Case Number: ITA 1442/DEL/2020
Appellant: Louis Dreyfus Company India Pvt Ltd, New Delhi
Respondent: Pr. CIT – 5, New Delhi
Assessment Year: 2013-14
Case Filed On: 2020-07-24
Order Type: Final Tribunal Order
Date of Order: 2020-11-27
Pronounced On: 2020-11-27
The case of ITA 1442/DEL/2020 involves an appeal by Louis Dreyfus Company India Pvt Ltd against the Principal Commissioner of Income Tax (Pr. CIT) – 5, New Delhi. The appeal concerns the assessment year 2013-14 and addresses the jurisdiction and validity of the Pr. CIT’s order under section 263 of the Income Tax Act.
Louis Dreyfus Company India Pvt Ltd, located in New Delhi, filed its return of income for the assessment year 2013-14. The final assessment order was passed on 30.05.2017 under section 143(3)/144C(13) of the Income Tax Act. Subsequently, the Pr. CIT issued an order under section 263 on 31.03.2020, cancelling the final assessment order and directing a de novo assessment.
The appellant challenged the jurisdiction and validity of the Pr. CIT’s order under section 263, arguing that it was beyond jurisdiction, bad in law, and void ab initio. The appellant contended that the order was passed without affording a reasonable opportunity of being heard, violating principles of natural justice.
The appellant argued that the twin conditions for exercising revisory powers under section 263, namely the assessment order being erroneous and prejudicial to the interests of the Revenue, were not satisfied. The appellant asserted that relevant details and documents were furnished and examined during the original assessment proceedings, and the view taken by the Assessing Officer was a plausible one.
The appellant also argued that the Pr. CIT failed to record any prima facie findings on the merits of the issues raised in the show cause notice, thereby not demonstrating how and why the final assessment order was erroneous and prejudicial to the interests of the Revenue.
The appellant contended that the original assessment order was passed with the approval of the DRP, comprising a collegium of three Commissioners of Income-tax (CITs), and therefore, the same was not amenable to revision under section 263.
The Tribunal found that there was a gross violation of the principle of natural justice by the Pr. CIT. The notice under section 263 was issued on 18.03.2020 for compliance on 23.03.2020, during a national lockdown due to the Covid-19 pandemic. Despite the lockdown, the Pr. CIT issued another notice via email on 25.03.2020, asking for compliance by 12 noon on 26.03.2020. The Tribunal noted that the offices, including the office of the Pr. CIT, were shut down, and no proper opportunity was given to the appellant to respond.
Given the circumstances, the Tribunal set aside the impugned order of the Pr. CIT and remanded the matter back to the Pr. CIT to issue a fresh show cause notice and provide due and proper opportunity of hearing to the appellant before deciding the matter in accordance with the law.
The Tribunal allowed the appeal for statistical purposes, emphasizing the need for adherence to the principles of natural justice and proper opportunity of hearing before passing any revisory order under section 263 of the Income Tax Act.
This case highlights the importance of following due process and ensuring fair opportunity for the parties involved, especially during extraordinary circumstances such as the Covid-19 pandemic. The Tribunal’s decision underscores the necessity of adhering to principles of natural justice in tax proceedings.
Order pronounced in the open Court on 27th November, 2020.
Accountant Member: N.K. Billaiya
Judicial Member: Amit Shukla
Louis Dreyfus Company India Pvt Ltd vs Pr. CIT – ITA 1442/DEL/2020
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform