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Facts
The assessee company was selected for limited scrutiny for AY 2016-17. The assessee filed its return showing revenue from operations and taxable income. The Ld. CIT(A) dismissed the appeal ex parte without providing proper opportunity of being heard.
Held
The Tribunal held that dismissing the appeal in limine without adjudication on merits violates the principles of natural justice. Therefore, the impugned order of the Ld. CIT(A) was set aside.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without providing proper opportunity of being heard and adjudicating the grounds of appeal on merit.
Sections Cited
68, 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI
Before: SHRI S RIFAUR RAHMAN & SHRI SUDHIR PAREEK
Assessee by : Sh. Pranav Yadav, Adv. Revenue by : Ms. Monika Singh, CIT(DR) Date of Hearing : 10.07.2025 Date of Pronouncement : 10.07.2025 ORDER PER SUDHIR PAREEK, JM:
The aforecaptioned appeal has been preferred by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals)-8, New Delhi, dated 26.09.2019 for A.Y. 2016-17.
ITA No.-8728/Del/2019 Sincerely Finance & Investment Pvt. Ltd. 2. The appellant/assessee has raised following grounds of appeal for adjudication: -
1. On the facts and circumstances of the case and in law, the CIT (A) erred in passing ex-parte order.
2. On the facts and circumstances of the case and in law, the CIT (A) erred in passing order without providing proper opportunity of being heard.
3. On the facts and circumstances of the case and in law, the order passed by CIT (A) is against the principles of natural justice.
4. On the facts and circumstances of the case and in law, the CIT (A) erred in not adjudicating the grounds of appeal on merit.
5. On the facts and circumstances of the case and in law, the CIT (A) erred in confirming the addition of Rs. 79,92,160/- made by the assessing officer on the account of alleged share capital/share premium u/s 68 of the Act.
6. On the facts and circumstances of the case and in law, the CIT (A) erred in confirming the addition of Rs. 33,80,68,397/- made by the assessing officer on the account of alleged unsecured loans u/s 68 of the Act. The appellant craves leave to add one or more ground of appeal or to alter / modify the existing ground before or at the time of hearing of appeal. The aforesaid grounds of appeal are without prejudice to each other.”
Facts of the case may be concisely described as that the assessee company for A.Y. 2016-17 was selected in limited scrutiny through CASS and notice u/s 143(2) of the I.T. Act, dated 30.08.2017 was generated and issued to the assessee company. The assessee company has shown revenue from operation of Rs. 8,50,000/- from sale of services. After claiming expenses taxable income has declared at Rs. 6,17,567/- on which tax has been paid as per normal ITA No.-8728/Del/2019 Sincerely Finance & Investment Pvt. Ltd. provisions of Income Tax Act, 1961. As per submission filed, assessee company is non-banking financial institute.
In the appellate proceedings, the Ld. CIT(A) dismissed the appeal ex parte by stated that “before me also, during appellate proceedings, neither any authorized person has attended nor any further details have been filed by appellant company, despite allowing opportunity of being heard in that regard, so as to justify its claim that no additions needed to be made in appellant's present case. Therefore, considering the facts and circumstances of the case, I have no reason to interfere with the findings of the AO and provide any further relief to appellant in respect of disallowance made by AO. Accordingly, assessed income of Rs.34,66,78,120/- made by AO, is hereby upheld. Grounds of appeal
taken by appellant are dismissed” Consequently, the additions made by the Assessing Officer were confirmed without any adjudication on merits. 4.1 The Ld. CIT(A) passed the order ex parte, confirming the additions made by the AO.
5. The Ld. Counsel reiterating the grounds of appeal submitted that the Ld. CIT(A) passed the order without providing proper opportunity of being heard and the passed order is principles of 3. ITA No.-8728/Del/2019 Sincerely Finance & Investment Pvt. Ltd. nature justice and the Ld. CIT(A) failed to adjudicate the grounds on merits. He also submitted that erred in confirming the addition of Rs. 79,92,160/- made by the assessing officer on the account of alleged share capital/share premium u/s 68 of the Act. Further he has submitted that the CIT (A) erred in confirming the addition of Rs. 33,80,68,397/- made by the assessing officer on the account of alleged unsecured loans u/s 68 of the Act.
We have heard the rival submissions and perused the material available on record. From the perusal of the impugned order, it is evident that the ld. CIT(A) has passed the order ex-parte and has not examined the merits of the grounds raised
by the assessee. 6.1 In our considered view, dismissing the appeal in limine without such adjudication is violates the principles of natural justice.
7. In view of the above, and in the interest of justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) and restore the matter back to his file for fresh adjudication after granting reasonable opportunity of being heard to the assessee. The assessee is also directed to extend full cooperation and ensure compliance with the notices issued by the CIT(A) in the proceedings.
ITA No.-8728/Del/2019 Sincerely Finance & Investment Pvt. Ltd. 8. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 10.07.2025