Facts of the Case

The assessee, Smt. Sudama Devi, legal heir of Late Lal Chand Yadav of Sonebhadra, filed an appeal before the Commissioner of Income Tax (Appeals), Allahabad against assessment proceedings wherein additions had been made treating certain amounts as unexplained income.

The appellate authority disposed of the appeal, allegedly without adequately considering the assessee’s submissions or in circumstances where effective opportunity of hearing was in dispute. Aggrieved by the order of the CIT(A), the assessee approached the Income Tax Appellate Tribunal.

Issues Involved

Whether the appellate order passed by the CIT(A) was sustainable in law, particularly:

  • Whether proper opportunity of hearing was granted
  • Whether dismissal or adjudication of the appeal complied with principles of natural justice
  • Validity of additions relating to unexplained income

Petitioner’s (Assessee’s) Arguments

The assessee contended that the appellate authority had erred in disposing of the appeal without proper consideration of facts and submissions. It was argued that adequate opportunity of being heard was not provided, resulting in prejudice to the assessee. The assessee sought restoration of the matter for fresh adjudication.

Respondent’s (Revenue’s) Arguments

The Revenue supported the order of the CIT(A), contending that due process had been followed and that the assessee had failed to effectively pursue the appeal or substantiate the grounds raised. According to the department, the appellate order was valid and did not warrant interference.

Court Order / Findings (ITAT)

The Tribunal examined the record of proceedings and the manner in which the appeal had been disposed of by the CIT(A). It reiterated that appellate authorities are required to adjudicate appeals judiciously, after granting reasonable opportunity of hearing and considering material placed on record.

Where an order is passed without adequate opportunity or without proper examination of issues, it may violate principles of natural justice. The Tribunal evaluated whether the impugned order met these legal standards and passed appropriate directions, including possible restoration for fresh consideration where warranted.

Important Clarification

The ruling underscores that appellate proceedings are quasi-judicial in nature and must adhere strictly to procedural fairness. Even where the assessee defaults in appearance, the appellate authority is expected to pass a reasoned order on merits. Denial of effective opportunity can render the order unsustainable.

Link to download the order –https://itat.gov.in/public/files/upload/1582193441-SUDAMA-157(CITA).pdf

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