2021 (8) TMI 1395 - AT - Income Tax

Tribunal Condones Appeal Delay, Cites Pandemic; Remands Case for Reevaluation Due to Lack of Fair Hearing Procedures.

The Tribunal condoned a 56-day delay in filing the appeal due to the pandemic, recognizing a government extension. The Ld. PCIT's notice under section 263 ... Exercise of jurisdiction under section 263 of the Income Tax Act - reopening assessment under section 147 of the Income Tax Act - principle of natural justice / right to be heard - condonation of delay in filing appeal due to COVID-19 pandemic and government notification-based extension - remand for fresh adjudication after affording opportunity of hearingCondonation of delay in filing appeal due to COVID-19 pandemic and government notification-based extension - Extension of time to file the appeal was allowed and delay was condoned. - HELD THAT: - The assessee filed an application for condonation of 56 days' delay, attributing delay to the national lockdown and pandemic-related difficulties and relying on the Central Government Notification/Ordinance dated 31-03-2020 granting extension for filing appeals whose due dates fell during the pandemic. The Revenue raised no objection. Having regard to the practical difficulty and the Governmental measure extending filing dates, the Tribunal found it fit in the interests of justice to condone the delay and admit the appeal. [Paras 2]Delay in filing the appeal is condoned.Exercise of jurisdiction under section 263 of the Income Tax Act - principle of natural justice / right to be heard - reopening assessment under section 147 of the Income Tax Act - The order passed by the Pr. CIT under section 263 was set aside for want of proper opportunity of hearing to the assessee. - HELD THAT: - Records show that notices were issued by the Pr. CIT and that the assessee had sought adjournment; however the impugned order dated 13-03-2020 was passed without recording that the adjournment request was considered or after affording a proper hearing. The Tribunal concluded that the principle of natural justice was not adhered to because the assessee was not given an effective opportunity to be heard before the Pr. CIT finalized the exercise of jurisdiction under section 263. Consequently the exercise of the revisional power was unsustainable in the circumstances. [Paras 6]Impugned order under section 263 is set aside for failure to afford proper opportunity of hearing.Remand for fresh adjudication after affording opportunity of hearing - Matter remitted to the Pr. CIT for fresh adjudication on merits after affording the assessee an opportunity to be heard and to place evidence; procedural directions were given. - HELD THAT: - Instead of deciding the controversy on merits in the impugned order, the Tribunal directed that the issue be sent back to the file of the Pr. CIT for positive adjudication on merits. The Pr. CIT is required to grant the assessee an opportunity of being heard, consider any evidence the assessee may file, and pass a reasoned order. The Tribunal also cautioned that the assessee should not seek unnecessary adjournments and must cooperate in the proceedings before the Pr. CIT. [Paras 6, 7]Matter remitted to the Pr. CIT to adjudicate on merits after hearing the assessee and passing a reasoned order; appeal allowed for statistical purposes.Final Conclusion: The Tribunal condoned the delay in filing the appeal, set aside the Pr. CIT's order passed under section 263 for want of proper hearing, and remitted the matter to the Pr. CIT to decide on merits after affording the assessee an opportunity to be heard and to file evidence; the appeal is allowed for statistical purposes. Issues:Delay in filing the appeal due to pandemic situation and lockdown. Validity of notice issued by Ld. PCIT u/s. 263 of the Act. Adherence to principles of natural justice in passing the impugned order.Analysis:The appeal was filed with a delay of 56 days due to the pandemic situation and lockdown, which hindered the preparation and filing process. The assessee relied on a government-issued Notification/Ordinance granting an extension for filing appeals affected by the pandemic, which was not objected by the ld. DR. Considering the practical difficulty faced by the assessee and the government's extension, the delay was condoned for the ends of justice.The Ld. PCIT issued a notice u/s. 263 of the Act, alleging failure by the Ld. AO to assess the income of the assessee properly. The Ld. PCIT found discrepancies in the assessment process and set aside the issue to the AO for reassessment based on observations made in the impugned order. During the appeal hearing, it was revealed that the assessee did not receive the notices issued by the Revenue, and there were delays attributed to the illness of the partners of the assessee company. The Ld. PCIT passed the impugned order without affording proper opportunity of being heard to the assessee, violating the principles of natural justice. Consequently, the Tribunal set aside the issue to the Ld. PCIT for proper adjudication on merits, ensuring the assessee's right to be heard and submit evidence.In conclusion, the Tribunal allowed the appeal of the assessee for statistical purposes, emphasizing the importance of adhering to principles of natural justice in legal proceedings. The decision was pronounced in the open court on 25-08-2021.