Facts of the Case

The assessee DSI Bridgecon India Pvt. Ltd. filed its return of income under the Income-tax Act, 1961 for the relevant assessment year. The Assessing Officer (AO) completed the assessment and made certain additions to the income of the assessee.

Aggrieved by the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)].

During the appellate proceedings, the assessee sought adjournment and requested an opportunity to present its case properly. However, the CIT(A) proceeded to dispose of the appeal without granting adequate opportunity to the assessee and passed an order confirming the additions made by the Assessing Officer.

Aggrieved by this action, the assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order of the CIT(A). 

Issues Involved

  1. Whether the CIT(A) was justified in passing the appellate order without granting proper opportunity of hearing to the assessee.
  2. Whether the order of the CIT(A) violated the principles of natural justice.
  3. Whether the matter required restoration to the CIT(A) for fresh adjudication after providing reasonable opportunity to the assessee. 

Petitioner’s Arguments

The assessee contended that:

  • The CIT(A) disposed of the appeal without granting sufficient opportunity of hearing despite the assessee seeking adjournment.
  • The action of the CIT(A) was in violation of the principles of natural justice, which require that a party should be given fair opportunity to present its case.
  • The order passed without adequate hearing was therefore invalid and liable to be set aside. 

Respondent’s Arguments

The Revenue authorities argued that:

  • The CIT(A) passed the order after examining the assessment records and available material.
  • The appellate authority is empowered to decide the appeal on the basis of material available on record if the assessee fails to effectively represent the case.
  • Therefore, the order of the CIT(A) should be upheld.

Court Order / Findings

The Tribunal observed that:

  • The principles of natural justice require that adequate opportunity of hearing must be given to the assessee before deciding an appeal.
  • Passing an order without granting reasonable opportunity to the assessee defeats the purpose of appellate proceedings.

The Tribunal held that the CIT(A) should have granted a proper opportunity to the assessee to present its submissions and supporting evidence.

Accordingly, the Tribunal set aside the order of the CIT(A) and restored the matter back to the CIT(A) for fresh adjudication after providing reasonable opportunity of hearing to the assessee.

Important Clarification

The Tribunal clarified that:

  • Appellate authorities must ensure fair opportunity of hearing to taxpayers before passing an order.
  • Any order passed without adequate opportunity may be considered contrary to the principles of natural justice and may be set aside.

Link to download the order – https://itat.gov.in/public/files/upload/1703745549-798-2022-DSI%20Bridgecon%20India.pdf

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