2014 (5) TMI 1132 - AT - Income Tax

Tribunal grants relief to assessee due to procedural errors in Income Tax orders.

The Tribunal, comprising Shri Mahavir Singh, Judicial Member, and Shri Shamim Yahya, Accountant Member, decided in favor of the assessee. The delay in ... Revision u/s 263 - unsigned notice by the designated authority - notice was issued by ACIT - Held that:- The said notice u/s. 263 of the Act ha s not been signed by the “Commissioner of Income Tax” rather it has been signed by ACIT, Hqrs., Burdwan. The Hon’ble Allahabad High Court in the case of Rajesh Kumar Pandey (2012 (9) TMI 829 - ALLAHABAD HIGH COURT ) has expounded that when the Ld. CIT has not recorded his satisfaction, but it was the satisfaction of the Income Tax Officer (Technical) who is not competent to revise his order u/s. 263 of the Act, the order passed was liable to be set aside. Thus it is clear that for a valid assumption of the jurisdiction u/s. 263 of the Act, the notice issued u/s. 263 of the Act should be issued by the Ld. CIT. In this case, it is undisputed that notice was issued by ACIT, Hqrs, Burdwan who is not competent to assume jurisdiction u/s. 263 of the Act. Hence, the notice was not under the seal and signature of Ld. CIT. - Decided in favour of assessee Issues: Delay in filing appeals, Validity of notice issued under section 263 of the Income Tax Act.Analysis:1. Delay in filing appeals: The appeals were filed against the order of the Commissioner of Income Tax under section 263 of the Income Tax Act for assessment years 2003-04 and 2004-05. The delay in filing the appeals was 290 days, attributed to the mistake of the assessee's counsel. The counsel admitted the error, and based on past precedents where delays were condoned due to counsel's mistakes, the delay was condoned by the Tribunal. The Tribunal held that penalizing the assessee for the consultant's mistake would be unjust, and hence, the delay was excused.2. Validity of notice under section 263: The notice issued to the assessee under section 263 of the Act was signed by ACIT, Hqrs., Burdwan, and not by the Commissioner of Income Tax as required by the Act. The assessee contended that since the notice was not signed by the Commissioner, the jurisdiction assumed was defective, rendering the order under section 263 liable to be quashed. The assessee cited relevant case law to support this argument. The Departmental Representative opposed this plea, claiming it was not a material defect. However, the Tribunal analyzed the provisions of section 263(1) of the Act, which mandate the notice to be issued by the CIT. Referring to previous judgments, including the Hon'ble Allahabad High Court and Tribunal decisions, the Tribunal concluded that the notice not being signed by the CIT invalidated the assumption of jurisdiction under section 263. Consequently, the orders passed under section 263 were quashed, and both appeals filed by the assessee were allowed.In conclusion, the Tribunal, comprising Shri Mahavir Singh, Judicial Member, and Shri Shamim Yahya, Accountant Member, decided in favor of the assessee, condoning the delay in filing the appeals and quashing the orders passed under section 263 of the Income Tax Act due to the invalidity of the notice issued. The judgment emphasized the importance of procedural compliance and adherence to statutory requirements for the validity of orders passed under the Act.