ILJIN Automotive Pvt. Ltd. Vs ACIT (ITAT Chennai)
ITAT Chennai held that passing of rectification order under section 154 of the Income Tax Act held to be not sustainable since reasonable opportunity of being heard was not granted specifically when rectification resulted into enhancement of an assessment.
Facts- Vide the present appeal, the appellant has raised an additional ground challenging the very jurisdiction of AO who has passed the rectification order under section 154 of the Income Tax Act without following statutory procedure since opportunity of being heard was not provided.
Conclusion- Held that no notice was served upon the assessee before the rectification order was passed for AY 2016-17 & 2017-18 and even for AY 2018-19 and thus, department failed to demonstrate that assessee had been given reasonable opportunity of being heard by AO before he passed the impugned orders u/s.154 of the Act. Thus, we find there is violation of statutory procedure prescribed by section 154 by the AO before he took the impugned action of rectifying the earlier order, which resulted in enhancing an assessment/reducing a refund/increase the liability of the assessee. Thus, there is per-se violation of natural justice incorporated in section 155(3) and therefore, we are inclined to set aside the impugned rectification order passed by the AO dated 19.02.2021 for AY 2016-17; order dated 04.11.2022 for AY 2017-18; and order dated 22.11.2022 for AY 2018-19. Thus, the additional grounds raised by the assessee for three (3) assessment years are allowed and the other grounds raised by the assessee are academic in nature and therefore not adjudicated.
