Facts of the Case

 The assessee, Shri Shatrughan Maurya, did not file his return of income for Assessment Year 2018-19. Based on information available with the Department, it was noted that the assessee had deposited cash amounting to ₹1,77,56,946 and withdrawn cash amounting to ₹4,37,17,288 from his bank account during the relevant period.

 The Assessing Officer issued notice under Section 148 of the Income Tax Act. As there was no compliance from the assessee, the assessment was completed ex-parte under Sections 147 read with 144 and 144B of the Act, determining total income at ₹2,20,01,884.

 Aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). However, the CIT(A) dismissed the appeal for want of prosecution vide order dated 18.10.2024, which was also passed ex-parte. The assessee thereafter preferred an appeal before the Income Tax Appellate Tribunal.

 Issues Involved

 Whether reassessment completed ex-parte under Sections 147/144 without reasonable opportunity is sustainable.

 Whether dismissal of appeal by the CIT(A) for non-prosecution without effective opportunity violates principles of natural justice.

 Whether the matter deserved restoration 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 upon the orders passed by the Assessing Officer and the CIT(A). The Tribunal examined the matter based on the records available.

 Court Order / Findings

 The ITAT observed that both the assessment order and the appellate order were passed ex-parte without granting reasonable opportunity of being heard to the assessee. The Tribunal held that such orders are in violation of principles of natural justice.Accordingly, the ITAT set aside the impugned appellate order and restored the matter 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

Even in cases involving reassessment and alleged large cash transactions, authorities are bound to provide reasonable opportunity of hearing. Ex-parte assessment and appellate orders passed without such opportunity are unsustainable in law and liable to be set aside.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770872081_SHATRUGHANMAURYABHADOHIVS.AUITDALLAHABAD.pdf  

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