Limited scrutiny and the issues raised by the Worthy Pr. CIT in the order u/s 263 are beyond the issues of such Limited scrutiny original notice. 1.3. The Worthy Pr. CIT has erred in holding that the issue of alleged difference of Rs. 58,86,197/- in carrying over of capital from earlier year is alleged escapement of income and hence assessment needs to be redone. 2 1.4. The Worthy Pr. CIT has erred in holding that the issue of alleged difference in stock of Rs. 1,40,52,866/- in carrying over of stock from earlier year is alleged escapement of income and hence assessment needs to be redone. 1.5. The Worthy Pr. CIT has erred in holding that the assessment order requires to be revised u/s 263 since in her view the Ld. AO passed the assessment order after conducting inadequate enquiries. 1.6. The Worthy Pr. CIT has erred in setting aside the assessment order and ordering denovo assessment even when the findings of Worthy Pr. CIT are based on suspicions, assumptions and presumptions and without having and adverse evidence against the appellant. 1.7. The Worthy Pr. CIT failed to appreciate that in proceedings u/s 263, she can not substitute the views of AO unless the view of the AO is totally unsustainable. 1.8. 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. During the course of hearing, the limited contention which has been raised by the Ld. AR was that the impugned order has been passed by the Ld. Pr. CIT ex-parte qua the assessee and without providing a reasonable opportunity to the assessee. It was submitted that the assessee’s limited prayer is to set aside the matter to the file of the Ld. Pr. CIT to decide the same afresh. 3. Per contra, the Ld. CIT DR submitted that the assessee was issued a show cause on 20/02/2021 however there was no appearance nor any adjournment application was filed. Thereafter, a fresh notice was issued on 08/03/2021 and again there was no compliance on the part of the assessee therefore the Ld. Pr. CIT has passed the impugned order based on the material available on the record. 4. In his rejoinder the Ld. AR submitted that the show cause dt. 20/02/2021 and thereafter the order dt. 15/03/2021 was never served physically on the assessee and were only issued electronically on the email address of the assessee’s earlier Counsel which the assessee has changed. It was further submitted that the earlier Counsel didn’t inform the assessee about the notice received on his email and as a result the assessee remained unaware of such 3 notice and therefore was prevented by sufficient cause from not responding to the notice. It was submitted that necessary confirmation regarding this fact from the earlier Counsel engaged by the assessee are placed on record. It was submitted that in interest of substantial justice, the assessee may be allowed one more opportunity to be heard. 5. We have heard the rival contentions and perused the material available on the record. Given the limited prayer for setting aside the impugned order in view of non prosecution on the part of the assessee, given the facts and circumstances of the present case where the assessee was prevented from responding to the notices and attending to the revisionary proceedings before the Ld. Pr. CIT for lack of communication and inaction on part of his earlier Counsel, we deem it appropriate to set aside the matter back to the file of the Ld. Pr. CIT to decide the same afresh after providing reasonable opportunity to the assessee. 6. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 05/07/2023 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 AG Date: 05/07/2023 आदेश क! त,ल-प अ.े-षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकर आय ु /त/ CIT 4. आयकर आय ु /त (अपील)/ The CIT(A) 5. -वभागीय त न4ध, आयकर अपील&य आ4धकरण, च7डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar