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Facts
The assessee is aggrieved by an order passed by the CIT(A) which upheld the assessment order. The original assessment order was passed ex-parte by the AO under Section 147 read with Section 144/144B of the Act. The assessee's first appeal before the CIT(A) was dismissed for non-compliance and lack of evidence.
Held
The Tribunal held that the assessment order passed by the AO was bad in law for want of personal hearing. However, the CIT(A) had provided multiple opportunities, which the assessee failed to avail. Considering the interests of justice, the Tribunal set aside the impugned order and remanded the matter back to the AO for a fresh denovo assessment.
Key Issues
Whether the assessment order is bad in law due to denial of personal hearing by the AO. Whether the CIT(A) was justified in dismissing the appeal for non-compliance by the assessee.
Sections Cited
253, 147, 144, 144B, 246A, 69A, 115BBE, 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: B.M. BIYANI & SHRI PARESH M JOSHI
the order bearing Number ITBA/NFAC/S/250/2024- 25/1069255512(1) dated 30.09.2024 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2013-14
Page 1 of 9 and the corresponding previous year period is from 01.04.2012 to 31.03.2013.
FACTUAL MATRIX 2.1 That as and by way of an assessment order bearing No.ITBA/AST/S/147/2021-22/1042340098(1) dated 31.03.2002 passed u/s 147 r.w.s. 144/144B of the Act, total income of the assessee was computed and assessed at Rs.6,60,86,950/-.
The returned income was Rs.3,64,950/-. An addition of Rs.6,57,22,000/- was made. The aforesaid assessment order is hereinafter referred to as “impugned assessment order”.
2.2 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers first appeal u/s 246A of the Act before Ld. CIT(A) who by the “impugned order” has dismissed the appeal of the assessee on grounds stated therein.
2.3 The core ground and reason for dismissal of first appeal under the Act were as follows:-
“9. Further, on perusual of Form-36, it is seen that the appellant has neither attached/uploaded any submission nor submitted any evidences/documents/ explanation in support of facts and grounds of appeal, Various opportunities were provided to the appellant in the interest of natural justice. The appellant has not furnished any written submissions in support of grounds of appeal filed in appellate proceedings.
The appellant has been provided sufficient opportunities but the appellant failed to submit any submission or evidence during appellate proceedings in support of grounds of appeal as well as statement of facts and remained non-compliant. Therefore, in view of the above facts. I am constrained to uphold the order of the Assessing Officer, in absence of any supporting evidence, documents submitted by the appellant. Accordingly, all the grounds of appeal are hereby dismissed.”
2.3 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in Form No.36 against the “impugned order” which are as under:-
“1. That, the learned CIT(A) as well as the Id. AO grossly erred, both on facts and in law, in passing the ex-parte orders without giving proper and effective opportunity of being heard to the appellant.
2. That, without prejudice to the above, the learned CIT(A) grossly erred in not adjudicating the appeal on merits of the case. 3a). That, without prejudice to the above, the learned CIT(A) grossly erred, in law, in confirming the action of the AO in assuming the jurisdiction under s.147 of the Income-Tax Act, 1961 and framing the assessment in consequence thereof. 3b). That, without prejudice to the above, the learned CIT(A) grossly erred, in law, in confirming the action of the AO in assuming the jurisdiction for framing the assessment under s.147 of the Act without having any objective reason to believe as regard to escapement of any income in the hands of the appellant.
4. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for determining the income of the appellant at Rs.6,60,86,950/- for the relevant assessment year as against the returned income of Rs.3,64,950/- thereby making an addition of Rs.6,57,22,000/- by framing an Assessment Order under s.147 r.w.s. 144 of the Income- Tax Act, 1961, which is quite unjustified, unwarranted, arbitrary, bad-in-law and void-ab-initio.
5. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the addition of Rs.6,57,22,000/- made by the AO on the allegation of unexplained money by invoking the provisions of s.69A of the Act without Page 3 of 9 properly considering and appreciating the facts and circumstances of the case.
5. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO in invoking the provisions of section 115BBE of the Act without properly considering and appreciating the facts and circumstances of the case.
That, the appellant further craves leave to add, alter or amend the foregoing ground of appeal as and when considered necessary”.
3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 22.07.2025 when the Ld. AR for and on behalf of the assessee appeared before us and interalia submitted that both the orders of lower authorities are ex-parte in nature and thus deserves to be set aside by this Tribunal. The Ld. AR pleaded for remand of the matter back to the file of Ld. A.O. Per contra the Ld. CIT-DR appearing for and on behalf of the revenue contended that the Ld. A.O had given an opportunity to the assessee and so also the opportunity was provided by Ld. CIT(A). The assessee has not made use of the opportunities so provided by both the lower authorities and therefore no fault can be found on the part of both the lower authorities below and orders passed by them are well within the four corners of law. It was prayed by him that “impugned order” should not be set aside as prayed by the Ld.
Page 4 of 9 AR. In the rejoinder argument it was finally prayed by the Ld. AR that ends of justice requires that income of the assessee must be assessed and computed according to law with full and complete opportunity to the assessee, so that he can aid the Assessing Officer to correctly assess and compute the income exigible to tax. Assessee is fully and willingly ready to cooperate with the revenue if last and final opportunity is afforded to the assessee so that ends of justice triumphs.
Observations,findings & conclusions.
4.1 We now have to decide the legality, validity and the proprietary of the “Impugned Order” basis records of the case and rival contentions canvassed before us.
4.2 We have carefully perused the records of the case.
4.3 We basis records of the case and after hearing and upon examining the contentions are of the considered opinion that the “impugned assessment order” is u/s 144 of the Act. We also notice that basis of paper book page 7 that the assessee in reply dated 14.03.2022 to the Ld. A.O’s notice dated 12.11.2021 u/s 142(1) of the Act had complied with requisitions so made and had also stated that same shall be with “glade” provided on Page 5 of 9 hearing. On careful perusal of the “impugned assessment order” we notice that there is nothing on record that an opportunity of hearing was provided to the assessee which we hold it to be a must as Ld. A.O is discharging a quasi judicial function which entails serious civil consequences on the assessee in the form of tax. Further law of the land contemplates that no tax shall be levied and collected save and except according to law. The due process of law requires an opportunity of hearing to be given. No such opportunity was given and nothing is discernable about any opportunity given to the assessee from the “impugned assessment order”. Both the Ld. AR & Ld. DR has not pointed out to this tribunal the factual position with regard to the opportunity whether it was provided or not to the assessee. Hence we hold that the “impugned assessment order” is bad in law for lack of opportunity of personal hearing to the assessee. Now coming to the “impugned order” of Ld. CIT(A) we notice that in all five opportunities were afforded to the assessee but the assessee has not availed a single opportunity nor has filed any submission/reply/evidence etc. hence the Ld. CIT(A) dismissed
Page 6 of 9 the 1st appeal. During the hearing it was vehemently pleaded that the assessee desire a last opportunity before the Ld. A.O where they would set up their defense and same would be in the interest of ends of justice. We are therefore of the considered opinion that the plea and the prayer so made by the Ld. AR needs a kind consideration by this tribunal in order to secure ends of justice. We also find that at the original stage of assessment the assessee had partly complied the requisitions as and by way of a reply but from the “impugned assessment order” more was expected by the Ld. A.O in form of books of accounts, audit report etc. Under these peculiar facts and circumstances, we feel and hold that an opportunity as and by way of a last opportunity be afforded to the assessee wherein he can produce all such documents, information, material etc which the Ld. A.O desires and which are relevant to the case in hand from the point of view of assessee also.
4.4 In view of aforesaid we set aside the “impugned order” and remand the case to the Ld. A.O as and by way of a last opportunity to the assessee. We sincerely hope and trust that Page 7 of 9 this one last opportunity the assessee will make use of it and file before the Ld. A.O all such information, documents, paper and material so that the Ld. A.O can adjudge and adjudicate the issue of computation of income in accordance with law.
Assessee to cooperate with Ld. A.O and not to seek any unnecessary adjournments, if any on flimsy ground.
Order 5.1 In the premises we set aside the “impugned order” as and by way of remand back to the file of Ld. A.O on denovo basis.
5.2 In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in open court on 28.07.2025.