Facts of the Case

The assessee is an individual engaged in agricultural activities. For the assessment year 2016-17, the assessee did not file a return of income. During the relevant period, the assessee purchased an immovable property for ₹20,00,000 and paid stamp duty of ₹2,53,900. In addition, income from other sources amounting to ₹16,25,500 was noted. The Assessing Officer completed the assessment under section 147 read with section 144 of the Income Tax Act, 1961, determining total income at ₹38,79,400 and made additions of ₹22,53,900 under section 115BBE and ₹16,25,500 as income from other sources.

 

Issues Involved

Whether the assessment order and the appellate order passed ex-parte, without granting reasonable opportunity of being heard to the assessee, were sustainable in law.

 

Petitioner’s (Assessee’s) Arguments

The assessee filed the appeal belatedly along with an application seeking condonation of delay, contending that the delay was unintentional and beyond his control. It was further contended that the appellate order was passed ex-parte without providing reasonable opportunity of hearing, thereby violating principles of natural justice.

 

Respondent’s (Revenue’s) Arguments

The Revenue, represented by the Senior Departmental Representative, did not object to the condonation of delay application and relied upon the orders passed by the lower authorities.

 

Court Order / Findings

The Hon’ble Income Tax Appellate Tribunal, Allahabad Bench, observed that both the assessment order and the appellate order were passed ex-parte without affording reasonable opportunity of being heard to the assessee. The Tribunal held that such orders violate the principles of natural justice. Accordingly, the appellate order passed by the Commissioner of Income Tax (Appeals) was set aside, and the entire 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 hearing to the assessee.

 

Important Clarification

The appeal was allowed for statistical purposes. The Tribunal did not adjudicate on the merits of the additions and confined itself to addressing the procedural lapse relating to denial of opportunity of hearing, thereby reinforcing the legal position that compliance with principles of natural justice is mandatory in assessment proceedings.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770875614_HARISHCHANDARMISHRAALLAHABADVS.INCOMETAXOFFICER21ALLAHABADALLAHABAD.pdf 

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