TaxTMI 
TaxTMI 
2024 (12) TMI 633
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....urisdiction and gross violative of principles of natural justice. Even the notice allegedly Dtd.05.03.24 was actually prepared on 15.03.24 and by interpolating the same as 05.03.24, it has been delivered to postal authorities on 16.03.24. 3. That the impugned order u/s. 263 Dtd.29.03.24 has been passed without carefully going through the relevant asstt. order, without application of mind and on wrong facts, as is apparent from the fact that Ld. CIT(E) has specifically noted in order u/s. 263 that the A.O. had allowed the benefit of exemption u/s. 11 & 12 to the assessee and consequently CIT(E) examined all the issues and also issued his directions assuming that the assessee has been allowed exemption u/s. 11 & 12, although, correctly, the exemption claimed u/s. 11 & 12 was disallowed by the A.O. in the relevant asstt. order Dtd.16.08.21 which position still subsisted as on 29.03.24, which is the date of order u/s. 263, hence the impugned order is unsustainable in law. 4. That under the facts and circumstances, Ld. CIT(E) grossly erred in law and on merits in forming an opinion that alleged loan of Rs. 1,20,90,501/- should have been disallowed and added back to the....
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.... view of the fact that exemption u/s. 11 & 12 was not allowed by the A.O. in relevant asstt. order, this issue did not survive for further examination and directions u/s. 263. 7. That under the facts and circumstances Ld. CIT(E), erred in law and on merits in forming opinion that the depreciation of Rs. 15,63,269/- for the assets purchased in earlier years is not allowable and also in holding that the A.O. has failed to make enquiries on this issue and consequently in setting aside the whole asstt. denovo to A.:. 7.1 That in view of the fact that exemption u/s. 11 & 12 was not allowed by the A.O. in relevant asstt. order, this issue did not survive for further examination and directions u/s. 263. 8. That without prejudice, even on assuming (without admitting) that the issues covered in order u/s. 263 are eligible for invoking Sec.263, the whole asstt. could not had been set aside to be reframed denovo. 9. That without prejudice, the manually signed SCN Dtd.05.03.24 is without DIN and also do not comply with the various requirements of CBDT circular No.19/2019 Dtd.14.08.19, which fatal defect renders the impugned SCN as nonest and illegal." 3. ....
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....nity of hearing - gross violation of principles of natural justice order void ab-initio - to be quashed In this case, solitary SCN u/s. 263 Dtd.05.03.24 fixing the matter for 14.03.24 has been served by two modes, however, both times service is after 14.03.24. For above contention, following factual facts are relevant:- Date Event P/B Pg No. 05.03.2024 Date of preparing SCN u/s. 263 (manual) 1-2 08.03.2024 Intimation of DIN generated for preparing SCN u/s. 263 Dtd.05.03.24 5 14.03.2024 Date of hearing fixed as per SCN Dtd.05.03.24 2 16.03.2024 Handing over SCN u/s. 263 to postal authorities for speed post 3,3A para-6 of PCIT 18.03.2024 Service of SCN u/s. 263 Dtd.05.03.24 by speed post 3 29.03.2024 Date of passing Order u/s. 263 and uploading the same on ITBA and simultaneously also sent on email of the assessee. 6 30.03.2024 SCN and intimation of DIN Dtd.08.03.24 uploaded on ITBA and simultaneously sent on email of assessee. 4 Only single SCN u/s. 263 Dtd.05.03.24 issued in this case. It has been served through two different modes of service. 1st mode - through spee....
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....s. PCIT Dtd.16.08.23 [2023] 154 taxmann.com 508 (Allahabad) (Now Filed) From Headnote "INCOME TAX: Where Commissioner issued a notice under section 263 to assessee, however no opportunity was given to assessee for defending or presenting its case, and moreover, revenue recorded a contrary findings in respect of reply submitted by assessee, impugned order passed under section 263 could not be sustained. Para-18 "Further, the notice under section 263 dated 27-3-2022 was prepared and uploaded/sent on 28-3-2022 and the same was received on the date fixed, i.e., 29-3-2022 and the impugned order dated 31-3-2022 has been passed in gross violation of the principles of natural justice. [Para 18]. Para-19 "Since there is an apparent violation of the principles of natural justice, as no opportunity was given to the petitioner for defending or presenting its case, the impugned order cannot be sustained in the eyes of law. [para 19]" 6. Per contra, the Ld. Departmental Representative submitted the para-wise reply based on the information collected from the A.O. which reads as under:- "1. That a notice dated 05.03.2024 u/s 263 of ....
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.... The Ld. Departmental Representative vehemently submitted that it is the duty of the Assessee who being a registered society to verify the ITBA Portal, wherein the Ld.CIT(E) sent mail on 30/03/3024, shared with e-proceedings on 08/03/2024 which has not been read by the Assessee on time and the Assessee read the mail only on 15/04/2024 for which the Assessee cannot blame the Department on the other hand due to Assessee's failure to check the ITBA Portal on time the Assessee failed to appear before the CIT(E), which ultimately resulted in passing the ex-parte order by the CIT(E). Further submitted that the notice sent by speed post has been served on the Assessee before passing of the final order, therefore, the Ld. Departmental Representative sought for dismissal of the Appeal filed by the Assessee. 8. We have heard both the parties and perused the material available on record. In the present case, the assessment of the Assessee for Assessment Year 2018-19 was completed u/s 143(3) r.w. Section 144B of the Act on 16/08/2021 by the A.O. at the taxable income of Rs. 2,67,63,316/- against NIL returned income filed by the Assessee. Subsequently, while exercising power conferred u/s 26....
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....otice and intimation of generating DIN to show cause notice uploaded and ITBA and simultaneously sent by e-mail of the Assessee on 30/03/2024 which is even after passing of the impugned order u/s 263 of the Act. It is also clear that as reflected from the dispatch details presented by the Ld. DR that, the Assessee has read the said notice only on 15/04/2024 much after passing of the order impugned. Thus, the second mode of service of notice ITBA and email to the Assessee is also not served well within the date of hearing fixed by the Ld. CIT(E). 10. In an identical circumstance, while quashing the order passed u/s 263 of the Act, the Hon'ble High Court of Allahabad in the case of M L Chains Vs. Pr. CIT (2023) 154 Taxman.com 508(Allahabad) held as under:- "10. After hearing the learned counsel for the parties, the Court has perused the record. 11. Admittedly, the notice under section 263 of the Income-tax Act dated 27-3-2022 was prepared and the same was got approved for uploading on the portal. The Office of the respondent sent the information to the petitioner on its portal on 28-3-2022. The petitioner came to know about the notice on 29-3-2022 in the morn....
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....ncome-tax Act, 1961. However, in response to the above Notice u/s 263 no reply has been submitted by the assessee to refute the findings as communicated vide Notice u/s 263 having DIN & Notice No. ITBA/REV/M/REV1/2021- 22/1041859754(1) dated 27-3-2022" 13. On perusal of the paragraph no. 4 of the impugned order, it clearly shows that the assessee has not submitted any reply in response to the notice under section 263 of the Income-tax Act dated 27-3-2022. 14. Further, in paragraph no. 5 of the impugned order, following finding has been recorded:- "5. The Assessee was issued Notice under section 263 on 27-3-2022, which was dully served. In response, the Assessee has submitted its reply. The same was duly examined. Based on examination of the submission of the Assessee, facts of the case, documentary evidences produced, past assessment orders and material information available, the reply of the Assessee has been found to be grossly unsatisfactory, not responding to the queries raised in the notice issued." 15. Perusal of paragraph no. 5 of the impugned order shows that the assessee has submitted its reply after due examination of the same and mater....
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....l to the interest of the Revenue in view of the judgment of the Apex Court in Malabar Industrial Co. Ltd. v. CIT [2000] 109 Taxman 66/243 ITR 83 and therefore, on this count also, the impugned order cannot be sustained in the eyes of law. 21. In view of the above, the impugned order dated 31/03/2022 passed by the respondent No. 1 is hereby quashed." 11. Further the Jurisdictional High court in the case of Tulsi Tracom (P) Ltd. Vs. CIT reported in (2017) 86Taxman.com 35 dated 14.09.2017, while quashing the order passed u/s 263 of the Act held that no useful purpose will be served in giving opportunity to the Assessee of being heard at this stage on considering the provisions of Section 263 (2) of the Act which bars for any order being passed pursuant to the notice u/s 263 of the Act, after the expiry of two years from the end of Financial Year in which the order sought to be revised was passed. The relevant portion of the observation of the Hon'ble High Court of Delhi are as under: - "This Court has also examined the question as to whether an opportunity of hearing could now be afforded to the Appellant. However, Section 263(2) of the Act is a clear bar for ....