BANGALORE KRISHNAIAH JAGANNATH,BENGALURU vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-3(1)(1), BENGALURU

At the time of hearing of the instant appeal, the Ld.Counsel appearing for the assessee submitted before us that the order passed by the Ld.CIT(A) is practically an ex-parte order. Before the Ld.AO too he sought for adjournment of the hearing fixed on 28.09.2021 by way of a written application dated 27.09.2021 as the assessee was not well and the Ld.AR was not been able to communicate in regard to the matter to be taken up by the ITO. In spite of receipt of the said adjournment application, the Ld.AO proceeded with the matter and finalised the same upon making the impugned addition. On this aspect, he has drawn our attention to page 127 of the paper book filed before us where the notice dated 24.09.2021 issued by the ITO u/s. 142(1) of the Act has been annexed. He has further drawn our attention to pages 129 & 130 wherein the application seeking adjournment dated 27.09.2021 has been annexed and the communications thereof were made through the electronic media to the office of the ITO is evident. According to him, no opportunity of being heard to the assessee was given by the Ld.AO while proceeding with the matter. Further that the Ld.CIT(A) has also proceeded with the matter ex-parte. Before the Ld.CIT(A) also, he made an application for adjournment of hearing fixed on 18.02.2023 in response to the notice issued by the Ld.CIT(A) dated 24.01.2023 due to medical conditions and hospitalisation of the assessee. In this regard, he has drawn our attention to pages 131 & 132 of the paper book filed before us in order to substantiate such submissions.

Page 3 of Since the Ld.CIT(A) has also not taken into consideration the application for adjournment made on behalf of the assessee on the medical ground and particularly the hospitalisation of the assessee and proceeded with the matter in upholding the addition made by the Ld.AO without granting an opportunity of being heard to the assessee, the principle of natural justice has been violated and thus the ultimate prayer made by the Ld.AR is to quash the order passed by the Ld.CIT(A) and to remit the issue to the file of the Ld.AR for reconsideration of the same afresh.

On the other hand, the Ld.DR relied upon the orders passed by the authorities below in finalizing the assessment by the Ld.AO upon making addition and confirmation of the same by the Ld.CIT(A) though both were ex-parte orders.

We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record particularly the orders passed by the authorities below.

Upon perusal of the order passed by the Ld.AO, we find that the notice u/s. 142(1) was issued on 24.09.2021 directing the assessee to furnish the accounts and documents specified to the annexure before 28.09.2021 appearing at page 127 of the paper book filed before us. We further find that the assessee sought for adjournment of the matter on the ground of bad health of the assessee on 27.09.2021.

Thus, having heard the Ld.Counsel appearing for the parties, having regard to the facts and circumstances of the case, we find that both the authorities below proceeded on wrong notion, without taking into consideration the adjournment applications made on behalf of the assessee by the Ld.AR on the health issue, instead proceeded with the same and finalised the assessment proceedings which was further confirmed by the First Appellate Authority. The entire Page 5 of proceeding initiated and finalised by the authorities below speaks of violation of the principle of natural justice. Assessee has the right to ventilate its grievance before the authorities below and to substantiate the case made out on merit before the order of assessment is made. Such right being violated, we in order to prevent the miscarriage of justice, remit the issue to the file of the Ld.AO upon setting aside the order of the Ld.CIT(A) with a further direction upon the Ld.AO to decide the issue afresh upon giving proper opportunity of being heard to the assessee and upon considering the evidence on record or any other evidences which the assessee may choose to file at the time of hearing of the matter and to pass a reasoned order. We, however, make it clear, that in the event the assessee does not cooperate with the authorities below, the Ld.AO would be at liberty to proceed with the matter and to finalise the same strictly in accordance with law. In the result, the appeal filed by assessee stands allowed for statistical purposes. Order pronounced in the open court on 04th September, 2023.