The court established that lack of necessary inquiry by the revisionary authority under Section 263 renders its order inappropriate and subject to dismissal.

आदेश/ORDER

PER BENCH:

These appeals preferred by the different assessees against the separate orders of the Learned Principal Commissioner of Income Tax (Central), (hereinafter in short "the Ld.PCIT”), Chennai-1, all dated 16.03.2024 for the Assessment Years (hereinafter in short "AY”) 2014-15, 2015-16, 2016-17 and 2018-19. The common issue is raised in these appeals, hence, they were heard together and are being disposed off by this consolidated order. For the purpose of adjudication, facts from AY 2014-15 have been culled out, wherein the grounds raised by the assessee are as under:

“1. That the Order of the Ld. Pr. CIT is erroneous on the facts and the merits of the case and provisions of Law as well and hence requires to be quashed.

2. That the Ld. Pr. CIT erred in passing an order u/s.263 without adhering to the principles of natural justice, proven by the fact that the appellant was not granted sufficient time to respond to the show-cause notice, thus violating the maxim of audi alteram partem.

3. That Ld. Pr. CIT erred in passing an order u/s.263 without adhering to the conditions laid down u/s.263(1) which emphasizes that in order to categorise an order passed by a subordinate to be erroneous, the revisionary authority is dutybound to conduct make or cause such enquiry to be made before passing the order u/s.263.

4. That the Ld. Pr. CIT erred in failing to appreciate the decision of the Hon'ble Supreme Court in the case of Pr. CIT v. Earth Minerals Co. Ltd. [2024] 162 taxmann.com 273 (SC) which enforces the point raised in Ground No.2.”

2. There was a delay of 257 days in filing the appeal by the above assessees. The Ld.DR stated in the affidavit for condonation of delay that due to fault of previous Auditor of the assessee, order u/s.263 of the Act was not contested before the ITAT. Moreover, he wrongly opined that since the order is only set aside to redo the assessments, claims of appellants with regard to reduction u/s.24(b) would still prevail. Therefore, the appeals could not be filed within the stipulated period and hence, the present A.R for the assessee seeks for condonation of delay. Having found the reason stated comes under reasonable cause for the delay, we condone the delay in filing of appeals and admitted the same for adjudication.

3. Briefly stated, an action u/s.133A of the Income Tax Act , 1961 (hereinafter in short „the Act‟) was conducted in the case of the assessee on 22.03.2018 and as a result, the assessment for the above years were reopened and subsequently after appropriate inquiries made through issue of multiple notices u/s.142(1), the assessment orders were finally concluded on 30.03.2022 u/s.147, arriving at a taxable income as under:

Assessee: Perinba Raja Ramesh

Assessee: PaulpandianUthamraj Winston:

4. According to the Principal Commissioner of Income-tax, (Central) Chennai-1, the above assessment orders passed by the Assessing Officer were erroneous as well as prejudicial to the interest of Revenue as per Clause (a) of Explanation 2 to Sec. 263 and without providing adequate opportunity of being heard to the assessee, the order u/s.263 was passed, to examine a specific issue of allowance of interest u/s.24(b), as according to the Pr.CIT, the assessment orders were passed without making enquiries or verification which should have been made, before allowing the deduction in respect of