IN INCOME TAX APPELLATE TRIBUNAL BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No. 1026/Ahd/2018 ( / Assessment Year 2013-14) Smt. Shardaben B. Patel / Pr. Commissioner of D-85, Shaktidhar Society, Vs. Income Tax-5 India Colony Road, 1st Floor, Narayan Bapunagar, Ahmedabad - Chambers, Near Patang 380024 Hotel, Ahmedabad - 380009 PAN/GIR No. ABCPP5208J (Appellant) (Respondent) Appellant by Shri Vijay Mehta, A.R. Shri O. P. Vaishnav, CIT.DR Respondent by : / Date of 09/08/2019 Hearing /Date of 25/09/2019 Pronouncement O R D E R PER PRADIP KUMAR KEDIA - AM captioned appeal has been filed at instance of assessee impugning revisional order dated 21.03.2018 passed b y Principal Commissioner of Income Tax, Ahmedabad-5 ( PCIT in short) under S. 263 of Income Tax Act, 1961 (the Act) in connection with assessment order passed b y AO under s.143(3) of Act dated 24.07.2015 for AY. 2013-14. I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 2 - 2. grounds of appeal raised b y assessee read as under: 1. Learned Principal Commissioner of Income Tax (Pr . CI T) erred in law and in facts of case in setting asi de assessment order u/s 143(3) dated 24.07.2015 to file of AO and in directing him to frame order de-novo. 2. Ld. Pr . CIT err ed in law and on facts of case in not providing proper opportunity of being heard to appellant and thus in violating principles of natural justice, before passing order u/s 263 of Income Tax Act. 3. As per grounds of appeal, essential grievance of assessee is that in facts and circumstances of case, Pr.C IT was not justified in exercising revisionary powers under s.263 of Act and thereb y setting aside assessment order passed under s.143(3) of Act with direction to AO to frame assessment afresh after proper examination, inquiry and verification with reference to long term capital gains of Rs.1,50,69,856/- derived b y assessee. To adjudicate grievance of assessee, it would be pertinent to take note of relevant facts. 3.1 assessee filed her return of income for AY 2013-14, declarin g total income at Rs.18,22,490/-. assessee inter alia claimed ex emption under s.10(38) of Act on account of long term capital gains o f Rs.1,50,69,856/- on sales of shares. return filed b y assessee was subjected to scrutiny assessment and assessment order was framed under s.143(3) of Act dated 24.07.2015 wherein capital gains so declared b y assessee was dul y accepted without y disturbance. assessment so framed b y AO under s.143(3) of Act was however could not met approval of PCIT, who invoked supervisionary jurisdiction provided under s.263 of Act and sought to modify impugned order passed b y AO. show cause notice dated 27.02.2018 was accordingl y issued in this regard alleging aforesaid assessment order to be erroneous and prejudicial to interest of Revenue. relevant portion of show cause notice is reproduced hereunder: I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 3 - During course of search proceedings detection of over 500 Cr. has been made on basi s of off market purchase of shares in both t he scrip KGN Industries Ltd and KGN Enterprise Lt d. wherein sale proceeds of shares were not br ought through Stock Exchange. On verification, it is noticed that assessee has booked bogus long term capital gain by transition in shares of M/s. KGN Enterprises to tune of Rs. 1,50,69,856/-. At time of assessment, t his information of fr audulent transaction was on records of AO but during course of assessment proceedings, AO has not verified or conducted any inquiry in respect of share transactions in respect of bogus claim LTCG and completed assess ment. 3.2 As per show cause notice reproduced above, PC IT essentiall y observed that assessee has booked bogus long term capital gains in share of KGN Enterprise Ltd. for which requisite inquiry was not carried out b y AO while completing assessment. 3.3 In response to show cause notice, assessee filed written repl y which is reproduced in para 4 of Revisional order impugned herein. same read as under: 4. In response to above notice, assessee filed written submission on 05/03/2018. In its reply assessee has mentioned that assessment order should not considered as erroneous and prejudicial to interest of revenue and consequentl y same should not be set- aside u/ 263 of Act or to be framed de-Novo after complete proper enquiries and verification. reply given to AO is repr oduced as under- i) It is mentioned in your captioned show cause notice that, during course of search proceedings detection of over 500cr has been made on basis of off market purchase of shares in both scrip KGN industries Ltd and KGN Enterprise Ltd wherein sale proceeds of shares were not brought through stock exchange. In response to same, I humbly submit that it is not clear from show cause notice as to on whom search was carried and how my sale transaction is being finked to it. 1 therefore request you good self to supply me following details: a. Where and in whose search was conducted? b. Statement recorded of concerned person during search. c What are seized materials of search? d. What is outcome in their search case? e. How is my trans action alleged to be not genuine? I humbly request that till full details are provided to me, no proper opportunity of being heard is considered to be given to me which i s mandate of section 263 of Act. Till such time I request your I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 4 - good self to treat my reply as interim reply and I should be allowed to make further submissions based on details provided to me. Further, it is very crucial to note that my purchas e transacti on was made from recognized broker and sale transactions through recognized stock exchange "NSE" as against allegation of sale not being any stock exchange as mentioned in your show cause notice. (ii) Your attention is drawn to provisions of section 263 of Act which is reproduced as under: Principal Commissioner or Commissioner may call for and examine record of any proceeding under this Act, and if he considers that any order passed therein by Assessing Officer is er roneous in so for as it is prejudicial to interest of revenue, he may, after gi ving assessee on opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as circumstances of case justify, Including on order enhancing or modifying assess ment, or cancelling assessment and dir ect fresh assess ment . " Therefore, pre requisite for applying provisions of section 263 of Act are not present in my case which is explained as under. iii) You have mentioned in your show cause notice at para 2(i), "On verification, it is noticed that assessee has booked bogus long term gain by trading in s hares of M/s. KGN Enterprises to tune of Rs.1,50,69,856/-. During course of assessment proceedings, AO has not verified share transactions i n respect of bogus cl aim of LTCG. " iv) I hereby, deny t he observation made by you as above. v) In this connection, I quote questionnaire (copy enclosed) issued by AO enclosed wi th notice u/s. 142(1) of Act dated 12-06- 2015, which at question no. 7 specifically called from me as under: details of dem at account, purchase/sale of shares and securities account with supporting evidences." vi) In response to same, I furnished details called for vide my submission (copy enclosed) dated 08-07-2015, wherein at point no. 3-5, 1 have submitted complete details of capital gains made by me amounting to Rs. 1,50,69,856/-. details submitted by me vide this submission is reproduced as below: "3. I am furnishing herewith copy of income-tax return, computation of income, profit and loss account, balance sheet and capital account. 4. Detail of bank account held by me is as under: I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 5 - Na m e o f th e b n k n d b r n ch Typ e o f /c. No . /c. Un io n Bank of I n d ia - S vin g 454802010573856 Bapunagar Meh sa n Na g ri k S h ka ri B n k- S vin g 3014 Bapunagar Copy of bank pass books ore bank books are submitted herewith. 5. In respect of long term capital gain from share Transactions, I am s ubmitting following det ails a. Copy of ledger account of share transactions b. Copy of s ales bills-12 bills c. Copy of debit note, delivery note, confirmation end ledger account from Vijay Bhagwandas & Co. for purchase of shares of KGN Enterprise d. Copy of ledger account from India Infoline Ltd." vii) Further, vide submiss ion dated 23-07-2015, I submitted my demat statements reflecting said scrip. (Copy enclosed). viii) It is pertinent to clarify that, purchases were made through Vijay Bhagwandas & Co, registered stock broker under SEBI. Details of purchases made thr ough broker and proper confirmation from stock broker were duly submitted to AO as reflected in point 6(c) above. I am submitting herewith annexur e reflecting sale and purchase of said s hares for your good self s reference and recor d. ix) These shares were held in demat account and were subsequentl y sold in National Stock Exchange (" NSE" ) through India Infoiine Ltd. details thereof were duly submitted to AO as reflected in point 6(d) above. x) entire transaction was reflected in bank statement submitted to AO as reflected in point 4 above. xi) Therefore, it gets confirmed that full details regarding purchase/sale of shar es were called for by AO and were dul y submitted by me. AO scrutinized all details and supporting evidences submitted by me and only after being fully Satisfied, he accepted claim of long term capital gains amounting to Rs . 1,50,69,856/-. xii) In view of above your honour's remar k in para 2(i ) for your show cause notice dated 27-02-2018 that AO has not verified said transaction and therefore asses sment order u/s. 143(3) of Act dated 24-07-2015 is erroneous and prejudicial to interest of revenue, thereby liable to be set aside, is not correct. I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 6 - xiii) AO is not empowered to apply his mind on same issue agai n and again especially when particular issue has been thoroughly examined and after proper verification assessee's ciaimeTias been accepted. xiv) In view of above submission, it is humbly submitted that t he order passed u/s. 143(3) of Act dated 24-07-2015 is not erroneous in so far as it is not prejudicial to interests of revenue. xv) Therefore, no proceeding u/.s 263 of Act should be initiated in my case since AO's order u/s. 143(3) of Act dated 24-07- 2015 does not require any modification. xvi) Without prejudice to above, if your honour come to conclusion for any reason to proceed ahead with matter, you are requested to verify/examine my clai m of capital gains once again now. xvii) Kindly place above on record, drop proceedings initiated u/s.263 of Act and oblige. 3.4 PC IT, however, was not impressed b y pleadings of assessee. PCIT in broader terms, observed in revisional order that information was received from Investigation Wing with reference to search in case of Glob Eco Logistics Group of Ahmedabad whereb y it was discovered that assessee is one of beneficiaries of bogus long terms capital gain in shares of KGN Enterprise Ltd. information was made available to AO on 01.07.2015 before conclusion of assessment. AO however has failed to make any verification and investigation in this case. In light of information available as per report of Investigation Wing, PCIT thereafter referred to contents of report and observed that as per report, assessee in connivance with brokers has abused process for laundering her undisclosed income in garb of long term capital gain. It was observed that AO has not conducted requisite inquiry in respect of such long term capital gains reported b y assessee except collecting customary documents like contract notes and calculation of long term capital gains etc. It was alleged that AO has failed to make y inquiry as to whether compan y namel y KGN Enterprise Ltd. possesses y economic and financial substance to justify phenomenal rise in share price and consequent capital gains. PCIT thus essentiall y noted that AO has not I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 7 - ventured into y inquiry in respect of impugned transactions and completed assessment under s.143(3) of Act mechanicall y and perfunctoril y. PCIT accordingly set aside and cancelled assessment order and directed AO to look into factual aspects and finalize assessment after giving reasonable opportunit y to assessee and pass afresh assessment order in accordance with law. 4. Aggrieved b y revisional directions of PCIT seeking to nullify assessment order passed b y AO in exercise of power under s.263 of Act, assessee preferred appeal before Tribunal. 5. learned AR for assessee reiterated various submissions made earlier before PCIT as noted in its order and pointed out that jurisdiction assumed b y PCIT is without sanction of law and revisional order passed thereon is unsustainable in law. learned AR for assessee made two fold objections of proceedings carried out under s.263 of Act; (i) assessment order is neither erroneous nor prejudicial to interest of Revenue & (ii) revisional order passed b y PCIT is in gross valuation of principles of natural justice and thus not tenable in law. Moving further, learned AR for assessee submitted that all documents pertaining to transactions giving rise to purchase and sale of shares in possession of assessee were provided to AO in course of assessment proceedings. On receipt of such documents, it is prerogative of AO to determine extent of inquiry thereon. observation of PCIT is in realm of inference without reference to y falsit y in documents filed. 5.1 learned AR thereafter adverted to serious lapse b y PCIT while setting aside original assessment order b y holding it as erroneous in so far as prejudicial to interest of Revenue is contemplated under s.263 of Act. learned AR referred to revisional order and submitted that in pursuance of show cause notice dated 27.02.2018, written repl y was promptl y filed within week s time on 05.03.2018. By aforesaid repl y, it was pointed out to PCIT that show cause I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 8 - notice issued is nondescript and do not reveal basis for making serious averments against assessee. PCIT was accordingly requested to suppl y certain details regarding name of person who are searched, statement of person searched, seized material found in search and outcome of search incriminating assessee in some manner. Delving further, learned AR pointed out that it was specificall y submitted to PCIT that in absence of material, it will not be possible to meet show cause notice and object of granting proper opportunit y of being heard as mandated under s.263 of Act will not be fulfilled. Whil e doing so, it was also pointed out to PC IT that purchase/sale transactions were made through recognized broker on platform of stock exchange as against allegation of sale not recorded in stock exchange platform. 5.2 learned AR pointed out that assessee expressl y denied allegations made by PCIT on lack of enquiry and referred to questionnaire issued by AO alongwith notice under s. 143(1) dated 12.06.2015 wherein specific inquiry was made on issue reads as under: details of demat account, purchase/sale of shares and securities account with supporting evidences. It was submitted that in response to aforesaid query, assessee has filed relevant evidence vide submission dated 08.07.2015. demat statement reflecting scrip in question was also provided. shares were held in demat account and entire accounts were reflected in bank statement submitted to AO which is not in dispute. It was thus contended that observations made in show cause notice that AO has not verified said transactions as wholl y incorrect. Our attention was thereafter adverted to para (xvi) of repl y as noted in para 5 of th e revisional order seeking verification of claim of long term capital gain at end of PC IT himself before drawing y adverse conclusion. 5.3 It was thereafter vociferousl y submitted that PC IT did not choose to respond to material asked to support non-descript show cause nor I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 9 - did y further correspondence with assessee while taking drastic step of setting aside statutory order. It was pointed out that PCIT merel y disagreed with contents of repl y of assessee filed in pursuance of solitary show cause and came to his own conclusions and that too in unequivocal terms. It was pointed out that PCIT himself has observed and concluded that assessee has abused process in connivance of brokers and laundered his own undisclosed income overlooking all replies made and all questions raised. revisional order was passed on 21.03.2018 i.e. within span of less than one month from date of issuance of solitary notice and singular repl y thereon of interim nature b y assessee as narrated. learned AR thus pointed out that text and tenor of order of PCIT make it undoubtedl y clear that PC IT himself has reached to adverse conclusion without y opportunit y and without confronting material in possession in this regard. It was submitted that act of setting aside original order and returning matter back to AO for further inquiry is onl y empt y formalit y and farce where adverse conclusion has alread y been drawn. In light of categorical assertions made b y PCIT, conclusion is forgone against assessee and AO was left with no discretion but to toe conclusion alread y drawn b y PCIT without y demur. whole exercise therefore has grievousl y injured assessee and has resulted in irreparable miscarriage of justice. It was thus concluded that such order is nullit y in eye of law. 5.4 learned AR in this regard referred to decision of co- ordinate bench of Tribunal in case of Tata Chemicals Limited vs. DCIT ITA No. 3127/Mum/10 order dated 30 t h June, 2011 for proposition that if ground of revision is not mentioned (similar to obscure reasoning in instant case) in show cause notice, it cannot be made basis of order for reason that assessee would have no opportunit y to meet point. learned AR in context submitted that co-ordinate bench had held that in circumstances as existing in present case, infringement of fundamental principles of natural justice would result in revisional order to be nullit y. Para Nos. 9 & 10 of order of co- I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 10 - ordinate bench was referred to buttress plea of order resulting in nullit y for such serious breach. 5.5 reference was made to decision of Hon ble Supreme Court in case of M/s. Andaman Timber Industries vs. Commissioner of Central Excise, Kolkata Civil Appeal No. 4228 of 2006 judgment dated 02.09.2015 to contend that when ratio of decision is applied, serious flaw in not allowing assessee to access basis of show cause notice when particularl y disputed, would lead to action of PCIT wholl y untenable and without authority of law. 5.6 It was reiterated that no material was confronted to assessee despite specific request and order was passed hurriedly without y opportunit y based on nondescript show cause notice and giving unilateral conclusive finding against assessee thereb y totall y curtailing statutory discretion of AO. Such act of PC IT is not in consonance with authoritative judicial pronouncement made in this regard. reference was made to yet another decision of Hon ble Supreme Court in CIT vs. Amitabh Bachchan (2016) 384 ITR 200 (SC) to contend that opportunit y to assessee to be heard on all issues is mandatory and conclusions drawn adverse to assessee in order of revision on issues not mentioned in notice is impermissible. It was contended that satisfaction to exercise jurisdiction under s.263 of Act is available subject to strict observance of principle of natural justice which is ingrained in requirement of Section itself. 5.7 Dwelling further, learned AR submitted that breach of principle of natural justice can t ypically happen in two ways; (i) competent authorit y passes order without giving reasonable opportunit y to deal with points raised and facts in issue or (ii) passes order without revealing facts itself despite having inquired into b y assessee. case of assessee falls in second category of breach which is far more stringent and has outrightl y deprived assessee of her right to make I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 11 - y effective representation to defend her case as contemplated in th e provisions of Section 263 of Act. 5.8 Mounting his defense further, learned AR thereafter referred to decision of Hon ble Delhi High Court in case of ITO vs D. G. Housing Project Ltd. (2012) 343 ITR 329 (Del) and contended that Revisional Commissioner cannot remit matter for fresh decision to AO to conduct further inquiries without making some minimal inquiry himself and come to some prima facie conclusion that tax which was lawfull y exigible has not been imposed. In instant case, consideration of Revisional Commissioner as to whether order is erroneous in so far as it is prejudicial to interest of Revenue is not based on underl ying material to implicate assessee in some manner. Despite being inquired, PCIT has not allowed assessee to participate in process of inquiry before him nor has PCIT made y inquiry to demonstrate alleged error or mistake made b y AO as held so assertivel y in revisional order. learned AR next contended that present case at best can be dubbed as case of inadequate investigation or inquiry and not case of total lack of inquiry per se in th e light of relevant material placed before him against specific query. It was thus contended that viewed from y angle rivisional action of PCIT laying blame on doorstep of assessee is not justified. 5.9 learned DR, on other hand, relied upon order of PC IT submitted that standard questionnaire putting few lines with respect to transactions of capital gain in question would not give rise to inference of inquiry contemplated in law that has to be carried out. It was contended that subsequent to receipt of Investigation Report on 01.07.2015 no inquiry was made b y AO in connection with issue in question and therefore order of AO clearl y suffers from gross lack of inquiry rendering it erroneous in so far as prejudicial to interest of Revenue. learned DR also submitted that matter was set aside to AO and thus no serious prejudice has been caused to assessee. It I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 12 - was thus contended that no interference with revisional order of th e PCIT is called for. 6. We have carefull y considered rival submissions. assessee has challenged assumption of revisionary jurisdiction under s.263 of Act as well as made imputations on serious lapse in abiding b y express mandate of opportunit y to assessee, while setting aside statutory order of lower authorities. assessee has delineated on aspects of principles of natural justice at length and has essentiall y contended that such gross neglect in providing effective opportunit y and serious transgression of principles of natural justice tantamount to illegalit y and consequentl y revisional order setting aside assessment order passed b y AO is not sustainable in law. 6.1 Having regard to length y and ardent defense on behalf of assessee, we consider it expedient to delineate on impact of palpable flaw in following principles of natural justice allegedl y committed b y Revisional Commissioner. It is case of assessee that solitary show cause notice was issued b y Revisional Commissioner on 27.02.2018 seeking to displace assessment order passed by AO under s.143(3) of Act in exercise of its statutory functions. assessee filed reply thereto within week s time strongl y objecting to averments made in show cause notice and asked for relevant background material to derive understanding on allegations made in show cause notice to enable it to defend its case in effective manner. assessee has also alleged that show cause notice itself is vague and nondescript without y reference to y objective information or material for making allegation adverse to assessee. It is thus case of assessee that solitary show cause notice issued b y PCIT is not focused on issue with desired objectivit y and same is cryptic and unintelligible. assessee thus reserved its right to submit proper repl y on addressing reddressal of points raised in interim repl y b y PCIT. No correspondence has been exchanged thereafter. whole action is marred b y lack of opportunit y. I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 13 - 6.2 We notice from case records that onl y solitary notice was issued to giving opportunit y to assessee to discuss as to wh y action under s.263 of Act should not be undertaken. As noted, assessee in its immediate repl y has pointed out lack of clarit y in show cause notice on vital aspects and sought particulars thereof alongwith requisite material for proper repl y and submitted that present repl y should be treated as interim repl y with caveat to make further submissions on obtaining requisite details as mentioned in repl y. It is also noticed that assessee has also pointed out factual incorrectness in assertions made in show cause notice viz. allegation of sales not being through stock exchange is incorrect. 6.3 We also notice that assessee has also demonstrated that all primary documents in relation to long term capital gains were dul y provided to AO without y demur which reflected occurrence of transactions in normal course on platform of stock ex change. Revisional Commissioner however has jettisoned all contentions of assessee raised as per its interim reply but remained silent as to wh y further opportunit y is not required and wh y material called for cannot be supplied for effective representation. As noticed, PCIT heavil y relied on certain information received from Investigation Wing in search proceedings in case of third part y. details of informatio n received were not provided to assessee at all at y stage of proceedings. As per para 8 of revisional order, PCIT has relied upon so-called information purportedl y received with which no-one is priv y to. whole action is thus self-virtuous and repugnant. Significantl y, PCIT has concluded in unequivocal terms and with degree of finalit y that assessee in connivance with brokers has abused process for laundering her undisclosed income in garb of bogus long term capital gains. assertions made in revisional order against assessee clearl y forecloses case against assessee with finalit y leaving no scope with AO to appl y his own mind, while directing him to make all inquiries and investigations. direction to AO make inquiries is ostensibl y empt y formalit y leaving no libert y with AO I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 14 - to think differentl y. result is thus foregone conclusion. direction to make enquiry clearl y lacks purpose. Except solitary correspondence, there is no reference to y other opportunit y. whole process has begun with show cause notice and culminated with hurried revisional order in about month s time based on one correspondence of incomplete and shallow nature. 6.4 In this backdrop, we need to ascertain justification in action of PCIT. 6.5 It is ostensible from sequence of events that action of Revisional Commissioner is in negation of overriding principles of natural justice which were explicitl y required to be followed while exercising authorit y under s.263 of Act. Section 263 of Act expressl y provides for giving opportunit y of being heard to assessee before passing revisional order. Such opportunit y thus has serious connotations in context of revisional jurisdiction. object is obvious, it is meant to enable assessee to understand what is weighed against him to suitabl y defend his position. Needless to say, opportunit y to be given to assessee must be real, effective and realistic. notional opportunit y would tantamount to mere empt y formalit y and would naturall y not meet express intent of law. Revisional CIT has chosen to remain silent on contents of interim repl y filed b y assessee. As quipped on behalf of assessee, vagueness and ambiguit y in show cause notice has defeated right of reasonable opportunit y of assessee to effectivel y defend its case. Thus, allegation of show cause notice being illusory is somewhat stark. basic canons of natural justice are found to be dispensed with. 6.6 It is trite that right to fair hearing is guaranteed right of assessee. Every person before authority exercising adjudicatory powers has right to know evidence to be used against him. suppl y of documents relied upon would, in our view, be necessary to set law in motion. It is difficult to comprehend full facts from show cause notice I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 15 - and consequentl y insistence for suppl y of relevant information possessed b y revisional authorit y cannot be regarded as unreasonable insistence. letter of law in Section 263 of Act is express and founded on principles of natural justice, which in present case is scantl y fulfilled. action of Revisional Commissioner was continued in violation of this cardinal requirement. assessee is sought to be visited with civil consequences on basis of s ymbolic compliance of requirement. context holds key while examining extent to which violation of natural justice has impacted other side. granting of effective opportunity is sin qua non in Section 263 of Act for unsetting statutory order. It is duty of Revisional Commissioner to provide assessee effective opportunit y to enable it to disengage truth from wrongs instead of taking eas y course of rejecting repl y in its entirel y solel y on ground that same is not acceptable. At this juncture, it would be pertinent to quote observations of co- ordinate bench in Tata Chemicals Limited vs. DCIT ITA No. 3127/Mum/1 0 order dated 30 t h June, 2011 as extracted below: 9. In case of Synergy Enterprises Solutions Pvt Ltd Vs DCI T (I TA No 2076/Mum/2010; order dated 31" March 2011] , coordinate bench had occasion to deal with materially identical situation. As held in this decision, following Maxpack Investments 13 SOT 67 (Del), G.K. Kabra 211 ITR 336 (AP) and Jagadhri Electric Supply 140 ITR 490 (P &H), if ground of revision is not mentioned in show-caus e notice, it cannot be made basis of order for reason that assessee would have had no opportunity to meet point . While learned Departmental Repres entative does not dispute this position and that decision of coordi nate bench s quarely covers issue, he ur ges us to at best remit matt er to file of CIT so as assessee can be given opportunity to meet point on which revision powers are exercised, even though, according to learned Departmental Representative, strictly speaking even this partial relief is not due to assesse because subject matter of revision has remained s ame as was set out in notice, i.e. deduction under section 80 IA in respect of notional sale of steam. We are unable to see any legally sustainable merits in stand of learned Departmental Representative. Whil e subject matter of revision may have been t he same as in s how cause notice, ground on which revision was s ought to be done in t he show cause notice is mater ially different than t he ground on which revision powers arc actually exercised. As such, as sessee had no opport unity to defend on ground which is ultimately decided against him. It is well settled legal position, as we have seen in erudite discuss ions in Maxpack decision (s upra), that revision powers can not be exercised on ground which has not been put to assessee. In any case, it is one of I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 16 - fundamental principl es of natural justi ce that no pers on can be condemned unhear d i,e audi alterant partem, and impugned revision order was thus passed in violation of pr inciples of natural jus tice. As for plea that matter should be remi tted to file of learned Commissioner for aff ording assessee opportunity of hear ing, we find what is in challenge before us is revision order passed by learned Commissioner , and, as we have noted above, said order is legally unsustainable in law, and quashed accordingly. As observed by Special Bench of this Tribunal in case of Colonizers Vs. ACIT (41 1TD SB 57), violation of principles of justice, as has happened in this case, results in order being rendered null and void. Special Bench has, inter alia, observed as follows: As it has been discuss ed in earlier paragraph there are plethor of cases holding that violation of principles of natural justice makes decision void as in every other case ultra vires. rules of natural justice operate as implied mandatory requirement, non-observance of which amounts to arbitrariness and discrimination. pr inciples of natural jus tice have been elevated to status of fundamental rights guaranteed in Constitution of India as is evident from decision of Full Bench of Hon'ble Supreme Court in case of Union of India vs. Tulsiram Patel & Ors. reported in AIR 1985 SC1416 at 1469, holding that principle of natur al justice have thus come to be recognised as being pan of guarantee contained in Article 14 of t he Constitution of India because of new and dynami c interpretation given by Supreme Court to concept of equality which is subject-matter of that Article and that violation of principles of natural justice by State action is violation of Article 14, quasi-judicial or administrative decision rendered or order made in violation of t he rule of audi alteram partem is null and void and order made in such case can be struck down as inval id on that score alone (Maneka Gandhi vs. Union of India AIR 1978 SC 597; Gangadharan Pillai vs. ACE D (1978) 8 CTR (Ker ) 352 : (1980) 126 I TR 356 (Ker ) at pp. 365 to 367). In other words, order which infringes fundamental principle, passed in violation of audi alteram partem r ule, is nullity. When competent Court or author ity holds such order as invalid or sets it aside, impugned order becomes null and void. (Nb. Khan Abbas Khan vs. State of Guj arat AIR 1974 SC 1471 at 1479). 10. Once we come to conclusion that impugned order is null and void, it is not for us to advise Commissioner as to what should he do. He is always at libert y to do whatever acti on he can take in accordance with law, but we cannot give life to null and void order by r emitting it back to learned Commissioner for giving opportunity of passing fresh order after giving assessee opportunity of hearing. In case, it is possible for Commissioner to pass fresh order at this stage, in accordance with scheme of Act, he can very well do so, but in case time limit for passing such order has already expired, we cannot extend same by directing him to pass order afresh after giving opportunity of hearing to assessee. As for learned Departmental Representative's suggestion that no real prejudice is caused to legitimate interests of assessee since by way of impugned order I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 17 - learned Commissioner has only directed fresh decision of Assessing Officer on merits and in accordance with law, all we can say i s that if we are to uphold such contention, we will have bury concept of finality of assessment deep and ignore statutory limitations on powers of revenue authorities to tinker with assessments altogether. Learned Departmental Repres entative's argument is thus clearly contrary to scheme of Act. For all these reasons, we reject submissions of Departmental Representatives, and quash impugned revision or der on ground that revision is done on ground other than ground set out in show cause not ice. assessee gets relief accordingly. However, as we have quas hed impugned revision order on technical gr ound set out above, we see no need to deal with merits of other arguments raised by assessee. co-ordinate bench has thus concluded that such lack of opportunit y would render revisional order nullit y and accordingl y quashed revisional order. 6.7 To reiterate, grounds for revision in show cause notice is vague and opportunity given to assessee is effectivel y no opportunit y despite express request. action of Revisional Commissioner in violation of express mandate of Section 263 of Act cannot thus be countenanced. question may momentaril y arise that gaffes in following principles of natural justice is onl y procedural irregularit y and therefore matter should be restored to file of PCIT to restart proceedings from place where irregularit y has occurred. We are not inclined to agree. opportunit y was specificall y sought but denied. breach of sacrosanct opportunit y expressly enjoined b y legislature in Section 263 of Act is fundamental and goes to root of issue. It is not open to proceed to frame revisional order b y overriding express intent of law. Such flaw is fatal which seeks to ensue civil consequences and effects rights of assessee in completed matter. provisions of Section 263 of Act expressl y enjoin providing opportunit y. assessee had on its part has exercised its right to seek background information to enable it to file informed defense. dissuasion of such categorical request renders action of Revisional Commissioner incompetent in law. total absence of opportunit y alone renders revisional order null and void. I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 18 - 6.8 We however also peep into another line of defense on behalf of assessee. assessee has admittedl y filed primary evidence in course of assessment. PC IT however seeks to rel y upon certain additional information which appears to transcend bonafides of th e transactions. It was thus incumbent upon PC IT to undertake minimal inquiry himself with regard to claim of bonafides before remanding matter back to AO. 6.9 Most significantl y, in instant case, as noted above, matter has been remanded to actuall y carry out conclusions alread y drawn b y th e PCIT unilaterall y which conclusions gives infallible impression of it being absolute and rigid. PCIT has thus actuall y foreclosed matter without opportunit y. Therefore, whole exercise of remanding matter back to AO is onl y pretense and empt y formalit y. Such act of PCIT thus cannot be endorsed when seen in entiret y. contentions of assessee on palpable illegalit y in order passed under s.263 of Act merits acceptance. 6.10 To sum up, revisional action under Section 263 of Act in unsustainable in law on two counts; (i) revisional action which began with nondescript notice and culminated in revisional order without y effective opportunity despite specific request is order passed in blatant transgression of natural justice & (ii) Revisional CIT made unflinching and adverse conclusion in league of finalit y (without granting y opportunit y) and closed door for assessee before AO while setting aside order of AO. enquiry or investigation set in motion in proceedings before AO in pursuance to revisional order is clearl y pretense and empt y formalit y. AO was effectivel y asked to obduratel y adhere to pre-conceived observations made in revisional order of ex parte nature. Such directions are clearl y unsustainable. 6.11 Hence, in view of fatal error committed towards lack of effective opportunit y and conclusive averments made in revisional order, I T N o . 1 0 2 6 / Ah d / 1 8 [ S m t . S h r d b e n B . P t e l v s . P r . C I T ] A. Y . 2 0 1 3 - 1 4 - 19 - consequential action of setting aside assessment order is nullit y. Such revisional order thus deserves to merge in void and disappear. Hence, we thus do not consider it necessary to dwell upon other aspects of maintainabilit y of revisional order. We may however hasten to add at this juncture that our observations are limited to correctness of process of framing revisional order under s.263 of Act and should not in y manner be read as our expressions on merits. 6.12 order of Revisional Commissioner is thus vitiated and consequentl y bad in law. impugned order under s.263 of Act is accordingl y set aside and quashed. 7. In result, appeal of assessee is allowed. This Order pronounced in Open Court on 25/09/2019 Sd/- Sd/- (RAJPAL YADAV) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 25/09/2019 True Copy S. K. SINHA Copy of Order Forwarded to- 1. Revenue 2. Assessee 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. 9 / Guard file. By order Shardaben B. Patel v. Pr. Commissioner of Income-tax-5, Ahmedabad