2021 (10) TMI 672 - AT - Income Tax

Appeal allowed due to lack of fair hearing under Income Tax Act.

Dee Vee Projects Ltd. Versus Pr. CIT, Raipur-1

The Tribunal allowed the appeal filed by the Assessee, quashing the order passed under section 263 of the Income Tax Act for the assessment year 2016-17. ... Revision u/s 263 - denial of natural justice - non providing the reasonable opportunity of being heard to the person - HELD THAT:- As it is not in dispute that notice dated 25/03/2021 was signed and issued only on 25/03/2021 by the Ld. PCIT, while fixing the date of hearing on next day i.e. 26/03/2021 at 1.00 PM and the impugned order was passed on the very next day i.e. 27/03/2021 while sidelining the adjournment application dated 26/03/2021 filed by the Assessee which clearly reflects that the notice issued on dated 25/03/2021 fixing the date of hearing on 26/03/2021 was illusory and farce in nature and had no essence of principles of natural justice, thus goes to show that no reasonable opportunity of being heard was afforded to the Assessee before passing the adverse order against it. On the aforesaid analyzations and considerations and following the mandates in the case of Amitabh Bachchan (supra) [2016 (5) TMI 493 - SUPREME COURT] wherein it was held that failure to give such an opportunity would render the revisional order legally fragile not on the ground of lack of jurisdiction but on the ground of violation of principles of natural justice and in the case of “Maneka Gandhi vs. Union of India [1978 (1) TMI 161 - SUPREME COURT] wherein it was held that if the order is passed by the authority without providing the reasonable opportunity of being heard to the person affected by it adversely will be invalid, the question of remanding the case to the file of Ld. PCIT as prayed for by the Ld. DR, at this juncture at all does not arise as held by co-ordinate Benches as well in the aforesaid cases. - Decided in favour of assessee. Issues Involved:Opportunity of being heard before passing the order under section 263 of the Income Tax Act, 1961.Analysis:The appeal was filed against the order passed by the Principal Commissioner of Income Tax under section 263 of the Income Tax Act for the assessment year 2016-17. The Assessee contended that no proper opportunity of being heard was provided before passing the impugned order. The Assessee raised concerns about the hasty manner in which the order was passed without following the principles of natural justice. The Assessee argued that the order was bad in law due to the lack of opportunity for a fair hearing.The Assessee highlighted the importance of providing an opportunity of being heard before passing any revisional order under section 263 of the Act. The Supreme Court's decision in CIT Vs. Amitabh Bachchan emphasized the necessity of affording the Assessee a fair hearing to avoid legal fragility due to a violation of natural justice principles. The doctrine of natural justice ensures fairness and equality in legal proceedings, emphasizing the right of both parties to be heard.The Tribunal referred to previous cases, such as Smt. Shardaben B. Patel Vs. Pr.CIT and Tata Chemicals Limited vs. DCIT, which emphasized the essential nature of providing an effective opportunity for the Assessee to present their case. It was established that the failure to grant a proper hearing could render the order invalid and in violation of natural justice principles.The Tribunal concluded that the notice issued by the Principal Commissioner fixing the date of hearing the next day, and subsequently passing the order without considering the Assessee's adjournment request, was against the principles of natural justice. The Tribunal quashed the impugned order due to the violation of the principles of natural justice, emphasizing the essence of a fair trial in legal proceedings.The Tribunal decided to allow the appeal filed by the Assessee as the impugned order was quashed on legal grounds, eliminating the need to address the factual grounds. The judgment highlighted the importance of upholding natural justice principles in legal proceedings to ensure a fair and just process for all parties involved.