PCIT Vs Universal Music India Pvt Ltd(Bombay High Court)
Date-19th April,2022

Sub-Whether CIT in terms of power available u/s 263 can travel beyond the terms of Show cause notice without giving any opportunity of hearing and ratio of judgement of Supreme Court in the case of CIT Vs Amitabh Bachchan (2016) 384 ITR 200(SC).

The Bombay high court in this case was considering an Appeal of department from the order of ITAT where the ITAT allowed the appeal of the assessee by holding the order u/s 263 to be against the law in view of the fact that no opportunity was given to the assessee to explain the issue relating to payment made to relatives u/s 40A(2)(b) which CIT directed AO to reexamine in addition to two other issues. The department relied on the decision in the case of Amitabh Bachchan(supra). However, the Ld Judges distinguishing the said judgement held that it is true that once show cause notice is issued by CIT u/s 263 his powers are not limited only to the issues as mentioned in the SCN but at the same time, the said judgement of Supreme Court cannot be of any help as CIT has to give an opportunity of hearing on all issues on which direction is given for revision notwithstanding the said issues may not form part of SCN.

The appeal of department was dismissed with costs. This judgement will be helpful in similar 263 proceedings

Ramesh Patodia
25-04-2022