TaxTMI 
TaxTMI 
2025 (12) TMI 848
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....d under the Income Tax Act inasmuch as the period of limitation is applicable from the date of original assessment order dated 21.04.2021 and not the date of reassessment order dated 30.03.2023. 2 FOR THAT the Principal Commissioner of Income Tax, Central Circle, Kolkata-2 passed his Order u/s. 263 on 25.03.2025 whereas the reply furnished by the assessee on 28.01.2025 was not considered in proper perspective and even the personal hearing prayed for by the assessee was not afforded and thereby, the instant Revisional Order u/s. 263 is void and the nullity in the eyes of law. 3 FOR THAT in the submission dated 28.01.2025 your assessee specifically relied upon the settled case law of the Hon'ble High Court of Rajasthan in the case of Jainsons Agrochem Industries v. Principal Commissioner of Income Tax [2024] 163 taxmann.com 76 (Rajasthan) and the judgement pronounced by the Hon'ble Income Tax appellate tribunal, Raipur Bench in the case of Hotel Babylon Continental private limited v. Principal Commissioner of income tax (Central) [2024] taxmann.com 306 (Raipur Trib.) which were not discussed or overruled by the PCIT in the order u/s. 263 of the Act. ....
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....ded to the assessee. The assessee furnished certain reply dated 21.01.2025 and 28.01.2025 and after considering the replies of the assessee, the ld. PCIT noted that the issue regarding the non-charging of interest of Rs. 52,550/- under section 234D of the Act had been covered in Form No. 2 issued on 07.03.2025, hence this issue raised vide show-cause notice was dropped. However, there was discrepancy relating to the employees' contribution of PF and ESI, which was deposited late and beyond the due date for payment and, therefore, was not an allowable expenditure as per section 36(1)(va) of the Act, which was not considered by the ld. AO while framing the assessment under section 143(3) dated 21.04.2021 as well as while framing the assessment under section 147 read with section 143(3) dated 30.03.2023. Another sum of Rs. 45,236/- was debited to the Profit & Loss account under the head 'Fine Penalty on Custom Duty', but subsequently it was not disallowed in the computation of income. The issue was also not considered while framing the reassessment order under section 143(3) r.w.s. 147 dated 30.03.2023, and the expenditure claimed was required to be disallowed. Therefore, a sum of Rs.....
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....hat the assessment order under section 147 r.w.s. 143(3) of the Act dated 30.03.2023 passed by the ld. AO is erroneous in so far as it was prejudicial to the interests of the revenue and, therefore, is liable to be set aside. He, therefore, set aside the order by giving the finding as under:- "15. In the result, the order passed u/s, 147 r.w.s. 143(3) of the Income Tax Act, 1961 dated 30.03.2023 is hereby set aside by exercising the power conferred upon me by section 263 of the Income Tax Act, 1961 directing the A.O to make necessary verification/inquiry on the instant issue and pass a fresh assessment order and re-compute the assessee's income after making proper enquiries on the issues involved herein, after offering reasonable opportunity to the assessee of being heard. Further, the assessment order dated 30.03.2023 is being set aside to these limited extent for the purpose of proper and correct computation of assessed income as discussed in the proceedings under section 263 of the Income Tax Act, 1961. The AO is further directed to decide the matter as per law after giving reasonable opportunity to the assessee of being heard." 4. Aggrieved with the order of ld. PCI....
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....revise any order if he is of the view that the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue and the limitation of powers under sub-section (2) of section 263 are not limited only to the original assessment order dated 21.04.2021 but any order, including the assessment order as well as the reassessment order, both of which can be revised as both are separate orders for the purpose of the Act and separately applicable as well before the appellate authorities. Thus, Ground No. 1 of the appeal is rejected. 8. Ground No. 2 relates to the reply of the assessee being furnished on 28.01.2025 and the reply of the assessee, not being considered properly and personal hearing prayed by the assessee being not afforded and, therefore, the revisional order under section 263 been void and nullity in the eyes of law. In this respect, it is noted that ld. PCIT issued a notice dated 20.12.2024 and another opportunity was granted vide notice dated 15.01.2025. The assessee furnished submission on 24.01.2025 and 28.01.2025, which have been mentioned in para 3 of page 4 & 5 of the order of the ld. PCIT. What is required to be given i....
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....be served on the assessee. Rather, what is required under the said provision is an opportunity of hearing to the assessee. The two requirements are different; the first would comprehend a prior notice detailing the specific grounds on which revision of the assessment order is tentatively being proposed. Such a notice is not required. What is contemplated by section 263, is an opportunity of hearing to be afforded to the assessee. 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. [Para 10] • It may be that in a given case and in most cases it is so done that a notice proposing the revisional exercise is given to the assessee indicating therein broadly or even specifically the grounds on which the exercise is felt necessary. But there is nothing in the section to raise the said notice to the status of a mandatory show-cause notice affecting the initiation of the exercise in the absence thereof or to require the Commissioner to confine himself to the terms of the notice and foreclosing consideration of any other issue or question o....
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....r is erroneous and prejudicial to the interests of the revenue. The above is the question to which the Court, therefore, will have to turn to. [Para 13] • On consideration of the order of the Assessing Officer as well as the order of the Commissioner it appears that the Commissioner, in the course of the revisional proceedings, had scrutinized the record of the proceedings before the Assessing Officer and noted the various dates on which opportunities to produce the books of account and other relevant documents were afforded to the assessee which requirement was not complied with by the assessee. In these circumstances, the revisional authority took the view that the Assessing Officer, after being compelled to adjourn the matter from time to time, had to hurriedly complete the assessment proceedings to avoid the same from becoming time barred. In the course of the revisional exercise, relevant facts, documents, and books of account which were overlooked in the assessment proceedings were considered. On such re-scrutiny it was revealed that the original assessment order on several heads was erroneous and had the potential of causing loss of revenue to the State. It is o....
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.... of the revenue. It is judicially held that Hon'ble Supreme Court does not lay down a new law but only clarifies a law as it stood and, therefore, the order of the Supreme Court in the case of Checkmate Services Pvt. Ltd. is applicable from the date of insertion of section 36(1)(va) of the Act. Since this order was available before the ld. AO on the date of passing the reassessment order under section 147 dated 31.03.2023 and in the reassessment proceeding, the entire assessment order is open and in view of the third proviso, for the relevant assessment year, that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Further, as per clause (c) of Explanation 2 to section 147, for the purposes of section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely where an assessment has been made, but (i) income chargeable to tax has been underassessed. It has been held in Commissioner of Income-tax vs. Sun Engineering Works (P.) Ltd. [1992] 64 Taxman 442 (SC)/[1992] 19....