BHARAT POPATLAL GADA,MUMBAI vs. INCOME TAX OFFICER 21(1)(2), MUMBAI

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ITA 4903/MUM/2024Status: DisposedITAT Mumbai26 November 2024AY 2011-20124 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 ex parte order passed by the Learned CIT(A) was unsustainable. It referred to Section 250(2)(a) of the Act, which mandates the right to be heard for the appellant. The Tribunal observed from the CIT(A)'s order that while multiple notices were issued, there was no proof of their due service or that they were brought to the notice of the appellant. The Tribunal concluded that an effective hearing is a sine qua non for upholding the principles of natural justice and that the provided opportunities were not effective. Therefore, the matter was restored to the file of the Learned CIT(A) for granting an effective hearing, with the assessee directed to present its case within 60 days. The impugned order was set aside, and the appeal was allowed in these terms for statistical purposes.

What were the facts?

The assessee, Bharat Popatlal Gada, filed an appeal before the Learned Commissioner of Income Tax (Appeals) - 1, Chandigarh, for Assessment Year 2011-12. The CIT(A) dismissed the appeal ex parte, stating that despite notices, the assessee failed to present its case. The assessee's appeal to the Income Tax Appellate Tribunal (ITAT) challenges this ex parte order. The procedural history indicates multiple notices were issued by the CIT(A) for various hearing dates, none of which the assessee claims to have received or acted upon, leading to the ex parte decision.

What were the issues?

1. Whether the ex parte order passed by the Learned 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 contentions: The assessee argued that the notices issued by the Learned CIT(A) were never received, preventing them from presenting their case. Consequently, the ex parte order was passed without affording an effective opportunity of hearing, rendering it illegal and liable to be set aside. Revenue's contentions: The Learned DR supported the order of the Learned 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 “SMC”, MUMBAI

Before: SHRI B R BASKARAN & SHRI RAJ KUMAR CHAUHAN

For Appellant: Shri Vipul Shah, Ld. AR
For Respondent: Shri Umesh Sinha, Ld. DR
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) /Addl. JCIT – 1, Chandigarh [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] dated 21.08.2024 for the A.Y. 2011-12, 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.

3.

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, but the assessee has failed to comply the notices and no any written submission has been filed, which are tabulated below for ready reference: Sr. No. Date of notice issued Date of hearing 1 04.02.2021 19.02.2021 2. 09.02.2024 19.02.2024 3. 20.02.2024 27.02.2024 4 12.03.2024 20.03.2024 5 31.07.2024 12.08.2024

5.

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.

6.

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.

7.

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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