Facts of the Case

The assessee, Shri Mukesh Kumar Tiwari, did not file his return of income for Assessment Year 2017-18. The Assessing Officer issued notice under Section 142(1) of the Income Tax Act on 14.03.2018 requiring the assessee to file his return of income. As there was no compliance, the Assessing Officer completed the assessment ex-parte under Section 144 of the Act and assessed the total income at ₹12,05,430.

Aggrieved by the ex-parte assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). However, the CIT(A) dismissed the appeal vide order dated 20.08.2024. The assessee thereafter filed an appeal before the Income Tax Appellate Tribunal.

Issues Involved

  1. Whether the ex-parte assessment under Section 144 without effective participation of the assessee was sustainable.
  2. Whether dismissal of the appeal by the CIT(A) without granting reasonable opportunity of hearing violated principles of natural justice.
  3. Whether the appellate order deserved to be set aside and remanded for fresh adjudication.

 Petitioner’s (Assessee’s) Position

There was no representation from the assessee’s side at the time of hearing before the Tribunal.

 Respondent’s (Revenue’s) Arguments

The learned Departmental Representative relied on the orders passed by the lower authorities. The Tribunal proceeded to decide the matter based on records available on file.

 Court Order / Findings

The ITAT observed that the assessment order was passed ex-parte under Section 144 of the Act. It was further noted that the CIT(A) also failed to provide reasonable opportunity to the assessee before dismissing the appeal.

In view of the violation of principles of natural justice, the Tribunal set aside the impugned appellate order dated 20.08.2024 and restored the matter to the file of the CIT(A) with a direction to pass a de novo order on merits in accordance with law after providing reasonable opportunity of being heard to the assessee.

The appeal was allowed for statistical purposes.

 Important Clarification / Legal Principle

Even in cases of best judgment assessment under Section 144, appellate authorities are duty-bound to provide reasonable opportunity of hearing. Ex-parte dismissal of appeal without such opportunity violates principles of natural justice and renders the appellate order unsustainable in law.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1770871988_MUKESHKUMARTIWARIAMETHIVS.ITDNFACDELHI.pdf  

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