Facts of the Case

The assessee is an individual who did not file a return of income for the assessment year 2017-18. Based on information obtained during online verification relating to cash deposits during the demonetisation period, the Department identified that the assessee had deposited cash amounting to ₹31,54,300 in his bank account. The Assessing Officer completed the assessment under section 144 of the Income Tax Act, 1961, assessed total income at ₹4,08,000, and made an addition of ₹4,08,000 under section 69A of the Act.

Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). However, the appeal was dismissed ex-parte by the learned ADDL/JCIT(A) vide order dated 07/02/2024. The assessee thereafter filed an appeal before the Tribunal.

 

Issues Involved

Whether the ex-parte appellate order passed without granting reasonable opportunity of hearing and without passing a speaking order in compliance with section 250(6) of the Income Tax Act was sustainable in law.

 

Petitioner’s (Assessee’s) Arguments

The assessee filed the appeal with a delay and submitted that the delay was unintentional and beyond his control. It was contended that both the assessment proceedings and the appellate proceedings were concluded without granting sufficient opportunity of being heard and that the appellate authority failed to adjudicate the grounds of appeal on merits as mandated under law.

 

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, leaving the matter to the discretion of the Tribunal.

 

Court Order / Findings

The Hon’ble Income Tax Appellate Tribunal, Allahabad Bench, observed that the Assessing Officer as well as the appellate authority had passed orders without affording sufficient opportunity to the assessee. The Tribunal further noted that the learned CIT(A) dismissed the appeal in a summary manner without passing a speaking order on merits, in clear violation of section 250(6) of the Income Tax Act.

Accordingly, the impugned appellate order dated 07/02/2024 was set aside and the matter was restored to the file of the learned CIT(A) with a direction to pass a reasoned and speaking order in accordance with law after providing reasonable opportunity of being heard to the assessee.

 

Important Clarification

The appeal was allowed for statistical purposes. The Tribunal did not adjudicate the additions on merits and confined its decision to procedural infirmities, reiterating that passing a speaking order under section 250(6) and adherence to principles of natural justice are mandatory in appellate proceedings.

 

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770875713_ISRAILCHITRAKOOTVS.INCOMETAXOFFICERBANDA.pdf  

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