Facts of the Case

The assessee, Nobel Overseas Ltd., was subjected to assessment proceedings for A.Y. 2017–18. Due to non-compliance with notices issued by the Assessing Officer (AO), the assessment was completed ex-parte under Section 143(3) of the Income Tax Act, 1961.

An addition of ₹6,55,60,489 was made under Section 40(a)(ia) on account of alleged non-deduction of TDS.

Further, during appellate proceedings before the National Faceless Appeal Centre (NFAC), the assessee again failed to appear or file submissions, resulting in dismissal of appeal ex-parte.

Issues Involved

  1. Whether ex-parte assessment and appellate orders are sustainable when the assessee fails to respond.
  2. Whether the assessee should be granted another opportunity of being heard in the interest of justice.

Petitioner’s Arguments (Assessee)

  • The assessee submitted that it could not appear before the lower authorities due to unavoidable circumstances.
  • It requested that one more opportunity be granted to present its case and supporting evidence.

Respondent’s Arguments (Department)

  • The Department did not strongly object to granting another opportunity.
  • It relied on the orders passed by the lower authorities due to repeated non-compliance by the assessee.

Court Order / Findings (ITAT Delhi)

  • The Tribunal observed that both the assessment and first appeal were completed ex-parte due to non-compliance.
  • Considering the principles of natural justice, the Tribunal held that the assessee deserves another opportunity.
  • The matter was remanded back to the Assessing Officer for fresh adjudication.
  • The AO was directed to provide adequate opportunity to the assessee and consider all evidence.
  • The Tribunal also clarified that if the assessee again fails to cooperate, the AO is free to decide the matter as per law.

Important Clarification

  • ITAT emphasized that justice should not be denied due to procedural lapses.
  • However, it also cautioned that non-cooperation by the assessee in future will permit the AO to proceed ex-parte again.

Link to download the order -  https://itat.gov.in/public/files/upload/1735636579-4pD4rs-1-TO.pdf

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