Facts of the Case

The assessee filed an appeal before the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals) relating to the relevant assessment year. The assessment had been completed under Section 143(3) of the Income-tax Act, resulting in various additions. The CIT(A) disposed of the appeal ex-parte due to non-appearance of the assessee.

Issues Involved

  1. Whether the ex-parte order passed by the CIT(A) without hearing the assessee was valid in law.
  2. Whether dismissal of the appeal without a speaking order violated the principles of natural justice.
  3. Whether the matter required restoration for fresh adjudication after granting proper opportunity.

Petitioner’s (Assessee’s) Arguments

  • The assessee submitted that notices of hearing were not effectively received.
  • It was contended that the appellate order was passed without granting reasonable opportunity of being heard.
  • The ex-parte disposal resulted in denial of natural justice.
  • The assessee requested that the matter be remanded for decision on merits after proper hearing.

Respondent’s (Revenue’s) Arguments

  • The Revenue argued that the CIT(A) had issued notices of hearing.
  • Adequate opportunities were provided to the assessee to present the case.
  • In the absence of appearance or submissions, the CIT(A) was justified in deciding the appeal ex-parte.

Court Order / Findings (ITAT Allahabad)

The Tribunal observed that appellate proceedings before the CIT(A) are quasi-judicial in nature and must adhere to the principles of natural justice. Passing an ex-parte order without ensuring effective opportunity of hearing is not sustainable.

Accordingly, the ITAT set aside the order of the CIT(A) and restored the matter to the file of the appellate authority for fresh adjudication after providing reasonable opportunity to the assessee.

Important Clarification

The Tribunal emphasized that the first appellate authority must pass a reasoned and speaking order after considering the submissions and evidence of the assessee. The duty to ensure fair hearing cannot be dispensed with merely due to non-appearance, especially where the consequences involve substantial tax liability.

 Link to download the order –

https://itat.gov.in/public/files/upload/1606285198-Ram%20babu.pdf

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