Sheela Devi Vs PCIT (ITAT Delhi)
ITAT observed total lack of opportunity by PCIT while concluding the proceedings under Section 263 of the Act. It is apparent from the records that solitary show cause notice issued to the assessee was for attendance on the very next date, i.e., 26.03.2021 in substitution of the first show cause notice fixing the hearing beyond limitation period. No other opportunity was given to the assessee. We are constraint to observe that such a casual approach of a very senior functionary of the Department does not augur well in the eyes of public and cannot be countenanced on the touchstone of sacrosanct principle of natural justice explicit in 263 itself. A question would arise as to whether a failure to give a reasonable opportunity to the assessee of being heard was only a procedural irregularity in such gross circumstances and thus curable and did not render the order passed by PCIT void ab initio and nonest in law per se.
In the case of Tata Chemicals Limited vs. DCIT, ITA No.3127/Mum/2010, order dated 30.06.2011, the co-ordinate bench after making reference to the decision in the judgment in Maneka Gandhi vs. Union of India, AIR 1978 SC 597, and other judgments observed that the order which infringes the fundamental principle, passed in violation of audi alteram partem rule, is a nullity. When a competent Court or authority holds such an order as invalid or sets it aside, the impugned order becomes null and void. Once it is concluded that the order in question is null and void, it is not for the adjudicating authority to advise the Commissioner as to what should he do. He is always at liberty to do whatever action he can take in accordance with the law, but a life to null and void order by remitting it back to the Commissioner for giving a fresh opportunity of passing the order, after giving the assessee an opportunity of hearing, cannot be given. In a case, where it is possible for the Commissioner to pass a fresh order at this stage in accordance with the scheme of the Act, he can very well do so but in case the time limit for passing such order has already expired, such time limit cannot be extended by directing him to pass the order after giving an opportunity of hearing to the assessee. Otherwise, this would tantamount to giving premium to the authority committing default. The finality of the assessment cannot be disturbed for the failure of the PCIT to obdurately adhere to the explicitly prescribed requirement of opportunity to assessee.
Hence, in the absence of any opportunity to the assessee, for which the fault is attributable squarely to the PCIT is fatal and such defect being incurable, the revisionary order passed under Section 263 of the Act is also required to be quashed independently on this ground.
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned appeal has been filed at the instance of the legal heir and wife of the deceased-assessee (Vas Dev) against the revisional order of the Principal Commissioner of Income Tax, Faridabad (‘PCIT’ in short) dated 28.03.2021 passed under Section 263 of the Income Tax Act, 1961 (the Act) whereby the assessment order passed by the Assessing Officer dated 15.11.2018 under Section 143(3) read with Section 147 of the Act was sought to be set aside for reframing the assessment in terms of supervisory jurisdiction.
2. As per the grounds of appeal, the assessee has challenged the revisional action of the PCIT whereby the Assessing Officer was directed to pass the assessment order denovo after making inquiries on the points set out revisional order. The assessee has challenged the assumption of jurisdiction by the PCIT under Section 263 of the Act on the ground that; (i) the initiation of revisional proceedings and consequential order under Section 263 of the Act is in the name of a deceased person is a nonest and unsustainable in the eyes of law (ii) the assessment order under revision is neither erroneous nor prejudicial to the interest of the Revenue and thus revisional commissioner was not competent to exercise revisional powers.
