Facts of the Case

The assessee, Mr. Ajit Tripathi, filed an appeal before the Income Tax Appellate Tribunal against the order passed by the National Faceless Appeal Centre (NFAC), New Delhi, which had confirmed the assessment made by the Assessing Officer.

The assessment had been completed ex-parte due to alleged non-compliance by the assessee during proceedings. Consequently, additions were made to income based on available material on record.

The assessee contended that he was prevented by reasonable cause from properly participating in the proceedings and that adequate opportunity of hearing was not granted.

Isues Involved

  1. Whether assessment framed ex-parte without effective opportunity of hearing is sustainable.
  2. Whether appellate order passed without proper consideration of assessee’s submissions violates principles of natural justice.
  3. Whether the matter should be restored for fresh adjudication.

Petitioner’s Arguments (Assessee)

  • The assessment order was passed without granting reasonable opportunity to present the case.
  • Non-appearance was due to genuine circumstances beyond control.
  • Additions were made without proper verification or supporting evidence.
  • The appellate authority also dismissed the appeal without adequately addressing submissions.
  • Therefore, the orders deserved to be set aside and the matter restored for fresh consideration.

Respondent’s Arguments (Revenue)

  • The assessee failed to comply with statutory notices during assessment proceedings.
  • Sufficient opportunities had been provided.
  • The assessment was completed based on material available on record.
  • The appellate authority rightly upheld the assessment.

Court Order / Findings (ITAT)

The Tribunal observed that:

  • The assessment had been completed ex-parte.
  • The appellate authority also disposed of the appeal without detailed examination of the merits.
  • Proper opportunity of hearing is fundamental to fair adjudication.
  • When reasonable cause is shown, the matter should be restored to enable effective participation.

The Tribunal held that:

Orders passed in violation of principles of natural justice cannot be sustained.
 The assessee should be granted one more opportunity to present the case.
 Interests of justice require fresh adjudication on merits.

Accordingly, the Tribunal set aside the orders of the lower authorities and restored the matter to the Assessing Officer for fresh assessment after providing adequate opportunity of hearing to the assessee.

The assessee was also directed to cooperate in the proceedings and not to seek unnecessary adjournments.

Important Clarification

The Tribunal emphasized that:

  • Natural justice is a foundational requirement in tax proceedings.
  • Ex-parte orders should be avoided where possible.
  • Fair opportunity must precede adverse determination of tax liability.
  • Restoration does not decide the merits but ensures due process.

Link to download the order  

 -https://itat.gov.in/public/files/upload/1676528902-ITA%20No.%2039%20Alld%202022%20Ajit%20Tripathi.pdf

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