Whether benefit of extended period of limitation under explanation 3 of Sec. 153(3) and Sec.267 to pass assessment order pursuant to finding/ direction of appellate authority available if assessee was not given a specific opportunity of being heard?

Last updated: 14 June 2014

Court :
ITAT Agra

Brief :
The assessee is a trustee in three different trusts. CIT(A) held that the trusts were not valid trusts since they did not come into existence in accordance with Section 6 of Indian Trusts Act” and its income should be taxed in hands of all the trustees. CIT(A) passed assessment order u/s 267 r.w.s. 251 in the assessee’s case and assessed the income in his hands without giving the trustees an opportunity of being heard. The assessee filed an appeal before the tribunal for not being given opportunity of being heard by CIT(A). It was held that according to explanation 3 of Sec. 153(3), the time limit of making an assessment or direction does not apply if the person was given a specific opportunity of being heard before passing of order. It is only when the Assessing Officer can demonstrate that this assessee was given a specific opportunity of hearing, before the appellate order that was passed in the cases the three trusts, the impugned assessment order can be treated as legally valid. Thus the matter stands restored to the file of the Assessing Officer.

Citation :
Gaurav Luthara "Appellant" Versus - Income Tax Officer - Respondent