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Facts
The assessee filed an appeal against an ex-parte order of the CIT(A) which dismissed the appeal and confirmed an addition of Rs. 6,55,447/-. The assessment order was passed ex-parte under section 144 of the Income Tax Act, 1961, due to the assessee's non-appearance during assessment proceedings. The CIT(A) also dismissed the appeal ex-parte.
Held
The Tribunal held that the CIT(A) failed to follow the principles of natural justice by not ensuring that the hearing notice was effectively served on the assessee before dismissing the appeal ex-parte. The right to be heard is a fundamental aspect of any appeal proceeding.
Key Issues
Whether the CIT(A) followed the principles of natural justice and provided an effective hearing to the assessee before dismissing the appeal ex-parte.
Sections Cited
250, 143(1), 143(2), 142(1), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI. BR BASKARAN & SHRI. RAJ KUMAR CHAUHAN
O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the order dated 21.03.2024 of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961
The assessee e-filed its return of income on 25.09.2015 declaring total income of Rs. 42,31,270/- and the same processed u/s. 143(1) of the Act. The assessee is a proprietor of M/s. Ashapura Construction Co. and engaged in the business of civil contractors. The case was selected for scrutiny for examination of payment to related persons and unsecured loans under CASS and accordingly statutory notice under section 143(2) of the Act, dated 01.08.2016, was issued and duly served upon the assessee. Subsequently, the statutory notices u/s. 142(1) of the Act was issued and served. The assessee neither attended the assessment proceedings nor furnished any details. The show cause letter dated 09.10.2017 was also sent to the assessee asking him to explain the facts and made submissions on or before 13.10.2017, but no response came forward from the assessee. Hence, the best judgment assessment order u/s. 144 of the Act was passed. The said order was challenged before the Ld. CIT(A) who dismissed the appeal ex-parte and confirmed the addition of Rs. 6,55,447/-.
Narayansingh J. Deora; A.Y. 2015-16 3. None appeared on behalf of the assessee. We have heard the Ld. DR on behalf of the revenue and perused the material on record and the impugned order. The only question at this stage before us is whether the Ld. CIT(A) has followed the principal of natural justice and has given effective hearing to the assessee/appellant before dismissing the appeal?
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;” 5. On perusal of the order of the Ld. CIT(A), it is noticed that only hearing notice was sent on 31.01.2020 and there is nothing that the said notice was ever served upon the assessee or not?
It is settled law that no one should be condemned unheard. Since the assessment order was also passed ex-parte, therefore, we deemed it expedient that the Ld. AO need to pass afresh order after giving effective hearing to the assessee/appellant. The assessee/appellant shall submit his case before the Ld. AO as and when required/directed to do so by the Ld. AO.
In the result, appeal filed by the assessee is allowed for statistical purpose in the above terms.
Order pronounced in the open court on 08.10.2024