Facts of the Case

The assessee is an individual engaged in business as the proprietor of M/s Ashish Khad Bhandar. For the assessment year 2017-18, the Assessing Officer completed the assessment under section 144 of the Income Tax Act, 1961, vide order dated 30/10/2019, determining the total income of the assessee at ₹10,81,916. The assessment order was passed ex-parte.

Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). However, the appeal was dismissed ex-parte by the learned CIT(A) vide order dated 17/06/2024. The assessee thereafter filed an appeal before the Tribunal challenging the said appellate order.

 

Issues Involved

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

 

Petitioner’s (Assessee’s) Arguments

The assessee contended that neither the Assessing Officer nor the appellate authority provided reasonable opportunity of being heard. As a result, the assessee’s submissions on merits could not be considered at any stage of the proceedings, rendering both the orders legally untenable.

 

Respondent’s (Revenue’s) Arguments

The Revenue relied upon the orders passed by the lower authorities and opposed the appeal on merits.

 

Court Order / Findings

The Hon’ble Income Tax Appellate Tribunal, Allahabad Bench, observed that both the assessment order as well as the impugned appellate order were passed ex-parte and that reasonable opportunity of being heard was not provided to the assessee. The Tribunal further noted that the assessee’s submissions on merits were not considered either by the Assessing Officer or by the learned CIT(A).

In view of the violation of principles of natural justice, the Tribunal set aside the impugned appellate order and restored the issues relating to additions made in the assessment order 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

The appeal was allowed for statistical purposes. The Tribunal did not adjudicate the additions on merits and confined itself to addressing the procedural infirmity arising from denial of reasonable opportunity of hearing, reiterating that orders passed in violation of principles of natural justice cannot be sustained.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770875839_SEEMAPALBHARATPURVS.ITOWARD423KANNAUJKANNAUJ.pdf  

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