Facts of the Case

The assessee, M/s Anil Kumar Sunil Kumar, is a partnership firm engaged in wholesale trading of hardware and sanitary fittings. For Assessment Year 2018-19, the Assessing Officer completed the assessment under Section 144 of the Income Tax Act on an ex-parte basis and assessed total income at ₹39,62,858 by making additions of ₹28,53,900 and ₹10,24,275.

Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). However, the CIT(A) dismissed the appeal vide order dated 06.12.2024. The assessee thereafter filed an appeal before the Income Tax Appellate Tribunal.

 

Issues Involved

  1. Whether an ex-parte assessment framed under Section 144 without adequate opportunity is sustainable.
  2. Whether dismissal of appeal by the CIT(A) through a non-speaking order violates principles of natural justice.
  3. Whether the matter deserves restoration for fresh adjudication.

 

Petitioner’s (Assessee’s) Arguments

The assessee submitted that the assessment order was framed ex-parte and that the CIT(A) also failed to pass a reasoned and speaking order. It was contended that no proper opportunity was granted to present the case either before the Assessing Officer or before the appellate authority. The assessee prayed that the matter be restored for fresh adjudication after granting reasonable opportunity of being heard.

 

Respondent’s (Revenue’s) Arguments

The learned Departmental Representative raised no objection to restoration of the matter and agreed that the case could be remanded for fresh consideration.

 

Court Order / Findings

The ITAT observed that the assessment order was passed ex-parte and that the appellate order of the CIT(A) was non-speaking. The Tribunal held that both the lower authorities failed to provide reasonable opportunity to the assessee, thereby violating principles of natural justice.

Accordingly, the ITAT set aside the impugned appellate order dated 06.12.2024 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 / Legal Principle

Even in best judgment assessments under Section 144, authorities are required to ensure adherence to principles of natural justice. Appellate orders must be reasoned and speaking. Ex-parte and non-speaking orders are unsustainable in law and liable to be set aside.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770872263_MSANILKUMARSUNILKUMARALLAHABADALLAHABADVS.DEPUTYCOMMISSIONEROFINCOMETAXCENTRALCIRCLEALLAHABAD.ALLAHABAD.pdf 

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