Facts of the Case

The assessee, an individual, filed his return of income for Assessment Year 2017-18 declaring total income of ₹5,07,000. The Assessing Officer completed the assessment under section 143(3) of the Income Tax Act, 1961 and determined the total income at ₹14,07,130.Aggrieved by the assessment order, the assessee preferred an appeal before the appellate authority. The appeal was dismissed for non-prosecution by the learned Addl./Joint Commissioner of Income Tax (Appeals). The assessee thereafter filed an appeal before the Income Tax Appellate Tribunal.

 Issues Involved

  1. Whether dismissal of an appeal for non-prosecution without adjudication on merits is sustainable in law.
  2. Whether the appellate order passed ex-parte violates principles of natural justice.
  3. Whether the matter requires restoration for fresh assessment after granting reasonable opportunity.

 Petitioner’s Arguments

The assessee submitted that the impugned appellate order was passed ex-parte without granting reasonable opportunity of being heard. It was contended that the dismissal for non-prosecution was unjustified and that the matter should be restored for fresh adjudication in accordance with law.

 Respondent’s Arguments

The learned Departmental Representative did not object to the request for restoration and left the matter to the discretion of the Tribunal.

 Court Order / Findings

The Tribunal observed that the appellate order was passed ex-parte and that the assessee was not provided reasonable opportunity of hearing. Considering the submissions of the assessee and the absence of objection from the Revenue, the Tribunal held that the impugned appellate order could not be sustained.

Accordingly, the order of the learned Addl./Joint Commissioner of Income Tax (Appeals) was set aside and the matter was restored to the file of the Assessing Officer with a direction to pass a de novo assessment order in accordance with law after providing reasonable opportunity of being heard to the assessee.

 Important Clarification

The Tribunal reiterated that dismissal of appeals for non-prosecution without examining the issues on merits and without affording reasonable opportunity violates principles of natural justice. Tax proceedings should ordinarily be decided on merits after granting adequate opportunity to the assessee.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1770628628_SHIRISHJAISWALPRATAGARHVS.ITOPRATAPGARHPRATAPGARH.pdf

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