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Facts
The assessee's appeal was filed against the order of the Ld. CIT(A) which upheld an assessment order passed under section 143(3). The original assessment included additions under section 68 and section 14A. The assessee did not appear before the Ld. CIT(A) despite multiple opportunities.
Held
The Tribunal held that the assessee was not afforded a reasonable opportunity to present evidence before the revenue authorities, violating principles of natural justice. Therefore, the matter was remanded to the Ld. CIT(A) for fresh adjudication.
Key Issues
Whether the assessee was provided with a reasonable opportunity of being heard by the lower authorities, and if not, whether the matter should be remanded for fresh adjudication.
Sections Cited
250, 143(3), 68, 14A
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Income Tax Appellate Tribunal, MUMBAI BENCH “H(SMC
Before: SHRI ANIKESH BANERJEE & SHI PRABHASH SHANKAR
O R D E R PER ANIKESH BANERJEE:
Instant appeal of the assessee was filed against the order of the Learned Commissioner of Income-tax (Appeal)-52, Mumbai *for brevity, ‘Ld.CIT(A)’) passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act’), date of order 05/09/2024 for A.Y. 2017-18. The impugned order was emanated from the order of the Learned Assistant Commissioner of Income-tax, CC-4(3), Mumbai passed under section 143(3) of the Act, date of order 31/12/2010.
When the appeal was called for hearing, none was present on behalf of the assessee. The registry informed that no power of attorney and no adjournment petition were filed in relation to the submission of the said appeal. We find that the appeal could be decided even without the presence of the assessee. Therefore, the matter was proceeded exparte qua the assessee and is disposed of after hearing the Ld. DR on perusal of the material available on record.
We heard the submission of the Ld.DR and considered the documents available in the record. The assessment was completed with an addition under section 68 of the Act amount of Rs.30 lakhs and the addition under section 14A read with rule 8D(2)(ii) amount of amount of Rs.539,112/- being 1% average of opening and closing balance of the value of investment.The impugned assessment order was carried before the Ld. CIT(A). The Ld.CIT(A) allowed number of opportunities for hearing, but none was present on behalf of the assessee before the Ld. CIT(A). The relevant paragraph of the order of the Ld.CIT(A) is reproduced as below: - “1.1. In response to the notices issued, the assessee has not filed any written submission and the appellant has also not availed the opportunity of being personally heard. Despite giving final opportunity vide notice dated 16.08.2024, no compliance has been made by the appellant. The notices were served by e-mail at mail addresses as per return of income (apart from what is stated in Form 35), yet there is no compliance. 1.2. In the case of Ishwarlal Mali Rathod v. Gopal &Ors., SLP Civil Nos. 14117 14118 of 2021 dt. 20.09.2021, the Hon’ble Supreme Court had held that adjournments should not be granted mechanically. In the instant case, the appellant has not given any reason for not availing the opportunity of being heard and has also opted not to respond at all. Hence, the appeal is proceeded to be decided based on material available on record”
The Ld.DR argued and placed that the assessee is a habitual defaulter and had not appeared before the Ld. CIT(A). In our considered view, we find that the Ld.CIT(A) has made a speaking order in relation to grounds of the assessee. The assessee raised Ground No. 1, pertains to the denial of a reasonable opportunity, resulting in a failure to adhere to the principles of natural justice. Upon examination, we find that the assessee was not afforded a reasonable opportunity to present evidence before the revenue authorities. Accordingly, we remand the matter to the file of the Ld. CIT(A) for fresh adjudication de novo. The Ld. DR has agreed to remand the matter to the file of the ld. CIT(A). We refrain from expressing any views on the merits of the case to avoid prejudicing the reassessment proceedings. It is imperative that the ld. CIT(A) provides the assessee with a fair and adequate opportunity of being heard during the set aside appeal proceeding. Any evidence or explanation submitted by the assessee in her defence must be admitted and considered by the Ld. CIT(A). Similarly, the assessee is expected to act diligently and cooperate fully during the reassessment proceedings.