The Surat bench of the Income Tax Appellate Tribunal (ITAT) has quashed the revision order passed under section 263 of the Income Tax Act, 1961 without providing sufficient time for file material evidence and documents.
The assessee Shhlok Triton firm was engaged in the business of builder, developers and construction activities, filed the return of income for the assessment year 2014-15 declaring total income of Rs.2,32,06,770. Further, the case was selected for scrutiny and the AO passed the assessment order.
Thereafter the Principle Commissioner of Income Tax found that the assessee-firm during the course of assessment proceedings had not furnished the required documents and details and the non-furnishing of requisite details and corroborative evidence indicates that the loan of Rs.77,00,000 as above obtained from the above tabulated three parties cannot be considered as genuine.
The Assessing Officer has not examined the genuineness of the loan transaction. Therefore, the Principle Commissioner of Income Tax issued a notice under section 263 of the Income Tax Act to the assessee.
The assessee-firm also submitted confirmation, returns of income and bank statements of the parties who extended loans to the assessee-firm.
The Principle Commissioner of Income Tax (PCIT) rejected the contention of the assessee and observed that the assessment order passed under Section 143(3) of the Act for the assessment year 2014-15 on 30.11.2016 is erroneous and prejudicial to the interest of revenue and therefore Principal Commissioner of Income Tax directed the AO to recompute and determine the correct total income of the assessee-firm after making necessary disallowances of wrong claims made by the assessee-firm.
Aggrieved by the Principle Commissioner of Income Tax order assessee filed apparel before the Tribunal
During the appeal proceedings Rasesh Shah, counsel for the assessee submitted that issue raised by the Principle Commissioner of Income Tax had been adequately enquired and dealt with and then the Assessing Officer passed an order under Section 43(3) of the Income Tax Act accepting the returned income.
Further counsel argued that the revision order under Section 263 of the Income Tax Act was passed in haste and hurry therefore, the assessee could not submit material evidence before the Principle Commissioner of Income Tax.
Ashok B. Koli counsel for the revenue submitted that AO has passed a cryptic order and there is no mention in the assessment order about the examination of the issue raised by the Principle Commissioner of Income Tax.
It was observed by the tribunal that the Principle Commissioner of Income Tax has not provided adequate opportunity to the assessee to file relevant material evidence and documents before him during the revision proceedings and hence the revision order under Section 263 of the Act was passed by Principle Commissioner of Income Tax in hurry.
Therefore the two-member bench of Pawan Singh, (Judicial Member) and Dr. A. L. Saini, (Accountant Member) Considering the above facts held that the assessee has not been given sufficient opportunity of being heard and could not plead his case successfully before the Principle Commissioner of Income Tax, hence it is a violation of the principle of natural justice.
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