ARCIL CPS 003 III TRUST ,MUMBAI vs. ITO WARD 22(1)(6), MUMBAI

ITA 4400/MUM/2024Status: DisposedITAT Mumbai26 November 2024AY 2014-154 pages

AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the ex parte order passed by the Ld. CIT(A) was not sustainable. The Tribunal referred to Section 250(2)(a) of the Income Tax Act, 1961, which mandates the right to be heard at the hearing of an appeal. The Tribunal observed that the notices issued by the Ld. CIT(A) on various dates (21.07.2020, 27.01.2021, 27.12.2022, 06.01.2023) and the communication window opened on 01.11.2022, did not result in any response from the appellant. However, the impugned order itself indicated that there was no proof of due service or that the notices were brought to the notice of the appellant. The Tribunal concluded that an effective opportunity of hearing was not provided and that the principle of natural justice was violated. Therefore, the matter was restored to the file of the Ld. CIT(A) for providing an effective hearing. The impugned order was set aside, and the appeal was allowed in terms of this direction. The Tribunal expressly left undecided the merits of the original appeal.

What were the facts?

The assessee, Arcil CPS 003 ITI Trust, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order passed by the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi. The assessment year in question is 2014-15. The ITAT noted that the CIT(A) had dismissed the assessee's appeal ex parte because the assessee failed to present its case, despite notices being issued. The assessee contended that these notices were never received, preventing them from presenting their case and thus denying an effective opportunity of hearing. The revenue, represented by the Senior Departmental Representative, supported the CIT(A)'s order, stating there was no merit in the appeal.

What were the issues?

1. Whether the ex parte order passed by the Ld. CIT(A) under section 250 of the Income Tax Act, 1961, is vitiated due to denial of effective opportunity of hearing to the assessee? Assessee's Contention: The assessee argued that the notices issued by the Ld. CIT(A) were never received. Consequently, the assessee could not present its case before the Ld. CIT(A), who proceeded ex parte. This resulted in a decision on merits without providing an effective opportunity of hearing, rendering the impugned order illegal and liable to be set aside. Revenue's Contention: The Ld. DR supported the order of the Ld. CIT(A), stating that there was no merit in the appeal and it was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI

Before: SHRI NARENDRA KUMAR BILLATYA & SHRI RAJ KUMAR CHAUHAN

For Appellant: Shri Rahul Sarda, Ld. AR

For Respondent: Shri Lieder Panicker, Sr

O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the orders of Learned Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre, Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] dated 31.01.2023 for the A.Y. 2014-15, wherein the Ld. CIT(A) has dismissed the appeal ex parte as despite services of notice, the assessee failed to present its case before the Ld. CIT(A).

2. It was argued on behalf of the appellant/assessee that the notice issued by the Ld. CIT(A) were never received or served upon the assessee and as such they could not present its case before the Ld. CIT(A) who proceeded ex parte and decided the appeal on merit without giving effective opportunity of hearing to the assessee and as such the assessee was prevented from present its case before the Ld. CIT(A). Therefore, the impugned order suffers from illegality and liable to be set aside. The Ld. DR on the other hand supporting the judgment of the Ld. CIT(A) stating that there is no merit in the appeal and same is liable to be dismissed.

We have considered the rival submissions.Section 250 sub section 2(a) of "the Act" provides as under:

“Section 250 (2) The following shall have the right to be heard at the hearing of the appeal: - a. The appellant, either in person or by an authorised representative;” 4. It is evident from the provision that the hearing to be given is not a formality but an effective hearing is sine qua non for the purpose of upholding the principal of natural justice. We have examined the impugned order of the Ld. CIT(A) observed as under: -

During the course of the appellate proceedings, the appellant was granted opportunity to file submissions and documents in support of this case vide notices dated 21.07.2020 (fixing date of compliance 28.07.2020), 27.01.2021 (fixing date of compliance 09.02.2021), 27.12.2022 (fixing date of compliance 06.01.2023) and 06.01.2023 (fixing date of compliance 16.01.2023). Also communication window was opened by the NFAC on 01.11.2022. However, till date there has been no response from the appellant. Therefore, it is apparent that the appellant has no submissions/documents to submit in support of this case.

It is thus evident from the contents of the impugned order extracted above that no effective opportunity of hearing has been given and there is no proof that the notice sent on various dates were duly served or brought to the notice of the appellant/assessee.

For these reasons, we are of the considered opinion that matter needs to be restored to the file of the Ld. CIT (A) for giving effective hearing to the assessee who shall present its case before the Ld. CIT(A) within 60 days.

The impugned order is accordingly set aside and appeal filed by the assessee is allowed in above terms.

In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 25.11.2024

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