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Facts
For Assessment Year 2012-13, the Assessee's appeal was first dismissed ex-parte by the CIT(A) and then remanded by the ITAT for adjudication on merits. In the second round, the National Faceless Appeal Centre (NFAC)/CIT(A) again passed an ex-parte order on 04/02/2025, treating the appeal as withdrawn, citing 'Nil' disputed demand and lack of taxpayer interest, despite a pending demand of Rs. 18,40,600.
Held
The ITAT held that the CIT(A)'s ex-parte order was factually incorrect, legally unsustainable, and failed to comply with the previous ITAT remand directions to decide on merits. The Tribunal set aside the CIT(A)'s order and restored the matter for fresh adjudication after allowing the assessee a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order dismissing the appeal without considering the merits and denying natural justice, especially after the case was previously remanded by the ITAT for adjudication on merits.
Sections Cited
143(3), 246A, 250, 254
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “J (SMC
order
: 25.06.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Assessee is directed against the order, dated 04/02/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had disposed off the appeal against the Assessment Order, dated 20/03/2015, passed under Section 143(3) of the Act for the Assessment Year 2012-2013.
2. The Assessee has raised, inter alia, the following grounds of appeal : “I. Natural Justice Ex-Parte Order
1. On the facts and circumstance of the case, the learned National Faceless Appeal Centre issued two notices dated 24/01/2025, for which the response was to be submitted on 03/02/2025, Assessment Year 2012-2013 and 27/01/2025, for which the response was to be submitted on 04/02/2025. However, the learned National Faceless Appeal Centre erred in passing an ex parte order dated 04/02/2025 without appreciating the fact that on the first date of hearing, i.e. 03/02/2025, the Appellant had requested for time to file the details required, as this is the second round of appeal before the CIT (A) and details were under compilation. However, without considering the request of the appellant and without granting any further reasonable opportunity to the Appellant to present its case, the very next day, ie. on 04/02/2025 passed the ex-parte order. Therefore, the order passed u/s.250 r.w.s.254 may be set aside to the CIT (A). II. Wrong observation of facts: 2. The learned National Faceless Appeal Centre erred in understanding the facts that "taxpayer is not interested in agitating the appeal, since the disputed tax demand is "0" taxpayer may not be interested in outcome of appeal" without appreciating that there is a tax demand outstanding of Rs.18,40,600/- for AY 2012-2013. Hence, the observation made and order passed by the NFAC may be set aside to the CIT (A). III. No window open for appeal Proceedings: 3. On the facts and circumstance of the case, the direction given by the NFAC for initiation of the appeal proceedings once again through e proceedings, if necessitated, the appellant submits that the window for appeal proceedings was closed, and there is no chance to file further proceedings details on the portal. Hence, the order passed by the NFAC may be set aside, and one more opportunity may be given to present the case.” 3. Heard both the sides and have perused the material on record.
This is the second round of litigation. In the first round vide order, dated 31/07/2017, passed in the Tribunal had disposed off the appeal preferred by the Assessee against the order, dated 28/02/2017, passed by the Learned CIT(A) in the first round with the following directions: “5. I have carefully considered the rival submissions and perused the affidavit dated 24/07/2017 (supra). Ostensibly, the CIT(A) has proceeded to dismiss the appeal of the assessee for the reason that the assessee has not appeared before him on the date of hearing. Be that as it may, in my view, the manner in which the CIT(A) has disposed of the appeal is contrary to the legal position contained in section 250((6) of the Act. A perusal 2 Assessment Year 2012-2013 of the impugned order reveals that the appeal has been dismissed merely noticing the absence of the assessee, without dealing the Grounds of appeal
raised by the assessee on merits. Section 250(6) of the Act obligates the CIT(A) to dispose of the appeal by stating the points for determination, the decision thereon and the reasons for such decision. The said approach is conspicuous by its absence in the impugned order of CIT(A). On this ground itself, I find that the order of the CIT(A) is unsustainable. Be that as it may, I deem fit and proper to set aside the order of the CIT(A) and restore the matter back to his file for adjudication afresh, after allowing a reasonable opportunity of being heard to the assessee as per law.
6. In the result, appeal of the assessee is allowed for statistical purposes as above.”
5. Thus, the Tribunal gave specific directions to the Ld. CIT(A) to decide the appeal on merits after considering the grounds raised by the Assessee. Pursuant to the above directions of the Tribunal, the CIT(A) has passed the impugned order which reads as under:
“The appeal is filed under section 246A of the Income Tax Act. An order u/s. 143(3) was passed on 20/03/2015 against which appeal was filed before appellate authority. The CIT(Appeals) passed the order on 31/7/2017. The ITAT set aside the order and restored it to the CIT(Appeals). The assessment year involve dis 2012-13. The set aside appeal no is NFAC/2011-12/10306521. The appellate order no is 3593/Mum/2017. The disputed demand is 0. The taxpayer after initiating the appeal proceedings, has not done anything for furtherance of appeal. There is no Form 35, Statement of Facts, Grounds of Appeal
, copy of order appealed against etc. IT is understood that taxpayer is not interest in agitating the appeal. Since the disputed demand is 0 taxpayer may not be interested in the outcome of appeal. During appeal proceedings the case was posted for hearing 3/2/2025, 4/2/2025. Considering these facts, the appeal is treated as withdrawn. Taxpayer is free to initiate appeal proceedings once again through e-proceedings, if necessitated. The appeal is treated as allowed for statistical purposes.” (Emphasis Supplied)
6. The Assessee has impugned the above order passed by the Ld. CIT(A) in appeal before the Tribunal. On perusal of the same, it 3 Assessment Year 2012-2013 becomes evident that despite taking note of the Order, dated 31/07/2017, passed by the Tribunal in the CIT(A) has passed order without dealing with the grounds raised by the Assessee on merits. The Ld. CIT(A) has stated that the Form 35 is not available and that disputed demand is ‘Nil’. While the CIT(A) has treated the appeal as withdrawn, the CIT(A) has also stated that the Assessee may initiate appellate proceedings once again. The approach adopted by the Ld. CIT(A) cannot be countenanced as the same in contrary to the provisions of the Act and shows lack of application of mind on the part of first appellate authority. Further, on perusal of records we find that the Ld. CIT(A) had issued notice of hearing dated, 24/01/2025 fixing on 03/02/2025 as a date of hearing. Thereafter, another notice dated, 27/01/2025, was issued fixing date of hearing of appeal as 04/02/2025. On 03/02/2025, Assessee filed an application seeking adjournment. However, the Ld CIT(A) proceeded to pass the impugned order on 04/02/2025 disposing off the appeal without examining the grounds raised on merits. The Learned Authorized Representative for the Assessee appearing before us had submitted that adjournment was sought by the Assessee since records relating to the appeal were to be received from the earlier tax consultant handling the appeal. She submitted that all the relevant documents/details are available with the Assessee. It was further submitted that the disputed demand was not ‘nil’ and that the Assessee wanted to pursue the appeal. On perusal of record, we find that the finding returned by the CIT(A) are factually incorrect and legally unsustainable. Keeping in view the overall facts and circumstances of the case, we set aside the impugned Order, dated 04/02/2025, passed by the Learned CIT(A) and restore the issues back to the file of the CIT(A) for adjudication afresh after taking into consideration the submissions of the Assessee and the documents/details to be furnished by the Assessee in support of the claims/contentions. The Assessee is also directed to 4 Assessment Year 2012-2013 co-operate in the appellate proceedings and forthwith file details, documents & submission in support of its claims/contentions before the CIT(A). It is clarified that the Ld. CIT(A) shall grant reasonable opportunity of being heard to the Assessee. The Assessee is directed to be vigilant and track the appellate proceedings through Income Tax Business Application Portal. In case the Assessee fails to enter appearance and/or fails to file details/documents/submission in response to notice of hearing, the CIT(A) shall be at liberty to decide the issues on merits on the basis of material on record as per the directions given by the Tribunal vide order, dated 31/07/2017, passed in ITA No.3593/Mum/2017. In terms of the aforesaid, Ground No. 1 to 3 raised by the Assessee are allowed while all other grounds are dismissed as having been rendered infructuous.
7. In result, the present appeal preferred by the Assessee is allowed for statistical purposes.