While overruling a decision in writ petition filed by Unisource Hydro Carbon Services Private Limited & Anr, against the single judge bench decision held that the revisional order passed in violation of the principles of natural justice shall be invalid.
The petitioners have challenged the impugned order of the Commissioner dated 15th December, 2021 under its discretionary power under Section 264 of the Income Tax Act, 1961 and subsequent order under Section 154 of the Act dated 17th January, 2022 arising out of the assessment order passed under Section 143 (3) of the Act, dated 14th June, 2021, relating to assessment year 2018-19 wherein taxable amount of Rs. 22,03,56,600/- was determined and it is admitted position that till date petitioner has not paid a single penny in respect of the aforesaid demand.
Earlier, the single judge bench has held that the revisional authority,while exercising its power under section 264 of the Income Tax Act cannot act as an appellate authority and go into the merits of the assessment by re-appreciating the facts and evidence and all materials.
The division bench of Mr. Justice T. S. Sivagnanam and Mr. Justice Hiranmay Bhattacharyya observed that the order was primarily challenged on the ground of violation of principles of natural justice and as the appellant was not granted adequate and effective opportunity by the assessing officer and, therefore, the assessing officer had committed a jurisdictional error.
“It appears that the assessment order has been challenged also on merits. The learned Single Judge while dismissing the writ petition by order dated 25.08.2021 did not agree with the contention of the appellant that the assessment order suffered from any jurisdictional error as the appellant have been granted effective opportunity,” the bench said.
Overruling the Single bench decision, the division bench held that “the PCIT had committed an error in rejecting the revision petition on the ground that already the appellant had filed the writ petition and challenged the assessment order and the same has been dismissed. The dismissal of the writ petition was not on the merits of the assessment. Therefore, the PCIT committed an error in making such observation. The learned writ court has also faulted the assessee for having not filed a regular appeal as against the order of the assessment by approaching the Commissioner under Section 246(A) of the said Act.”
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