Tribunal directs reassessment, stresses due process, in Income-tax Act revisionary order appeal

The Tribunal allowed the appeal for statistical purposes, directing the Principal Commissioner of Income Tax to reconsider the issues after providing the assessee with a proper hearing opportunity and considering the replies already submitted. The decision emphasized the significance of due process and the necessity to take into account all relevant submissions before issuing a revisionary order under section 263 of the Income-tax Act, 1961.

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Issues:
1. Revision u/s 263 of the Income-tax Act, 1961 regarding contravention of section 40A(3) and undeclared income.
2. Consideration of assessee's reply by the Principal Commissioner of Income Tax (Pr.CIT) before passing the order.

Analysis:
1. The appeal was against the order dated 18.03.2021 passed by the ld. Pr.CIT, Pune-1 under section 263 of the Income-tax Act, 1961 for the assessment year 2015-16. The assessee, engaged in manufacturing and trading of gold and silver ornaments, had filed a return declaring total income of Rs.15,06,560. The assessment completed under section 143(3) accepted the declared income. The ld. Pr.CIT observed contravention of section 40A(3) and non-declaration of income on account of excess stock, which were not considered by the Assessing Officer during assessment. The Pr.CIT issued show cause notice to the assessee, who did not reply, leading to an ex parte decision setting aside the assessment order for revisiting the issues after giving the assessee a proper hearing opportunity.

2. The Tribunal noted that the Pr.CIT did not adjudicate on the issues as the assessee did not reply by the specified date. However, the assessee had uploaded replies on the same date as required. The Tribunal found that the Pr.CIT's order was passed without considering the replies, leading to the decision to set aside the order and restore the matter to the Pr.CIT for a fresh revisionary order after allowing a reasonable opportunity of hearing to the assessee and considering the replies already filed. The appeal was allowed for statistical purposes.

In conclusion, the Tribunal directed the Pr.CIT to reconsider the issues after giving the assessee a proper hearing opportunity and considering the replies already submitted. The decision highlighted the importance of due process and considering all relevant submissions before passing a revisionary order under section 263 of the Income-tax Act, 1961.

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