The Income Tax Appellate Tribunal, Delhi Bench ‘F’, in the case of Queen Distillers and Bottles Pvt. Ltd. v. ITO for Assessment Year 2022-23, examined the validity of an ex-parte appellate order passed by the Commissioner of Income Tax (Appeals).

The assessment was completed by computing the total income at ₹13.90 crore as against the returned income of ₹1.68 crore by making multiple additions. Aggrieved, the assessee preferred an appeal before the CIT(A). However, the appeal was dismissed ex-parte.

Before the Tribunal, the assessee contended that notices were issued to an incorrect e-mail address, resulting in non-compliance, and that no effective opportunity of being heard was granted. It was argued that the appellate order was passed in violation of the principles of natural justice.

The Tribunal observed that the CIT(A) had passed the impugned order without hearing the assessee and had also failed to adjudicate all grounds raised on merits. Emphasizing the settled legal principle that no adverse order can be sustained without granting reasonable opportunity of being heard (audi alteram partem), the Tribunal held that such procedural lapses vitiate appellate proceedings.

In the interest of justice, the ITAT remanded the matter back to the file of the CIT(A) with a direction to decide the appeal afresh on merits in accordance with law after providing due opportunity to the assessee. Consequently, the appeal was partly allowed for statistical purposes, and the stay application was dismissed as infructuous.

This decision reiterates the consistent judicial position that ex-parte orders passed without proper service of notice and without granting effective opportunity are unsustainable in law, and appellate authorities are duty-bound to adjudicate appeals on merits.

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