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Facts
The assessee's appeal was dismissed ex-parte by the CIT(A), who affirmed the ex-parte assessment order passed by the AO under section 144. The assessee argued that the CIT(A) rejected the appeal without affording a proper opportunity of being heard, violating principles of natural justice.
Held
The Tribunal held that both the AO and CIT(A) acted in violation of the principles of natural justice by not providing adequate opportunity to the assessee to present their case and evidence. The CIT(A) arbitrarily confirmed the assessment order without appreciating the facts and evidence.
Key Issues
Whether the ex-parte assessment and appellate orders, passed without affording sufficient opportunity of hearing to the assessee, are sustainable in law, violating principles of natural justice.
Sections Cited
144, 69
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Income Tax Appellate Tribunal, JODHPUR BENCH (Virtual
Before: DR. MITHA LAL MEENA, HONBLE & DR. S. SEETHALAKSHMI, HONBLE
This appeal by assessee is directed against the order of National Faceless Appeal Centre [in short, the Ld. NFAC/CIT(A)] dated 21.03.2024 with respect to the assessment year 2017-18 challenging therein rejection of appeal exparte qua the assessee by affirming the assessment order passed u/s 144 of the Act exparte.
We have heard both the sides and perused material on record. From the record, it is seen that the learned CIT (A) rejected the appeal of the assessee exparte qua the assessee by stating that the appellant has no evidence to substantiate the grounds taken and it has not even argued with any supporting evidence. However, he didn't mention the factum of granting opportunity to the assessee while adjudicating the assessment order passed exparte qua the assessee.
The Ld. AR argued that the order passed by the Ld. CIT was contrary to the principles of natural justice and had been made without due opportunity of hearing to the appellant. He contended that the Id. CIT(A) has erred in sustaining the finding of the AO, in arbitrary manner by way of wrongly stating the facts and not appreciating the true facts and merits of the case. He pleaded that the matter may be restored to the file of the AO to examine the veracity of the evidence with reference to the source of cash deposit in the bank account maintained with Union Bank of India and that the AO may pass assessment de novo after granting adequate opportunity of being heard to the assessee.
Per contra, the Ld. DR stands by the impugned order, however, he has no objection in remanding the matter to AO in view of natural justice.
Admittedly, the Ld. CIT has passed orders ex parte qua the assesse. The Ld. AR argued that the worthy CIT(A) decided the case exparte without granting opportunity of the hearing while confirming the assessment order passed by the AO in arbitrary manner without appreciating the submission and material evidence. It is noted that while deciding the case ex-parte, the Ld. CIT(A) has not appreciated the facts of the case and arbitrary confirmed the assessment order regarding the addition made on account of cash deposits u/s 69 of the Act. However, neither the AO nor the Ld. CIT(A) has addressed the relevant matter regarding appellants claim that the source of amount disputed stands expalined in the books of account of the assessee. In our view, the authorities below have acted in violation of principles of natural justice.
The Hon'ble Supreme Court of India in the case of Tin Box Company vs. CIT reported in 249 ITR 216 in which their Lordships of Supreme Court of India observed as under: "Assessment - Opportunity of being heard - Setting aside of assessment Assessment order must be made after the assessee has been given reasonable opportunity of setting out his case - Same not done - Fact that the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is assessment order that counts Assessment order set aside and matter remanded to assessing authority for fresh consideration."
Accordingly, we consider it deem fit to restore back the matter to the file of the Ld. AO to pass de novo assessment after considering the written submission and evidence filed on record and may be filed before him during the fresh proceedings after granting sufficient opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced on 25/11/2025 in the open court. (DR. S. SEETHALAKSHMI) JUDICIAL MEMBER (DR. MITHA LAL MEENA) ACCOUNTANT MEMBER. DATED 25/11/2025 Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By Oder