MR PRAKASH VASUDEV GIDWANI,MUMBAI vs. THE ITO WARD 25(3)(1), MUMBAI

ITA 4886/MUM/2024Status: DisposedITAT Mumbai26 November 2024AY 2017-184 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the hearing provided under Section 250(2)(a) of the Act is not a mere formality but an effective hearing, which is a prerequisite for upholding the principles of natural justice. Examining the impugned order, the Tribunal noted that the tabulated opportunities of hearing provided by the CIT(A) indicated that notices were issued on various dates but remained uncomplied with. Crucially, there was no proof that these notices were duly served or brought to the assessee's notice. Therefore, the Tribunal concluded that no effective opportunity of hearing was granted to the assessee. Consequently, the impugned order was set aside, and the matter was restored to the file of the CIT(A) for granting an effective hearing to the assessee within 60 days. The appeal was allowed in these terms for statistical purposes.

What were the facts?

The assessee, Mr. Prakash Vasudev Gidwani, filed an appeal against the order of the CIT(A)/NFAC, Delhi, for Assessment Year 2017-18. 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 the notices were never received, preventing them from presenting their case and thus violating principles of natural justice. The revenue supported the CIT(A)'s order, stating there was no merit in the appeal. The Tribunal examined the impugned order and the notices issued.

What were the issues?

1. Whether the ex parte order passed by the CIT(A) under Section 250 of the Income Tax Act, 1961, is vitiated due to non-receipt of effective opportunity of hearing by the assessee? (Mixed question of law and fact) Assessee's Contention: The assessee argued that the notices issued by the CIT(A) were never received, leading to their inability to present their case. Consequently, the ex parte order was passed without providing an effective opportunity of hearing, rendering it illegal and liable to be set aside. Revenue's Contention: The revenue supported the CIT(A)'s order, arguing that the appeal filed by the assessee lacked merit and should 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 “SMC”, MUMBAI

Before: SHRI B R BASKARAN & SHRI RAJ KUMAR CHAUHAN

For Appellant: Shri Aanchal Vyas on, Shri Dharan

For Respondent: Shri Umesh Chandra

Pronounced: 26.11.2024

O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the order 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 24.07.2024 for the A.Y. 2017-18, 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).

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: -

“The details of opportunities of being heard provided to the assessee are tabulated below for ready reference: Notice issued u/s Issued date Fixing for Remarks 250 hearing ITBA/NFAC/F/AP 27.06.2024 03.07.2024 Remained L_1/2024- uncomplied 25/1066118940(1) Remained ITBA/NFAC/F/AP 04.07.2024 10.07.2024 uncomplied L_1/2024- 25/1066402798(1) Remained ITBA/NFAC/F/AP 11.07.2024 18.07.2024 uncomplied L_1/2024- 25/1066599713(1)

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 26.11.2024

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