SACHIN CHEMICAL UDYOG,KHEKRA BAGHPAT vs. ITO, WARD 1(5) MEERUT AT BARAUT, BARAUT BAGHPAT

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ITA 32/DEL/2026Status: DisposedITAT Delhi09 February 2026AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that since the CIT(A) had proceeded ex-parte against the assessee, the possibility of communication gaps between the taxpayer, auditor, and arguing counsel could not be ruled out. In the larger interest of justice, the Tribunal deemed it appropriate to restore the assessee's appeal back to the CIT(A) for fresh adjudication. The assessee is granted three effective opportunities to plead and prove its case at its own risk and responsibility. The Tribunal explicitly left undecided the merits of the disallowances/additions made by the Assessing Officer and affirmed by the CIT(A). The ratio decidendi is that in cases where an ex-parte order is passed due to potential communication breakdowns, restoring the appeal for a fresh hearing in the interest of justice is warranted, subject to the assessee bearing the responsibility for presenting its case.

What were the facts?

The assessee, Sachin Chemical Udyog, filed an appeal for Assessment Year 2017-18 against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi. This order, dated 04.11.2025, affirmed the Assessing Officer's actions under section 144 of the Income-tax Act, 1961. The CIT(A)/NFAC had proceeded ex-parte against the assessee. The amount in dispute is not explicitly stated. The procedural history involves the assessee's appeal to the CIT(A)/NFAC, which resulted in an ex-parte order, and subsequently, the assessee's appeal to the ITAT against this order.

What were the issues?

1. Whether the CIT(A)/NFAC was justified in proceeding ex-parte against the assessee and affirming the Assessing Officer's disallowances/additions under section 144 of the Income-tax Act, 1961, without considering the assessee's case on merits? Assessee's contentions: The assessee was not represented before the ITAT, and therefore, no arguments were recorded. However, the Tribunal's reasoning implies a potential for communication gaps leading to the ex-parte order. Revenue's contentions: The Revenue argued in support of the CIT(A)'s finding, stating that the assessee had not filed any explanation or evidence to support its case before the lower appellate authority.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

Hearing: 09.02.2026Pronounced: 09.02.2026

ORDER This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1082290462(1), dated 04.11.2025 involving proceedings under section 144 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

2.

It emerges at the outset during the course of hearing that the learned CIT(A)/NFAC in its detailed discussion has proceeded ex- parte against the assessee thereby affirming the Assessing Officer’s action making the corresponding disallowances/additions herein.

3.

The Revenue during the course of hearing vehemently argues in support of CIT(A)’s finding that the assessee had not filed any explanation or evidence supporting it’s case.

4.

I have given my thoughtful consideration to the foregoing rival stands and is of the considered view that since the CIT(A) has proceeded ex-parte against the assessee, possibility of some communication gaps between the taxpayer, auditor and the arguing counsel in such an instance could not be altogether ruled out.

5.

Faced with this situation, in the larger interest of justice, I deem it appropriate to restore the assessee’s instant appeal back to the CIT(A) for her afresh appropriate adjudication, within three effective opportunities subject to a rider that the taxpayer shall plead and prove the cases at his own risk and responsibility, in consequential proceedings. Ordered accordingly.

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