Case Law Details
Subhash Devidas Mind Vs PCIT (ITAT Pune)
The case of Subhash Devidas Mind vs. Pr. Commissioner of Income Tax-1, Nashik (PCIT) represents a significant decision by the Income Tax Appellate Tribunal (ITAT) Pune. The case centered on a revision order, issued under section 263 of the Income Tax Act, 1961, during the height of the Covid-19 pandemic. The order was quashed by ITAT, paving the way for further analysis and discussion on the matter.
Analysis: In this case, the assessee, an individual, had not filed any return of income and the Assessing Officer took ex-parte action based on information about cash deposits in the assessee’s savings bank accounts. The Principal Commissioner of Income Tax (PCIT) later deemed the Assessing Officer’s order as erroneous and prejudicial to the interests of the Revenue.
However, the final show-cause notice was served during the peak of the Covid-19 pandemic, at a time when representation and response might have been hindered due to the health crisis. ITAT Pune considered these circumstances and referenced the Supreme Court’s suo motu extension of various limitations under different statutes due to the pandemic.
In this light, ITAT quashed the order passed by the PCIT for de novo consideration, providing the appellant an opportunity to be heard in accordance with law.
Conclusion: The ruling in Subhash Devidas Mind Vs PCIT highlights the importance of providing adequate opportunities for representation, especially in challenging circumstances like a pandemic. The judgement underscores the fairness of due process, reaffirming the need for regulatory bodies to consider extraordinary circumstances in the execution of their duties.
FULL TEXT OF THE ORDER OF ITAT PUNE
This is an appeal filed by the assessee directed against the order of ld. Pr. Commissioner of Income Tax-1, Nashik (‘PCIT’) dated 04.03.2021 passed u/s 263 of the Income Tax Act, 1961 (‘the Act’) for the assessment year 2011-12.
2. Briefly, the facts of the case are that the appellant is an individual. No regular return of income under the provisions of section 139(1) of the Act was filed by the appellant. The Assessing Officer, on receipt of information that the appellant had deposited cash in two savings bank accounts during the financial year relevant to the assessment year 2011-12 issued a notice u/s 148 dated 31.03.2017 calling upon the appellant to file the return of income. In response to the said notice u/s 148, the appellant had not filed any return of income. However, the Income Tax Officer, Ward-1, Lathur (‘the Assessing Officer’) had proceeded to frame the assessment order vide order dated 28.12.2017 passed u/s 144 r.w.s. 147 of the Act at a total income of Rs.46,87,690/-. While doing so, the Assessing Officer brought to tax long term capital gains of Rs.15,45,460/- arising on sale of land at Gangapur and also brought to tax cash deposits in two savings bank account maintained with Mahesh Urban Co-op. Bank Ltd., Ahmedpur and Shree Chatrapati Rajarshi Shahu Urban Co-op. Bank Ltd., Beed amounting to Rs.48,28,700/-. Out of Rs.48,28,700/-, the Assessing Officer treated cash deposit of Rs.17,01,000/- received on sale of plots as explained and balance amount of Rs.31,27,700/- was treated as unexplained cash deposits in two savings bank accounts.
3. Subsequently, on review of the assessment record, the ld. PCIT was of the opinion that the Assessing Officer should have adopted the total consideration of Rs.1,34,22,780/- in respect of Rs.17,01,000/- on sale of consideration of plots and, accordingly, he formed an opinion that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. Accordingly, the ld. PCIT issued a show-cause notice u/s 263 dated 03.09.2019. Despite several opportunities given on 06.01.2020 and 27.01.2020, the appellant had not replied to the said show-cause notice. Subsequently, there was change of incumbent, thereafter another notice was issued on 04.02.2021 calling upon the appellant to file explanation on or before 11.02.2021. The appellant had not filed any explanation to final show-cause notice, therefore, the ld. PCIT had proceeded to pass an ex-parte order by setting aside the assessment order and directed the Assessing Officer for de novo
4. Being aggrieved, the appellant is in appeal before us in the present appeal.
5. At the outset, there is a delay of 190 days in filing the present appeal. The assessee prayed for condonation of delay stating that the delay had occurred because of the panic created by Pandemic Covid-19. The ld. CIT-DR has no serious objection for condonation of delay. Accordingly, we condone the delay and admit the appeal for adjudication on merits.
6. We heard the rival submissions and perused the material on record. We find that the order had passed by the ld. PCIT ex-parte order u/s 263 of the Act. The final show-cause notice was issued on 04.02.2021, which falls during the peak period of the Pandemic Covid-19. It can be safely assumed that the appellant was prevented from causing the appearance before the ld. PCIT on account of difficulties faced by the appellant on account of Covid-19 Pandemic, the Hon’ble Supreme Court in the case of Cognizance for Extension of Limitation, In re (2022) 441 ITR 722 (SC) dated 10.01.2022, wherein, the Hon’ble Supreme Court had suo motu extended the various limitations prescribed under various Statutes. Therefore, we are of the considered opinion that the appellant could not represent the matter before the ld. PCIT on account of difficulties faced by the appellant on account of Covid-19 Pandemic, which constitutes a reasonable and sufficient cause for non-appearance. Accordingly, we set-aside the order passed by the PCIT u/s 263 of the Act for de novo consideration after giving an opportunity of being heard to the appellant in accordance with law.
7. In the result, the appeal filed by the assessee stands partly allowed.
Order pronounced on this 29th day of May, 2023.
