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Facts
The assessee, a trust, filed its return declaring NIL income and claimed deductions. The CPC disallowed these claims during processing. After a rectification application was rejected, the assessee appealed to the CIT(A), who decided the appeal ex-parte without hearing the assessee.
Held
The Tribunal held that the assessee was deprived of an effective opportunity of being heard due to an email address mismatch, violating principles of natural justice. The appeal was therefore set aside and restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without providing a reasonable opportunity of being heard to the assessee due to technical issues in communication.
Sections Cited
154, 11(1)(a), 12A, 143(1)
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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR
आयकर अपीलीय अिधकरण, अहमदाबाद "ायपीठ “ए“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD सु"ी सुिच"ा का"ले, "ाियक सद" एवं "ी मकरंद वसंत महादेवकर, लेखा सद" के सम"। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं / Year : 2022-23 Sarvajanik Kelavni Mandal The Dy.CIT बनाम/ Amroli Station Utran Cirtcle-2,Exemption Ward v/s. Choryasi, Ahmedabad – 380 015 Surat – 394 107 "थायी लेखा सं./PAN: AABTS 4579 B अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee by : Shri Sapnesh Sheth, CA Revenue by : Shri Alpesh Parmar, CIT-DR सुनवाई की तारीख/Date of Hearing : 22/04/2025 घोषणा की तारीख /Date of Pronouncement: 23/04/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM:
This appeal by the assessee is directed against the order passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”], dated 21.10.2024, for the assessment year 2022-23, arising out of rectification proceedings under section 154 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"].
Facts in brief: 2. The assessee, a trust registered under section 12A of the Act and the Bombay Public Trust Act, had filed its return of income declaring NIL income Sarvajanik Kelavni Mandal vs. DCIT Cir-2, Exemption Ward Asst. Year : 2022-23 for the year under consideration. In the said return, the assessee claimed deduction of expenditure incurred towards the objects of the trust amounting to Rs.8,99,61,404/- and statutory deduction under section 11(1)(a) amounting to Rs.1,09,02,771/-. The Centralized Processing Centre (CPC), while processing the return of income under section 143(1) of the Act, did not allow the aforesaid claims. The assessee thereafter filed an application for rectification under section 154 of the Act, which was also rejected by the CPC. Aggrieved by the same, the assessee filed an appeal before the learned CIT(A). The appeal was fixed for hearing on multiple occasions; however, the learned CIT(A) proceeded to decide the appeal ex-parte in absence of any compliance from the assessee and dismissed the same.
The assessee, therefore, preferred an appeal before us and raised following grounds of appeal:
1. On the facts and circumstances of the case as well as law on the subject, Ld. CIT(A), NFAC has erred in passing ex-parte order without providing reasonable opportunity of being heard.
2. On the facts and circumstances of the case as well as law on the subject, Ld. CITA), NFAC has erred in confirming the action of A.O in not allowing the claim of deduction of expenditure incurred for the object of trust amounting to Rs.8,99,61,404/-
3. On the facts and circumstances of the case as well as R law on the subject, Ld. CIT(A), NFAC has erred in not allowing statutory deduction u/s 11(1)(a) of the act while processing application u/s 154 of the act amounting Rs.1,09,02, 771/-.
4. It is therefore prayed that above addition made by assessing officer and confirmed by Commissioner of Income-tax (Appeals), NFAC may please be deleted.
5. Appellant craves leave to add, alter or delete any grounds) either before or in the course of hearing of the appeal. Sarvajanik Kelavni Mandal vs. DCIT Cir-2, Exemption Ward Asst. Year : 2022-23
During the course of hearing before us, the learned Authorized Representative (AR) submitted that the assessee did not receive any notice of hearing from the learned CIT(A) as the notices were sent to an e-mail address (aaakarawala@gmail.com) which was different from the e-mail address mentioned in Form No. 35 filed by the assessee (skmrvp1963@gmail.com). The learned AR submitted that due to this mismatch in e-mail communication, the assessee was deprived of an opportunity to present its case before the learned CIT(A) and prayed that the matter be restored to the file of the learned CIT(A) for fresh adjudication after granting a proper opportunity of being heard.
The learned Departmental Representative (DR) did not raise any serious objection to the prayer made by the learned AR for restoration of the matter.
We have carefully considered the rival submissions and perused the material available on record. It is evident from the record that the learned CIT(A) has disposed of the appeal ex-parte on the ground that the assessee had failed to comply with the notices issued for hearing. However, considering the specific contention raised by the learned AR that the assessee had not received the notices due to the error in the e-mail address, and in the absence of any contrary material placed on record by the Revenue to disprove the claim of the assessee, we are inclined to accept the submission that the assessee was deprived of effective opportunity of being heard.
6.1. It is settled law that no person should be condemned unheard, as enshrined in the principles of natural justice. The Hon’ble Supreme Court and Sarvajanik Kelavni Mandal vs. DCIT Cir-2, Exemption Ward Asst. Year : 2022-23 various High Courts have consistently held that reasonable opportunity of being heard must be afforded to the assessee before passing any adverse order.
6.2. In the interest of substantial justice, we are of the considered view that the assessee deserves one more opportunity to present its case before the learned CIT(A). Accordingly, we set aside the impugned order of the learned CIT(A) and restore the matter back to his file for fresh adjudication on merits, after affording reasonable and effective opportunity of being heard to the assessee.
6.3. The assessee is also directed to extend full cooperation and actively participate in the appellate proceedings before the learned CIT(A) without seeking unnecessary adjournments, failing which the learned CIT(A) shall be at liberty to decide the appeal in accordance with law and based on material available on record.