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Case Law Details

Case Name : Smt. Maltidevi Birbal Singh Vs ITO (ITAT Mumbai)
Appeal Number : ITA No. 2863/Mum/2010
Date of Judgement/Order : 30/03/2011
Related Assessment Year :

Briefly stated facts of the case are that the assessee, an individual derives income from manufacture of wire & wire ropes. The return was filed declaring total income at ` 4,07,734/-. However, the assessment was completed at an income of ` 5,08,730/- vide order dated 25.06.2007 passed u/s 143(3) of the Act. Subsequently, the ld. CIT in exercise of his powers u/s 263 of the Act observed that the assessment completed by the A.O. is found to be erroneous and prejudicial to the interests of the Revenue and accordingly he issued notice dated 14.12.2007 to show Smt. Maltidevi Birbal Singh cause as to why action u/s 263 should not be taken and the case was fixed for hearing on 4.12.2007 i.e. prior to the date of issuance of notice u/s 263. Thereafter, the case was fixed for hearing on various dates. The assessee sought adjournments and the case was finally fixed on 23.12.09. In the absence of any response by the assessee, the ld. CIT observed that the assessee has nothing to say against the proposed revision, therefore, he passed an ex parte order setting aside the assessment of the A.O. with a direction to pass fresh order after giving proper opportunity of being heard to the assessee.

Appellant’s Contention

Appellant’s chartered accountant attended twice before the Commissioner of Income Tax and on both the occasions as the Commissioner was busy with some other matters, the hearing could not take place and the appellant’s chartered accountant was informed that a fresh notice would be issued. However, without issuing a fresh notice, the appellant received the order u/s.263.

Accordingly, the principles of natural justice were violated in as much as no fresh notice was issued and the order was passed without affording an opportunity to the appellant to put forth her case.

Held By ITAT

After carefully hearing the rival parties and perusing the material available on record and in the absence of any contrary material placed on record by the ld. D.R., we are of the view that the ld. CIT was not justified in passing ex parte order without allowing proper opportunity of being heard to the assessee, therefore, in the interest of justice, we consider it fair and reasonable that one more opportunity be provided to the assessee to represent her case before the ld. CIT and accordingly we set aside the order passed by the ld. CIT and restore the matter to his file who shall decide the same afresh and according to law after providing a reasonable opportunity of being heard to the assessee.

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