M/S GRAND MUTLIPLEX PROJECTS LIMITED ,NAWANSHAR vs. INCOME TAX OFFICER,III(4), JALANDHAR

Following grounds have been raised in this appeal: “1. The appellate order is illegal, perverse, arbitrary, not based on the facts of the case and the law. 2. That the Ld. CIT (A) erred to decide the appeal without service of notice of hearing at email address of the company as available on the website of Ministry of corporate Affairs and prescribed under Rule 127(2)(a)(iv) or 127(2)(b)(iii) of IT Rules because there was change in the management of the company and the new management was not aware that an appeal was pending or fixed for hearing. 3. That the Ld. CIT (A) erred to dismiss the appeal ignoring the fact that case of the assessee for the AY 2006-07 was selected for scrutiny as per action plan for the assessment year 2007-08 and notice u/s 143(2) which was required to be served on or before 30-09-2007 was issued on 04-03-2008. This defect is incurable and the AO illegally assumed jurisdiction. It is prayed that order may be cancelled.

Facts of the case in brief are that the assessee filed the return of income on 31.03.2007 declaring Nil income. The AO, however, framed the assessment at an income of Rs.3,52,000/- which was the amount of unsecured loans received by the assessee from Sh. Kulwant Singh.

Being aggrieved the assessee carried the matter to the ld. CIT(A) who passed the ex-parte order by observing in para 4 of the impugned order as under: “4. From the above stated facts and in the circumstances of the case, it is clear that the assessee is not interested in pursuing the appeal filed by it. As sufficient opportunity of being heard was already provided to the assessee, I am of the opinion that no more opportunity is required to be given to the assessee firm. Therefore, the appeal filed by the assessee is being decided ex-parte on the basis of material available on the record. On account of continuous non compliance, I am of the opinion that the assessee has nothing to say with regard to the additions made u/s 143(3) of the IT Act in its case.”

Now the assessee is in appeal. The ld. Counsel for the assessee submitted that no notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act) was served upon the assessee. Therefore, the assessment framed by the AO without serving the notice u/s 143(2) of the Act was not valid. It was further submitted that the ld. CIT(A) had not given any opportunity of being heard and no notice of hearing was served upon the assessee.

I have considered the submissions of both the parties and perused the material available on the record. In the present case, it is noticed that the ld. CIT(A) in para 3 of the impugned order has mentioned that notices of hearing were issued to the assessee from time to time but there was no compliance. He dismissed the appeal of the assessee without discussing the issues on merit. It is also noticed that the ld. CIT(A) nowhere mentioned in the impugned order that the notice for hearing was served upon the assessee. It is well settled that nobody should be condemned unheard as per the maxim “audi alteram partem”. I, therefore, by keeping in view the principles of natural justice, deem it appropriate to set aside this issue back to the file of the ld. CIT(A) to be decided afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes. (Order Pronounced in the Court on 07/01/2019)