What did the Tribunal hold?

The tribunal, in the interest of substantial justice, granted a final opportunity to the assessee to present its case before the Assessing Officer. The impugned orders were set aside and the matters were restored for fresh adjudication.

The assessee failed to effectively participate in assessment and appellate proceedings due to inadvertent mistakes and bona fide circumstances, leading to ex parte orders. The assessee expressed regret and sought a final opportunity to present its case.

What were the issues?

Whether the assessee should be granted a final opportunity to present its case before the Assessing Officer despite previous non-compliance, to ensure substantial justice.

Sumati Foods, Baddi vs ITO | ITAT Chandigarh 2026

Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI MANOJ KUMAR AGGARWAL

For Appellant: Shri Jaspal Sharma, Advocate

For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR

Hearing: 16.07.2026Pronounced: 20.07.2026

आयकर अपील�य अ�धकरण,च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA Nos. 963,979, 980/CHD/2026 ITA Nos. 990, 1003 to 1006/CHD/2026 �नधा�रण वष� / A.Y: 2016-17 to 2023-24 Sumati Foods, The ITO, Village-Judikalan, Vs Parwanoo. Barotiwala Road, Baddi, Distt. Solan. �थायी लेखा सं./PAN NO: ACQFS1527E अपीलाथ�/Appellant ��यथ�/Respondent Assessee by : Shri Jaspal Sharma, Advocate Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR Date of Hearing : 16.07.2026 Date of Pronouncement : 20.07.2026 PHYSICAL HEARING O R D E R PER LALIET KUMAR, JM

These eight appeals have been preferred by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)(in short ‘the CIT(Appeals) dated 02.02.2026/03.02.2026 pertaining to assessment year 2016-17 to 2023-24. All these appeals were heard together and are being disposed of by this common order.

At the time of hearing, the learned Authorised Representative

ITA Nos.963, 979, 980, 990/CHD/2026 & ITA Nos. 1003 to 1006/CHD/2026 2 (AR) submitted that the assessee is aggrieved by the assessment order passed by the Assessing Officer as well as the appellate order passed by the learned CIT(A), whereby the appeals of the assessee came to be dismissed substantially on account of non-appearance. It was contended that the assessee could not effectively participate in the assessment as well as the appellate proceedings due to an inadvertent mistake and bona fide circumstances, which resulted in the assessee being proceeded against ex parte.

The learned AR fairly submitted that the assessee does not intend to derive any advantage from such non-compliance and expressed regret for the lapse. It was pleaded that, in the interest of substantial justice, one final opportunity may be granted to the assessee to substantiate its claim by producing all relevant books of account, documentary evidence and explanations before the Assessing Officer. The learned AR further assured the Bench that the assessee shall remain vigilant, fully cooperate with the Assessing Officer, attend all hearings without default and shall not seek unnecessary adjournments. It was, therefore, prayed that the matter may be restored to the file of the Assessing Officer for adjudication afresh in accordance with law after granting adequate opportunity of being heard.

Per contra, the learned Departmental Representative (DR) strongly opposed the prayer for restoration of the matters. It was

ITA Nos.963, 979, 980, 990/CHD/2026 & ITA Nos. 1003 to 1006/CHD/2026 3 submitted that the present cases emanate from search proceedings and the assessee had already been afforded sufficient opportunities by both the Assessing Officer as well as the learned CIT(A). Despite repeated statutory notices, the assessee failed to avail the opportunities granted and remained non-compliant. The learned DR argued that merely because the assessee now seeks another opportunity, the proceedings cannot be remanded as a matter of routine, particularly in cases arising out of search assessments. It was, therefore, prayed that the orders of the authorities below, having been passed after granting adequate opportunities, deserve to be upheld.

We have heard the rival submissions, carefully perused the orders of the authorities below and examined the material available on record.

It is an admitted position that the assessee did not effectively participate in the proceedings before the Assessing Officer as well as before the learned CIT(A), resulting in the assessment and the appellate proceedings being decided substantially ex parte. The appellate orders also record that despite issuance of several notices, the assessee failed to furnish the requisite submissions or documentary evidence in support of its case.

Be that as it may, it is equally well settled that the principles of natural justice require that a litigant should ordinarily be

ITA Nos.963, 979, 980, 990/CHD/2026 & ITA Nos. 1003 to 1006/CHD/2026 4 afforded a reasonable and effective opportunity to present its case unless it is established that the conduct of the party is contumacious or intended to abuse the process of law. The object of tax adjudication is to determine the correct tax liability on the basis of relevant material rather than to decide matters merely on technical defaults.

In the present cases, the learned AR has categorically undertaken before us that the assessee shall extend full cooperation, produce all documentary evidence and shall not seek unnecessary adjournments before the Assessing Officer. Considering the totality of the facts and circumstances, and in order to advance the cause of substantial justice, we are of the considered opinion that one final opportunity deserves to be granted to the assessee.

Accordingly, we deem it appropriate to set aside the impugned orders of the authorities below and restore the matters to the file of the Assessing Officer for adjudication afresh in accordance with law. The Assessing Officer shall afford reasonable opportunity of hearing to the assessee and shall decide the issues on merits after considering such evidence and material as may be produced by the assessee.

10.

The assessee is, however, directed to remain vigilant and fully cooperate in the remand proceedings. It shall appear before the

ITA Nos.963, 979, 980, 990/CHD/2026 & ITA Nos. 1003 to 1006/CHD/2026 5 Assessing Officer on the dates fixed, furnish all necessary books of account, documents and evidences in support of its claim, and shall not seek unwarranted adjournments. In the event of failure on the part of the assessee to cooperate or comply with the statutory notices, the Assessing Officer shall be at liberty to proceed in accordance with law on the basis of the material available on record.

11.

With these observations, the appeals of the assessee are allowed for statistical purposes.

Order pronounced on 20th July,2026.

Sd/- Sd/-

(MANOJ KUMAR AGGARWAL) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�/ CIT 3. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 4. गाड� फाईल/ Guard File 5.

सहायक पंजीकार/ Assistant Registrar

SUMATI FOODS,BADDI vs. INCOME TAX OFFICER, PARWANOO

What did the Tribunal hold?

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