MRS. KALPANA KHANDELWAL,MUMBAI vs. INCOME TAX OFFICER, WARD 42(1)(3), MUMBAI

ITA 687/MUM/2025Status: DisposedITAT Mumbai17 April 2025AY 2018-196 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the ex parte order passed by the CIT(A) was not sustainable. It was observed that while the CIT(A) noted non-compliance with notices and sought adjournments, there was no definitive proof of proper service of notices on the assessee. The Tribunal emphasized that the right to be heard, as provided under section 250(2)(a) of the Act, is not a mere formality but a fundamental aspect of natural justice. The CIT(A)'s observation that the assessee did not pursue the case on merits and failed to submit corroborative evidence was noted. However, the Tribunal found that an effective opportunity of hearing was not provided. Therefore, the matter was restored to the file of the CIT(A) for granting an effective hearing to the assessee, who was directed to present its case within 60 days. The impugned order was set aside.

What were the facts?

The assessee, Mrs. Kalpana Khandelwal, filed an appeal before the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2018-19. The CIT(A) dismissed the appeal ex parte, stating that the assessee failed to present its case despite notices. The assessee contended that the notices were never received or served, preventing them from presenting their case and thus rendering the ex parte order illegal. The Department supported the CIT(A)'s order, arguing the appeal lacked merit. The ITAT noted the CIT(A)'s observation that notices were issued but remained uncomplied with, and adjournments were sought. The CIT(A) ultimately dismissed the appeal, confirming the Assessing Officer's order, citing the lack of written submissions and corroborative evidence from the assessee.

What were the issues?

1. Whether the ex parte order passed by the CIT(A) under section 250 of the Income Tax Act, 1961, is valid when the assessee claims non-receipt of notices and denial of an effective opportunity of hearing? Assessee's Contention: The assessee argued that the notices issued by the CIT(A) were never received or served. Consequently, they were unable to present their case, leading to an ex parte decision without an effective opportunity of hearing. This renders the impugned order illegal and liable to be set aside. Revenue's Contention: The Revenue supported the CIT(A)'s order, arguing that there is no merit in the appeal and it is liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN

O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the order of Learned Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter Mrs. Kalpana Khandelwal referred to as “the Act”] dated 04.11.2024 for the A.Y. 2018-19, wherein the Ld. CIT(A) has dismissed the appeal ex parte as despite services of notice, the assessee failed to present its case before the Ld. CIT(A).

It was argued on behalf of the appellant/assessee that the notice issued by the Ld. CIT(A) were never received or served upon the assessee and as such they could not present its case before the Ld. CIT(A) who proceeded ex parte and decided the appeal on merit without giving effective opportunity of hearing to the assessee and as such the assessee was prevented from presenting its case before the Ld. CIT(A). Therefore, the impugned order suffers from illegality and liable to be set aside. The Ld. DR on the other hand supporting the judgment of the Ld. CIT(A) stating that there is no merit in the appeal and same is liable to be dismissed.

We have considered the rival submissions. Section 250 sub section 2(a) of "the Act" provides as under:

“Section 250 (2) The following shall have the right to be heard at the hearing of the appeal: - a. The appellant, either in person or by an authorised representative;”

Mrs. Kalpana Khandelwal 4. It is evident from the provision that the hearing to be given is not a formality but an effective hearing is sine qua non for the purpose of upholding the principal of natural justice. We have examined the impugned order of the Ld. CIT(A) who observed as under: -

During the course of appellate proceedings, the Appellant did not make any compliance to the Notices issued u/s 250 of the Act to the Appellant for hearing. The detailed chart regarding this is given as under-

Issued date Fixing for Remarks Notice issued u/s 250 hearing

ITBA/NFAC/F/APL_1/2024- 10.07.2024 17.07.2024 Remained 25/1066566547 (1) uncomplied

ITBA/NFAC/F/APL_1/2024- 25.07.2024 01.08.2024 Remained 25/1067008643 (1) uncomplied

ITBA/NFAC/F/APL_1/2024- 07.08.2024 14.08.2024 Adjournment 25/1067389150 (1) Sought

ITBA/NFAC/F/APL_1/2024- 03.10.2024 10.10.2024 Adjournment 25/1069336902 (1) Sought upto 25th October 2024 Mrs. Kalpana Khandelwal 3.7 From the afore-mentioned discussion, it is clear that no written submissions have been made at appellate level. Therefore, it is stated that no useful purpose would be served by keeping the appeal pending and therefore the appeal is decided on the basis of documents available on record. There may be various reasons with the appellant to remain absent at the time of hearing. One of the reasons may also be a desire or absence of need to prosecute the appeal or inability to assist in the appellate proceeding in a proper manner or to take benefit of vagaries of law. However, the exact reasons for non- attendance/non-submission are only known to the appellant. The CIT (Appeal) can under such circumstances, invoke the inherent powers vested therein. These powers are embedded with certain inherent obligations also. One of such obligations is that the appellant must not be deprived of being heard. Therefore, the easiest way for appellant in this case was to furnish the written submission in support of grounds of appeal. But instead, the appellant in this case not only chose to ignore the date of hearing but even did not. furnish any submissions.

3.8 Considering the above discussion and facts, it is clear that the appellant assessee is not pursuing its case on merits. In pursuance of its appeal the appellant assessee did not file any documents in support of its claim that why addition of Rs. 10,12,14,258/- is not sustainable. The appeal cannot be decided merely on the basis of grounds of appeals and statement of facts as no corroborative evidence of any kind has been submitted by the appellant assessee. Based on these observations the appeal filed by the appellant assessee is dismissed and the order of the AO is confirmed.

In result the appeal is hereby dismissed.

Mrs. Kalpana Khandelwal 5. It is thus evident from the contents of the impugned order extracted above that no effective opportunity of hearing has been given and there is no proof that the notice sent on various dates were duly served or brought to the notice of the appellant/assessee.

For these reasons, we are of the considered opinion that matter needs to be restored to the file of the Ld. CIT (A) for giving effective hearing to the assessee who shall present its case before the Ld. CIT(A) within 60 days. The impugned order is accordingly set aside and appeal filed by the assessee is allowed in above terms.

In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 17.04.2025.

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