The court held that providing only one short-notice opportunity for hearing violates the principles of natural justice, requiring the matter to be remanded to the PCIT for fresh adjudication after granting sufficient opportunity to the assessee.

ORDER

PER: SUNIL KUMAR SINGH, JM.

This appeal has been preferred against the impugned order dated 27.03.2023 passed in revision no. Pr.CIT/GWL/263/2022-23 by the PCIT, Gwalior[hereinafter referred to as the “PCIT”] u/s. 263 of the Income tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year A.Y. 2018-19, wherein learned PCIT has set aside the assessment order dated 07.04.2021 passed u/s.143(3) rws 143(3A) and 143(3B) of the Act on the ground of being erroneous in so far as it is prejudicial to the interest of revenue, directing the assessing officer to re-examine the issue after necessary verification inquiry and investigation in respect of excess and unexplained expenses.

2. At the very outset, we notice that this appeal is time barred by 975 days. Ld representative for the assessee has drawn the attention of the bench towards assessee’s delay condonation application and the affidavit filed on behalf of assessee, stating that the notices during the proceeding u/s. 263 were issued through electronic mode and the physical notice was not served upon the appellant. The appellant was unaware of the revisional proceedings. It was only when the appellant’s consultant noticed the revisional order uploaded in the e-proceeding tab, the appellant was informed accordingly on 31.12.2025. Prior to this, assessee had no knowledge of the impugned order. Prayed to condone the said delay. In view of the above explanation of assessee, having no knowledge of the impugned order, supported with uncontroverted affidavit, we treat assessee’s explanation as sufficient and condone the delay caused in filing this appeal.

3. Perused the records. Heard ld representative for the assessee and ld Sr DR for the respondent revenue.

4. Ld representative for the assessee has submitted that ld PCIT has passed the impugned order without providing sufficient opportunity of hearing to the assessee in gross violation of the principles of natural justice.

5. Ld Sr DR for the respondent revenue has supported the impugned order.

6. We notice that Ld. PCIT has provided only one opportunity of hearing to the assessee by issuance of notice dated 13.03.2023 fixing the date of compliance on 23.03.2023 only. In such circumstances and in the interest of justice and fair play, we deem it just and appropriate to remit the matter back to the file of learned PCIT for adjudication on merits and to pass speaking order afresh after affording sufficient opportunity of hearing to the assessee. We direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the learned PCIT for the expeditious and effective disposal. Needless to say, that ld PCIT shall ensure the observance of the principles of natural justice. It is made clear that we have not made any observation in respect of the merits of the case. The appeal is liable to be allowed for statistical purposes.

7. In the result, assessee’s appeal is allowed for statistical purposes. Impugned order dated 27.03.2023 is set aside.