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Facts
The assessee appealed against an NFAC order, which upheld a CPC order dismissing a rectification application under Section 154. The NFAC had proceeded ex-parte against the assessee, despite an adjournment request, leading to the merits of the case not being examined, prompting the assessee to argue a lack of proper hearing opportunity.
Held
The Tribunal held that the NFAC order was unsustainable due to the denial of a proper hearing opportunity and non-examination of merits. It allowed the assessee's appeal for statistical purposes, directing the NFAC to restore the appeal, grant a fair hearing, and decide the matter afresh.
Key Issues
Whether the appellate authority erred in passing an ex-parte order without providing a fair opportunity of hearing, thereby failing to examine the case on merits.
Sections Cited
Section 154 of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCHES : F : NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI ANUBHAV SHARMA
This appeal is preferred by the assessee against the order dated 09.11.2023 of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, NFAC, Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeal No.CIT(A), Delhi-10/10079/2020- 21 arising out of the appeal before it against the order dated 26.06.2020 passed
On hearing both the sides, it comes up that amongst other grounds on merits, the assessee has raised grounds No.1 and 2 submitting that the impugned order of the NFAC has been passed without serving notice and effective opportunity of hearing. In this context, although the ld. DR has supported the findings of the NFAC, we find that the assessee had preferred the appeal before the NFAC against the impugned order passed by the CPC u/s 154 of the Act on 08.06.2020 whereby the CPC had dismissed the rectification application of the assessee. The NFAC, after taking into account, the fact that notices were issued on three occasions, preferred to proceed against the assessee/appellant ex parte assuming, that the assessee is not interested to prosecute the appeal. However, we find that in regard to notice dated 25.10.2023 by which the NFAC has fixed date of hearing and filing of submissions as 03.11.2023, the assessee had requested for adjournment. NFAC, without considering the same, preferred to proceed ex parte and then assumed that as assessee is not appearing the assessee has no grievance against the impugned order, thus, the merits were not examined.
The impugned order is, thus, not sustainable in the eyes of law as on the one hand the assessee was not given due opportunity of hearing and filing
Accordingly, we sustain ground No.1 and 2 and allow the appeal of the assessee for statistical purposes with the direction that NFAC shall restore the appeal to its records and after giving the assessee a fair opportunity of hearing proceed to decide afresh on the merits of the grounds as raised before NFAC.