SARITA ARORA,MUMBAI vs. ITO-WARD 42(3)(3), MUMBAI

Assessee has reported gross receipts of Rs.2,03,52,261/- comprising of exempt income of Rs.67,76,291/-. Crux of the dispute is exemption claimed by the assessee u/s.10AA for which Form-56F has

Assessee filed her first appeal on 23.02.2026 and on the very next day notice of hearing was issued requiring compliance by 02.03.2026 giving only four working days to the assessee. Claim of the assessee is that she did not receive the said notice through registered email ID which was subsequently received on 01.03.2026 on the email ID arorasarita1@gmail.com. Reply was filed by the assessee digitally, however, the appeal was disposed ex parte within 9 days of the filing of the appeal vide order dated 04.03.2026, denying the claim of exemption u/s. 10AA. Assessee submits that due to procedural lapse she could not present facts/evidence and other legal submissions to substantiate her claims resulting into grave prejudice to her as the impugned order is not passed by taking into account merits of the case.

The primary grievance raised before us is that the appeal has been disposed of without effective representation on behalf of the assessee. It has been submitted that due to bona fide and genuine reasons, the assessee could not properly respond to the notices issued during the course of the appellate proceedings and, consequently, was deprived of an adequate opportunity of presenting its case before the learned CIT(A). It has, therefore, been pleaded that in the interest of substantial justice, the matter may be restored to the file of the learned CIT(A) for fresh adjudication on merits after affording due and effective opportunity of hearing.

The learned Departmental Representative fairly submitted that he would have no serious objection if the matter is restored to the file of the learned CIT(A) for fresh consideration.

Having considered the rival submissions and the material placed on record, we are of the opinion that the ends of justice would be met if the impugned ex parte order is set aside and the matter is restored to the file of the learned CIT(A) for adjudication afresh in accordance with law. Accordingly, the impugned order of the learned CIT(A) is set aside and the matter is restored to his file with a direction to decide the appeal afresh on merits and in accordance with law after affording due and effective opportunity of hearing to the assessee. The assessee is also directed to extend full cooperation in the appellate proceedings. Since the appeal pertains to an old assessment year and has already remained pending for a considerable period, and further the matter is being restored on account of the bona fide reasons explained by the assessee without adjudication on merits, we deem it appropriate to observe that the learned CIT(A) shall endeavour to dispose of the appeal as expeditiously as possible in accordance with law. We make it clear that we have not expressed any opinion on the merits of the issues involved and all contentions are left open.

In the result, the appeal is allowed for statistical purposes.