Facts of the Case

The assessee, an individual, filed his return of income for Assessment Year 2021-22 declaring total income of ₹34,55,680. The Assessing Officer completed the assessment under section 143(3) read with section 144B of the Income-tax Act, 1961 and determined total income at ₹1,46,60,349 by making various additions.

Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). However, the learned CIT(A) dismissed the appeal for non-prosecution. The assessee, being further aggrieved, carried the matter in appeal before the Income Tax Appellate Tribunal.

 

Issues Involved

  1. Whether dismissal of appeal by the CIT(A) for non-prosecution was justified.
  2. Whether assessment and appellate orders passed ex-parte without granting reasonable opportunity are sustainable in law.
  3. Whether the matter deserved to be restored for de novo adjudication.

 

Petitioner’s Arguments

The assessee submitted that due to old age and medical illness, he was unable to attend appellate proceedings before the CIT(A). It was further contended that even during assessment proceedings, reasonable opportunity was not granted. Medical records were placed on record to substantiate the inability to participate in proceedings. The assessee prayed that the additions made be set aside and the matter be restored to the Assessing Officer for fresh adjudication after granting adequate opportunity of hearing.

 

Respondent’s Arguments

The Revenue did not object to the request of the assessee for restoration of the matter. The learned Departmental Representative fairly agreed that the issues in dispute could be restored to the file of the Assessing Officer for passing a de novo assessment order in accordance with law after providing reasonable opportunity to the assessee.

 

Court Order / Findings

The Income Tax Appellate Tribunal observed that both the assessment order as well as the appellate order of the CIT(A) were passed ex-parte qua the assessee. The Tribunal noted that reasonable opportunity of being heard had not been provided at either stage. Considering the medical condition of the assessee and the absence of effective opportunity, the Tribunal held that the principles of natural justice stood violated.

Accordingly, the Tribunal set aside the order of the CIT(A) 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

The Tribunal clarified that dismissal of an appeal for non-prosecution, particularly where the assessee demonstrates genuine hardship such as old age or medical illness, cannot override the fundamental requirement of granting reasonable opportunity. Faceless or otherwise, assessment and appellate proceedings must adhere to principles of natural justice. The appeal was allowed for statistical purposes.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770878827_NARAYANPRASADTRIPATHIBANDAVS.ASSESSMENTUNITNEWDELHI2.pdf 

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