Hampi Expressways Pvt. Ltd. Vs PCIT (ITAT Mumbai)
No Notice, No 263: Limitation Cannot Be Extended- Tribunal Strikes Down PCIT’s 263 Order Passed Without Hearing
Hampi Expressways Pvt. Ltd., engaged in construction & maintenance of roads, rails, bridges & infrastructure, filed appeal against revisionary order passed u/s 263 by Pr. CIT, Mumbai on 31.03.2025 for AY 2020-21.
Assessee had filed return declaring NIL income & assessment was completed u/s 143(3) r.w.s. 144B on 23.09.2022 accepting the return. Based on Revenue Audit objection in AY 2022-23 regarding depreciation claim on investments made under Service Concession Agreement (SCA) for toll road projects, PCIT held that similar depreciation claim allowed in AY 2020-21 was erroneous & prejudicial to Revenue. Accordingly, he set aside assessment u/s 263 directing AO to re-examine.
Before Tribunal, Assessee contended that no show cause notice was issued nor opportunity of hearing provided as mandated u/s 263(1). PCIT hurriedly passed order on last day of limitation (31.03.2025) only to save time bar. Revenue admitted no notice was issued but argued it was a curable irregularity.
Tribunal observed that issuance of notice & opportunity of hearing are mandatory under s.263(1). Further, limitation under s.263(2) is absolute– PCIT cannot be allowed to cure defect by remand beyond 2 years. Relying on Delhi HC in Tulsi Tracom Pvt. Ltd. v. CIT & SC in Amitabh Bachchan, Tribunal held that order u/s 263 without notice/hearing is void. Restoration would illegally extend limitation. Accordingly, Tribunal quashed PCIT’s order u/s 263 & restored AO’s assessment, allowing Assessee’s appeal.
