Section 263 Revision Order passed without issuing notice is void ab-initio

Opportunity of being heard is little more than serving a notice on assessee. It is not an empty formality. Without giving a proper opportunity to assessee, revision proceedings u/s. 263 cannot be finalized as the provisions of Section 263 mandates that the CIT may pass such orders after giving an opportunity of being heard. Since the mandatory requirement of opportunity of being heard has not been provided to assessee, the order passed by CIT is void ab-initio. Further as considered above, the record do indicate that AO has examined the issue and CIT was wrong in not examining the record properly and arriving at certain conclusions without any basis. Though revisional authority considers himself to be an extended arm of Revenue department in collection of correct tax, he does not get any leverage to exercise such jurisdiction, to do, so giving a go by to the established principles enunciated in law which are inbuilt checks provided in Section 263 itself. Justice should not only be done but it should also appear to be done. In this case the haste in which the proceedings are sought to be commenced and completed indicate that paramount importance is given to bring to tax the alleged tax as capital gains and there it can only be concluded that CIT has not followed the principles of natural justice. Thus, looking at from any angle it can be concluded that the order passed by CIT u/s 263 has not followed the prescribed provisions mandated and so the same cannot be upheld. In these circumstances, we have no other option than to quash the proceedings initiated by the CIT u/s. 263.
FULL TEXT OF THE ITAT JUDGMENT