Facts of the Case

The assessee, Badri Singh Sisodiya, filed appeals for Assessment Years 2013-14, 2014-15 and 2017-18 challenging three separate revision orders passed under Section 263 by the Principal Commissioner of Income Tax, Indore. The underlying assessments for all years were completed ex parte under Sections 147 read with Sections 144 and 144B by the National Faceless Assessment Centre. On examination of records, the Principal Commissioner observed that the assessments were erroneous and prejudicial to the interests of the Revenue and issued show-cause notices under Section 263. Due to non-participation by the assessee, the revision orders were also passed ex parte, setting aside the assessments and directing fresh examination by the Assessing Officer.

Issues Involved

Whether revision under Section 263 was valid when the assessee alleged service of notices on an incorrect email address, whether the assessments could be treated as erroneous and prejudicial to the interests of the Revenue, whether revision was permissible when appeals against assessment orders were pending before the CIT(A), and whether the matters deserved remand to the Principal Commissioner for fresh adjudication.

Petitioner’s Arguments

The assessee contended that the show-cause notices under Section 263 were issued to an incorrect email address and therefore the revision orders passed ex parte were invalid. It was further argued that the assessment orders were not erroneous or prejudicial to the interests of the Revenue and that revision proceedings could not be initiated when appeals on the same issues were already pending before the CIT(A). During the course of hearing, however, the assessee did not press for outright quashing of the revision orders and restricted the prayer to remanding the matters back to the file of the Principal Commissioner for fresh adjudication.

Respondent’s Arguments

The Revenue opposed remand and submitted that the assessee remained non-participative both during assessment proceedings and revision proceedings. It was argued that the Principal Commissioner merely set aside the assessments and directed de novo examination by the Assessing Officer, thereby granting the assessee adequate opportunity at the assessment stage itself. It was further submitted that the existence of pending appeals before the CIT(A) did not bar revision under Section 263 in the facts of the case.

Court Order / Findings

The ITAT Indore observed that the assessee consciously chose not to press the ground seeking quashing of the revision orders on the basis of alleged improper service of notice. The Tribunal noted that the assessments were completed ex parte due to non-cooperation by the assessee and that the revision orders merely set aside such assessments for fresh examination. The Tribunal accepted the Revenue’s contention that remanding the matters back to the Principal Commissioner would serve no useful purpose when the assessee would have full opportunity before the Assessing Officer in de novo assessment proceedings. The Tribunal further held that no infirmity was found in the revision orders passed under Section 263.

Important Clarification

The Tribunal clarified that an assessee who remains non-participative during assessment and revision proceedings cannot claim remand as a matter of right. Where revision orders merely direct fresh examination by the Assessing Officer, principles of natural justice are sufficiently safeguarded at the reassessment stage itself.

Final Outcome

All three appeals filed by the assessee for Assessment Years 2013-14, 2014-15 and 2017-18 were dismissed, and the revision orders passed under Section 263 by the Principal Commissioner of Income Tax, Indore were upheld in full.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769158687_BADRISINGHSISODIYAINDOREVS.PCITINDORE.pdf

 

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