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Facts
The assessee bank's appeal was dismissed ex parte by the CIT(A) for failure to present its case. The assessee argued that notices were never received or served, preventing them from presenting their case. The CIT(A) noted multiple hearing dates were fixed, but no submissions were filed by the assessee.
Held
The Tribunal held that an effective hearing is essential for natural justice, not a mere formality. It found that the impugned order was passed without proof of proper service of notices or effective opportunity for the assessee to be heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex parte without ensuring proper service of notice and providing an effective opportunity of hearing to the assessee.
Sections Cited
250, 143(3)
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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI B R BASKARAN & 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 referred to as “the Act”] dated 30.04.2024 for the A.Y. 2017-18, 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: - Page | 2 a. The appellant, either in person or by an authorised representative;” 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: -
3. In response to the notice's u/s 250 of the Income Tax Act sent by NFAC on 20.02.2020, 04.03.2020, 23.02.2021, 17.04.2023, 27.12.2023, 10.01.2024, 15.03.2024, 18.04.2024 and 29.04.2024 the appellant didn't file any detailed written submission till date.
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5. Observation and Decision : In ground No. 1, the Appellant has contested the order u/s 143(3) of the IT Act, 1961 dated 21/12/2019 for the A.Y. 2017-18 of the AO of not allowing deduction of Rs 4,88,58,893/- on account of Bad Debts written off. This case has been fixed for hearing on 20/02/2020, 04/03/2020, 23/02/2021, 17/04/2023, 27/12/2023, 10/01/2024, 15/03/2024, 18/04/2024 and 29/04/2024. However, the Appellant has not made any submissions till date. I have no other option but to pass the order ex-parte.
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 23.01.2025.