Facts of the Case

The assessee filed three appeals for Assessment Year 2015-16 against separate appellate orders passed by the Commissioner of Income Tax (Appeals). The original assessment was completed by the Assessing Officer under section 147 read with sections 144 and 144B of the Income-tax Act, 1961, assessing total income at ₹87,46,000. The assessment order was passed ex-parte due to alleged non-compliance by the assessee.

Aggrieved, the assessee preferred appeals before the CIT(A). The appellate authority dismissed the appeals through ex-parte orders without adjudicating the grounds raised on merits. The assessee thereafter approached the Income Tax Appellate Tribunal.

 Issues Involved

  1. Whether ex-parte reassessment orders passed without granting reasonable opportunity are sustainable in law.
  2. Whether dismissal of appeals through non-speaking orders violates section 250(6) of the Income-tax Act.
  3. Whether penalty proceedings under sections 271(1)(b) and 271(1)(c) could survive independently.

 Petitioner’s Arguments

The assessee contended that both the Assessing Officer and the CIT(A) passed their respective orders without providing reasonable opportunity of being heard. It was further argued that the CIT(A) failed to pass a speaking order dealing with the grounds of appeal, in violation of the mandatory requirement under section 250(6). The assessee requested restoration of the matter to the Assessing Officer for fresh adjudication.

 Respondent’s Arguments

The Revenue did not object to the submissions of the assessee. The learned Departmental Representative left the matter to the discretion of the Tribunal.

 Court Order / Findings

The Income Tax Appellate Tribunal observed that section 250(6) casts a statutory obligation on the CIT(A) to pass a speaking order stating the points for determination, the decision thereon, and the reasons for such decision. The Tribunal noted that the appellate orders were passed ex-parte and without adjudicating the grounds on merits.

The Tribunal further observed that the assessment itself was completed ex-parte without providing reasonable opportunity to the assessee. In view of violation of principles of natural justice at both assessment and appellate stages, the Tribunal set aside the impugned appellate orders.

Accordingly, the issues relating to additions made in the assessment were restored to the file of the Assessing Officer with a direction to pass a de novo assessment order in accordance with law after granting reasonable opportunity of being heard to the assessee. 

Important Clarification

The Tribunal clarified that penalty proceedings initiated under sections 271(1)(b) and 271(1)(c) would be consequential in nature and would depend upon the outcome of the fresh assessment proceedings. The appeals were allowed for statistical purposes, emphasizing that adherence to section 250(6) and principles of natural justice is mandatory and not a mere procedural formality.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770880738_SHIVSHANKARMIRZAPURVS.ITOWARD32MIRZAPUR.pdf 

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