Facts of the Case

The assessee, R. D. Singh Shikshan Seva Sansthan, is a society constituted on 10.08.2010 and registered with the Registrar of Societies, Uttar Pradesh. The assessee filed its returns of income declaring nil income for Assessment Years 2012-13 and 2014-15. The cases were selected for scrutiny and the Assessing Officer completed the assessments by determining total income of ₹24,27,470 for Assessment Year 2012-13 and ₹5,45,930 for Assessment Year 2014-15.

The Assessing Officer also initiated penalty proceedings under Section 271(1)(c) of the Income Tax Act and imposed penalties of ₹7,81,000 for Assessment Year 2012-13 and ₹1,56,000 for Assessment Year 2014-15. Aggrieved, the assessee preferred appeals before the Commissioner of Income Tax (Appeals). However, the CIT(A) dismissed the appeals through ex-parte orders dated 27.04.2023.

 Issues Involved

  1. Whether the Commissioner of Income Tax (Appeals) was justified in dismissing the appeals ex-parte.
  2. Whether passing appellate orders without granting adequate opportunity of hearing violates principles of natural justice.
  3. Whether such ex-parte orders are liable to be set aside and remanded for fresh adjudication.

 Petitioner’s (Assessee’s) Arguments

The assessee contended that the CIT(A) passed the impugned appellate orders without affording sufficient time and opportunity of being heard. It was submitted that the orders were passed in violation of principles of natural justice and, therefore, deserved to be set aside with a direction for fresh adjudication after granting reasonable opportunity to the assessee.

Respondent’s (Revenue’s) Arguments

The learned Senior Departmental Representative did not raise any serious objection and left the matter to the discretion of the Tribunal.

Court Order / Findings

The ITAT observed that the impugned appellate orders were passed without providing reasonable opportunity of hearing to the assessee. The Tribunal held that such ex-parte orders cannot be sustained in law. Accordingly, the ITAT set aside the appellate orders dated 27.04.2023 and restored the matters to the file of the CIT(A) with a direction to pass de novo orders in accordance with law after providing reasonable opportunity of being heard to the assessee.

Important Clarification / Legal Principle

An appellate authority is duty-bound to adjudicate appeals after granting adequate opportunity of hearing. Ex-parte dismissal of appeals without such opportunity violates principles of natural justice and renders the appellate orders unsustainable in law.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1770871229_R.D.SINHGSHIKSHANSEWASANSTHANPRAYAGRAJVS.INCOMETAXOFFICEREXEMPTIONWRADALLAHABADALLAHABAD.pdf  

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