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Facts
The assessee, a startup engaged in medical activities, failed to file a return for AY 2014-15 despite earning professional income. Consequently, an ex-parte assessment was made under Section 147. The assessee also repeatedly sought adjournments before the CIT(A) instead of filing relevant details, leading to the dismissal of their appeal.
Held
The Tribunal noted the assessee's non-compliance and lack of substantive hearing at both the assessment and appeal stages. However, to uphold the principles of natural justice, the Tribunal restored the appeal to the CIT(A) for de novo consideration, granting the assessee a last opportunity to present their case.
Key Issues
Whether the appeal should be dismissed due to the assessee's non-compliance and lack of substantive hearing, or if a de novo consideration by the CIT(A) is warranted to ensure principles of natural justice are met.
Sections Cited
250, 147, 144, 46A
AI-generated summary — verify with the full judgment below
Before: SHRI ANIKESH BANERJEE & SHRI PRABHASH SHANKAR
PER PRABHASH SHANKAR [A.M.] :- The above captioned appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] u/s 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Years [A.Y.] 2014-15 in respect of assessment order passed u/s 147/144 of the Act.
Facts of the case are that the assessee is a Start up company engaged in medical related activities. The AO found that as per 26AS
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assessee had earned Professional income of Rs 5,38,496/- for the relevant year. However, no return was filed .Action u/s 147 was therefore taken. But there being no compliance by the assesee to various notices issued from time to time, entire receipt was treated its income while making ex- parte assessment. Even before the ld.CIT(A), the assessee repeatedly sought adjournments rather than filing relevant details in support of the appeal. Consequently ,the appeal was also dismissed.
Before us, it was submitted by the learned Authorized Representative that the assesee sought adjournments to prepare details and for obtaining bills, vouchers etc for proper representation of its case before the ld.CIT(A) which however, could not be completed in time and produced before him who went ahead and passed the appeal order dismissing its appeal. It is further contented that the assessee had also made a request for entertaining addition evidence under Rule 46A before the appellate authority which were also not appreciated and considered by him. The Ld. DR on the other hand, relied on the order of authorities below.
We have considered the rival submissions. Section 250, sub section 2(a) of "the Act" provides that the appellant either in person or by an authorised representative shall have the right to be heard at the P a g e | 3 E-Arogya Healthcare Services Pvt. Ltd.
hearing of the appeal.’It is evident from the provision that the hearing to be given is not a formality but effective hearing is sine qua non for the purpose of upholding the principal of natural justice. However, it is equally true and duly reflected from the records that the assessee is also non-compliant and non -cooperative in its attitude before the authorities both during assessment and appeal proceedings. Consequently, there is lack of substantive hearing of the case.
The ld. AO has claimed that despite several notices issued for allowing opportunity of hearing to the assessee during assessment proceedings, there was no compliance. The ld. CIT(A) has also held that there was no substantive compliance from the assessee to explain his case even before him. Considering all the relevant facts of the case, we are of the view that following the principles of natural justice,it would be fair and judicious to allow a last opportunity of hearing to the assessee to explain the matter before lower authorities in the interests of justice. During the hearing, the Bench proposed for restoration of the matter to the ld.CIT(A) for a de novo consideration. The Revenue did not vehemently oppose this plea. Thus, in the in the interest of justice, we deem it appropriate to send back the appeal for fresh consideration. The ld. CIT(A) shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in the set
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aside remand proceedings for de novo adjudication of the appeal of the assessee filed before him. Needless to state, the assessee will comply with notices and make available any details as deemed fit and sought by the appellate authority .
1 Before parting with the subject,we would like to make it clear that setting aside the appeal for de novo consideration by us ,should not be construed in any manner affecting the merits of the case for which the ld.CIT(A) is duly empowered to take an independent decision in accordance with the provisions of law.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 23/01/2025. ANIKESH BANERJEE PRABHASH SHANKAR (न्याययकसदस्य /JUDICIAL MEMBER) (लेखाकारसदस्य/ACCOUNTANT MEMBER)
Place: म ुंबई/Mumbai दिनाुंक /Date. 23.01.2025 Dhananjay Sr.PS
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आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file.
सत्यावपि प्रवि //// आदेशानुसार/ BY ORDER,
उि/सहायक िंजीकार (Dy./Asstt.