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Facts
The Collector Mining, Kondagaon, appealed against ex-parte orders passed by the Ld. CIT(Appeals)/NFAC for Assessment Years 2013-14 to 2019-20. These orders were issued because the assessee failed to comply with hearing notices over a period of approximately 4 years, leading to a lack of submissions and evidence at the first appellate stage.
Held
The Tribunal ruled that when an ex-parte order is passed by the First Appellate Authority due to the assessee's non-compliance, the matter must be remanded back to the CIT(Appeals)/NFAC. This allows for a de-novo adjudication on merits after providing the assessee a final opportunity to present its case, as the Tribunal cannot address issues without a substantive order from the lower authority.
Key Issues
Whether the ITAT should decide on the merits of an appeal or remand it, when the CIT(Appeals)/NFAC passed an ex-parte order due to the assessee's non-compliance, and no merits were examined at the first appellate stage.
Sections Cited
250(4), 250(6)
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI AVDHESH KUMAR MISHRA
आदेश / ORDER PER BENCH: The captioned appeals preferred by the assessee emanates from the respective orders of the Ld.CIT(Appeals)/NFAC, Delhi dated 13.11.2025 for the assessment years 2013-14 to 2019-20 as per the grounds of appeal on record.
Both the parties herein conceded that the facts and issues involved in all these appeals are absolutely identical and similar. Having heard their submissions, all these appeals were heard together and disposed of vide this consolidated order.
At the very outset, it is noted that in all these appeals, an ex-parte order has been passed by the Ld. CIT(Appeals)/NFAC vide paras 5 & 5.1 of the respective orders due to non-compliance by the assessee. There is no doubt of the fact that reasonable opportunities were provided to the assessee. However, the assessee did not comply with the hearing notices which had resulted in passing of ex-parte orders. For the sake of clarity, the paras 5 & 5.1 of the Ld.CIT(Appeals)/NFAC order in A.Y.2013-14 are extracted as follows:
1. “5. Examination of the issue and decision: Further appellant was provided final opportunity vide notice 15/10/2025 to substantiate the grounds of appeal raised.
3 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025
1. But no reply or details have been filed by the appellant till date. Compliance history: S.N. Date of notice Date of hearing Remarks issued 1. 21/01/2021 27/01/2021 Notice was sent through ITBA but proceedings remained un- complied with. 2. 26/09/2025 01/10/2025 Notice was sent through ITBA but proceedings remained un- complied with. 3. 06/10/2025 13/10/2025 Notice was sent through ITBA but proceedings remained un- complied with. 4. 15/10/2025 28/10/2025 Notice was sent through ITBA but proceedings remained un- complied with.
1. 5.1 By it own Act, the appellant has failed to remain vigilant and did not avail the opportunity to submit its point of view/contention, as it did not respond to various notices issued. The fact that the appellant did receive the order filed the present appeal, but chose not to respond to any of the 4 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025 notices issued by this office clearly establish total disregard to the due process of law. Therefore, the conclusion that the appellant could not controvert the findings given by the A.O on merits of the issue is inescapable.” to 777/RPR/2025 for A.Ys.2014-15 & 2019-20 are concerned, again as per paras 5 & 5.1 of the impugned orders, the Ld.CIT(Appeals)/NFAC passed an ex-parte orders due to non-compliance by the assessee. The same are only being referred to and not extracted for the sake of brevity.
At the time of hearing, the Ld. Counsel for the assessee submitted that the issue involved in the captioned appeals is squarely covered in favour of the assessee by the judgment of the Hon’ble Apex Court. However, he could not explain the reasons why there was non-compliance by the assessee before the Ld. CIT(Appeals)/NFAC. The Ld. Counsel for the assessee only submitted that the assessee is a government body and since the issue is covered by the judgment of the Hon’ble Supreme Court, therefore, the fact of non-compliance before the Ld. CIT(Appeals)/NFAC actually does not matter.
Per contra, the Ld. Sr. DR submitted that in these parameters of an ex-parte order being passed, the bench had provided one final opportunity to the assessee to explain the matter on merits before the Ld. CIT(Appeals)/NFAC providing benefit of doubt to the assessee for such 5 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025 non-compliance and in the interest of natural justice, therefore, the matter should be remanded back to the file of the Ld. CIT(Appeals)/NFAC for denovo adjudication as per law in terms with settled principles on the present facts of ex-parte order by the Ld. CIT(Appeals)/NFAC as decided by ITAT, “Division Bench”, Raipur in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, IT(SS)A Nos. 1 to 6, 8 & 9/RPR/2025, dated 20.03.2025.
We have heard the submissions of the parties herein and analyzed the facts and circumstances in this case. We note that in all these appeals, an ex-parte order has been passed by the First Appellate Authority due to non-compliance by the assessee. The proceedings before the Ld. CIT(Appeals)/NFAC dates back from 27.01.2021 to 28.10.2025 i.e. nearly 4 years (approx.). Admittedly, reasonable opportunities were provided to the assessee. However, there was no compliance from the assessee on any date of hearing. Further, the Ld. Counsel for the assessee simply submitted that the assessee is a government entity and the facts and issues are squarely covered by the decision of the Hon’ble Apex Court, therefore, non-compliance by the assessee before the Ld. CIT(Appeals)/NFAC does not matter. The Act is very clear about the fact of adjudication by the First Appellate Authority through which such orders should be passed in terms with Section 250(4) & (6) of the Act. Meaning
1. 6 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025 thereby, there must be adjudication on merits by the First Appellate Authority on the entire subject matter. Suppose, if there is no compliance by the assessee nor any evidence have been filed in such case, the First Appellate Authority does not have any option but to pass an ex-parte order. In such scenario, considering the principles of natural justice and the fact that tax payer assessee should be provided benefit of doubt the ITAT, “Division Bench”, Raipur in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur (supra) had provided one final opportunity to the assessee to represent the matter on merits before the First Appellate Authority. In the said decision (supra), therein also it was submitted by the Ld. Counsel that the legal issue should be decided by the Tribunal. However, it was held therein that the Tribunal is a statutory authority and emanates from the Act itself and it is therefore not a constitutional authority so to allow any usurp of power of another statutory authority i.e. the Ld. CIT(Appeals)/NFAC.
In other words, as per the intent of the legislature the First Appellate Authority has to pass order in terms with Section 250(4) & (6) of the Act and thereafter, the matter if appealed before the Tribunal it would look into the correctness of the decision by the sub-ordinate authorities, whether the law has been correctly applied to the facts of the case while determining the substantive rights and liabilities of the parties. There
1. 7 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025 cannot be any short cut route allowed to the assessee for assailing any legal ground or saying that the matter is squarely covered by the judgment of the Hon’ble Apex Court and get relief from Tribunal even without bothering to comply with the hearing notices before the First Appellate authority. If such practice is allowed, the entire intention of the legislature and the process of adjudication before the Ld. CIT(Appeals)/NFAC as per the Act will get defeated and as a statutory body, the Tribunal cannot travel beyond the intent of the fiscal statute. The Act is very clear that there has to be compliance by the assessee before the Ld. CIT(Appeals)/NFAC and he must pass orders in terms with Section 250(4) and (6) of the Act and thereafter, the matter if appealed before the Tribunal, it has to be decided on the issues as per law and facts. Since in the present case as discernable from record there was no compliance by the assessee before the First Appellate Authority, we, therefore, refer to our decision in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur (supra) wherein the same parameters were examined and held that in case of an ex-parte order being passed by the Ld. CIT(Appeals)/NFAC due to non-compliance by the assessee, the matter has to be restored back to the file of Ld. CIT(Appeals)/NFAC and it was not open for the Tribunal to address any issue in absence of any substantive order as per Section 250(4) & (6) of the Act by the Ld. CIT(Appeals)/NFAC
8 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025 which in fact is in the best interest of balancing the scales of justice. The relevant paras are as follows: “7. We have considered the submissions of the parties herein and analyzed the facts and circumstances involved in all the captioned appeals. After careful perusal of the documents on record, we find that the assessee had assailed the legal ground as aforestated, however, the fact of the matter is that on perusal of the respective orders of the Ld. CIT(Appeals) for all the years before us, it is also evident from Para 3 that there has been no compliance by the assessee before the said authority and as such, an ex-parte order was passed for the concerned years in appeal. Admittedly, as per record, sufficient opportunities had been provided to the assesse, however, there was no compliance by the assessee. In effect, rights and liabilities of the parties herein are yet to be adjudicated substantially at the level of the first appellate authority. Though in the impugned orders, discussion has been done as per material available on record by the Ld.CIT(Appeals) but they are only Form 35, statement of facts, grounds of appeal and the assessment order. However, due to non-compliance by the assessee, there are no submissions, evidence and documents submitted for adjudication by the assessee before the Ld. CIT(Appeals). That as per Para 3 of the Ld. CIT(Appeals) order, there has been no compliance on the part of the assessee for submitting detailed explanations regarding the grounds of appeal for the years under consideration which clearly shows that the grounds of appeal raised before the first appellate authority has not been substantiated on merits through corroborative evidence /submissions.
8. That in such scenario we are of the considered view that the Income tax Act is within the ambit of welfare legislation which are completely different from that of the penal legislation, therefore, benefit of doubt whenever arises, it has to be interpreted in favour of the assessee tax payer within the parameters of law and facts. There may be circumstances beyond control of the assessee because of which, the assessee may not have been able to represent his case on the given dates of hearing before the Ld. CIT(Appeals). Though it is correct that there was no compliance from the side of the assessee, however, nothing is there on record which suggests any deliberate non-compliance or malafide conduct of the assessee. That further, if one final opportunity is provided to the assessee to represent his case before the first appellate
9 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025 authority, the position of the revenue will also not be jeopardized. Recently, the Hon’ble High Court of Bombay in the 9. Vijay Shrinivasrao Kulkarni Vs. Income-tax case of Appellate Tribunal (2025) 171 taxmann.com 696 (Bom.), dated 04.02.2025 observed that in the case the Assessing Officer had passed an ex-parte order and when the matter went on appeal before the Ld. CIT(Appeals)/NFAC, it had also dismissed the matter ex-parte due to non-compliance by the assessee’s authorized representative, when the matter came up before the ITAT, it had failed to address the infirmity regarding the fact that the assessee was not afforded proper opportunity of being heard and the matter was dismissed ex-parte by the Ld. CIT(Appeals)/NFAC which amounted to violation of principles of natural justice, and instead ITAT decided the case on merits, in such circumstances, the Hon’ble High Court of Bombay held that passing of an order on merits by the ITAT even when the impugned order was passed ex-parte amounts to violation of principles of natural justice and accordingly, the said matter was remanded to ITAT for passing a fresh order in accordance with law after hearing the parties. The legal principle as enshrined in the present judgment is crystal clear that the principles of natural justice i.e. the right to be heard is to be provided and accordingly, the matter had to be substantially adjudicated by the appellate authority. Therefore, if the impugned order of the Ld. CIT(Appeals)/NFAC is an ex- parte order, the only recourse in conformity with the aforesaid judicial pronouncement is to remand the matter back to the file of the Ld. CIT(Appeals)/NFAC for fresh adjudication in terms with the principles of natural justice providing one final opportunity to the assessee.
10. In the aforesaid case, the Hon’ble High Court of Bombay had referred to a judgment of the Hon’ble Supreme Court in the case of Delhi Transport Corporation vs. DTC Mazdoor Union AIR 1999 SC 564, wherein the Supreme Court inter-alia held that Article 14 guarantees a right of hearing to a person who is adversely affected by an administrative order. The principle of audi-alteram partem is a part of Article 14 of the Constitution of India. In light of such decision, the petitioner ought to have been granted an opportunity of being heard which, partakes the characteristic of the fundamental right under Article 14 of the Constitution of India.
The Hon’ble High Court of Bombay in the aforesaid case had referred to a decision of the Hon’ble Supreme Court
10 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025 in the case of Commissioner of Income Tax Madras v. Chenniyappa Mudiliar 1969 1 SCC 591, wherein the Supreme Court in interpreting the section 33(4) of the Income Tax Act, 1922 has held that the appellate tribunal was bound to give a proper decision on question of fact as well as law, which can only be done if the appeal is disposed off on merits and not dismissed owing to the absence of the appellant. Reverting to the facts of the present case the grounds of appeal were simply filed before the Ld.CIT(Appeals) they were not substantiated or corroborated through submissions and filing of documentary evidences since the assessee had not complied before the Ld.CIT(Appeals) on the dates of hearing. Therefore, as per framework of the Act there must be adjudication on merits by the first appellate authority and one final opportunity be provided to the assessee to represent his matter on merits in the interest of natural justice.
12. There may even be a situation where the Ld. Counsel for the assessee may assail a legal ground before the Tribunal following the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) with a contention that irrespective of the order of the Ld. CIT(Appeals) being ex-parte, the Tribunal may decide the legal issue that has been raised by the Ld. Counsel. In our view, the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (supra) provides that any legal issue which goes to the root of the matter and is established through legal principles, the assessee can take up and raise such legal issue at any appellate forum irrespective of whether the assessee had raised such legal issue at the sub-ordinate level or not, however, it always depends on facts and circumstances of each case whether the Tribunal would decide the legal ground or in a case where the question is of natural justice and ex-parte order by the Ld. CIT(Appeals) the Tribunal would remand it back to Ld.CIT(Appeals) providing final opportunity to a bonafide assessee. The Tribunal as the highest fact finding authority must be certain enough that the impugned order before it has been passed on merits and is a speaking order where the assessee has also complied during the process of litigation. In case, where the order of the Ld. CIT(Appeals) itself is ex-parte and some legal ground is raised and if the Tribunal decides such legal ground where in fact principles of natural justice is left unanswered due to the fact that the impugned order before the Tribunal is ex-parte and there was no compliance by the assessee in such scenario the Tribunal would also be usurping the power of the Ld. CIT(Appeals) which is also a statutory authority as per the Act. This is due to the 11 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025 reason that as per framework of the Act, Ld.CIT(Appeals) is the first appellate authority where an appeal by assessee it would be substantially decided through a speaking order by the Ld.CIT(Appeals). When this part is over and either party is aggrieved second appeal lies before the ITAT. Now if for every ex-parte order passed by the Ld. CIT(Appeals), of course due to non-compliance by the assessee, if the Tribunal adjudicates a legal ground, for instance validity of assessment or reassessment order and answers it in favour of the assessee then it would create an easy route for assessee getting redressal from Tribunal even without bothering to comply with hearing notices before the Ld. CIT(Appeals). This would dismantle the structure of the Act which is definitely not the intention of the legislature. Here in this situation, where the benefit of doubt is given to the assessee since he had not complied with the hearing notices before the Ld. CIT(Appeals) which resulted in passing of an ex-parte order by the Ld. CIT(Appeals), in such scenario, as per the scheme of the Act and following the principles of natural justice, the only course of action is to remand the matter back to the file of the Ld. CIT(Appeals) for adjudication on merits providing one final opportunity to the assessee.
In view thereof, we set aside the respective orders of the Ld. CIT(Appeals) for all the years and remand the same to their file for denovo adjudication on merits. At the same time, we direct the assessee that this being the final opportunity, there must be compliance on merits before the first appellate authority. Needless to say, the Ld. CIT(Appeals) shall provide reasonable opportunity of being heard to the assessee and pass an order in terms of Section 250(4) and (6) of the Act within three months from receipt of this order.”
Respectfully following the aforesaid order, on the same parity of reasoning and as per rule of consistency, we set-aside the respective orders of the Ld. CIT(Appeals)/NFAC and remand the matters back to its file for denovo adjudication while complying with the principles of natural justice. At the same time, it is directed that this being the final opportunity, the assessee shall duly comply with the hearing notices from the Ld.CIT(Appeals)/NFAC and represent the matters on merits. The 12 Collector Mining, Kondagaon Vs. DCIT (TDS), Raipur to 777/RPR/2025 Ld.CIT(Appeal)/NFAC shall consider the submissions of the assessee and accordingly pass speaking order in terms with Section 250(4) & (6) of the Act.
As per the aforesaid terms, the grounds of appeal raised by the assessee stands allowed for statistical purposes.
In the result, all the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 12th March, 2026.