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Facts
The assessees challenged ex-parte assessment orders passed under Section 144 of the Income Tax Act for Assessment Year 2017-18, which were confirmed by the CIT(A)/NFAC. The lower authorities upheld these orders based on the assessees' alleged non-compliance and non-cooperation, without considering the merits or providing an adequate opportunity of being heard. The Tribunal also condoned a 192-day delay in filing one of the appeals.
Held
The Tribunal determined that the ex-parte assessment orders were passed in violation of the principles of natural justice. Relying on a Delhi High Court judgment affirming the right to a personal hearing in faceless assessments, the Tribunal set aside the assessment orders and remanded both cases back to the Assessing Officer for a de novo assessment, instructing the AO to grant sufficient opportunity of being heard, including issuing a Show Cause Notice.
Key Issues
Whether the ex-parte assessment orders, confirmed by the CIT(A)/NFAC, violated the principles of natural justice by not providing adequate opportunity of being heard to the assessees.
Sections Cited
Section 144 of the Income Tax Act
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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. UDAYAN DASGUPTA
Per: DR. M.L. Meena, AM.:
These Captioned appeals are filed by the assessees against the separate orders dated 06/06/2024 and 26/02/2025 passed by the Ld. National Faceless Appeal Centre (NFAC/ CIT (A), in respect of Assessment Year: 2017-18, challenging therein the orders of the authorities below passed ex parte qua the assesse.
Since there was common issue involved in both these appeals related to violation of natural justice and hence these two appeal were heard together after hearing the Ld. DR, although none attended for these assesses. Further, we had rejected the adjournment application filed by one of these assessees being found the Ld. DR has no objection to the request of the assessee for the condonation of the delay in filing the appeal in view of the genuine and bonafide reasons for the said delay in filing the appeal before the tribunal. Accordingly, we condone the delay of 192 days and admit appeal on merits. The facts are discussed from (Assessment Year 2017-18) as a lead case.
We find from the record that the Ld. CIT(A)/NFAC has confirmed the ex- parte assessment order passed u/s 144 of the act, by merely observing that the assessee remained non-compliant and non-cooperative and did not submit any reply till the end of the process assessment proceedings. Accordingly, he concluded that he was constrained to uphold the order of the AO in absence of any supporting evidence, document presented by the appellant. Thus, the Ld. CIT (A)/NFAC without going into merits of the case, confirmed the addition made by the AO in an ex parte assessment order passed u/s 144 of the act in violation of principles of Natural Justice. In our view, the Ld. CIT(A)/NFAC ought to have appreciated the facts of the case and granted opportunity to the assessee in view of principles of natural justice before giving his blanket adverse casual observation.
Accordingly, we consider it deem fit that the matter may be remanded back to the AO to pass de novo assessment after granting adequate opportunity of being heard. In support, we place reliance on Judgement of Delhi High Court in the case of “Bharat Aluminium Company Ltd. vs. Union of India”, [2022] 134 taxmann.com 187 (Delhi) where it was observed that Assessee would have a vested right to personal hearing in faceless assessment proceeding under section 144 of the Act.
The Ld. DR has no objection in remanding the matter to the file of the AO for de novo assessment in view of principles of natural justice.
Thus, in view of the principles of natural justice, we restore back the matter to the file of the Ld. AO to pass de novo assessment after considering the written submission and evidences filed on record and may be filed before him during the fresh Assessment Proceedings after granting sufficient opportunity of being heard to the assesse and the AO shall issue a Show Cause Notice, and thereafter pass a reasoned order in accordance with law.
Accordingly, Assessment order is set aside and matter is remanded back to the file of the assessing officer to pass de novo assessment as per law.
The issue related to violation of principles of natural justice in 218/Asr/2025 in mutatis mutandis, ordered accordingly.
In the result, both the captioned appeals of the assessees are allowed for statistical purposes.
Order pronounced on 26.09.2025 in the open Court.