SHILA DEVI,SRI GANGANAGAR vs. INCOME TAX OFFICER , SURATGARH
Facts
The appeals were filed by the assessees against ex-parte orders passed by the authorities below. The assessees claimed that the addition made was without proper appreciation of facts and in violation of natural justice principles, as they were not granted adequate opportunity to be heard. The addition was related to cash deposited in the bank account, which was claimed to be from the sale of agricultural land.
Held
The Tribunal held that the authorities below erred by passing ex-parte orders without granting the assessees a reasonable opportunity of being heard. The Supreme Court's observation in the Tin Box Company vs. CIT case was cited, emphasizing that assessment orders must be made after providing an adequate opportunity for the assessee to present their case.
Key Issues
Whether the assessment orders passed ex-parte, without granting adequate opportunity of being heard to the assessee, violated the principles of natural justice.
Sections Cited
144/147, 144B
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Income Tax Appellate Tribunal, JODHPUR BENCH (Virtual
Before: SHRI LALIET KUMAR, HONBLE & DR. MITHA LAL MEENA, HONBLE
DR. MITHA LAL MEENA, A.M.: The Captioned appeals are filed by the assessees against the separate orders dated 09/01/2025 and 24/04/2024 passed by the Ld. National Faceless Appeal Centre (NFAC/ CIT (A), in respect of Assessment Year: 2018-19 and 2010- 11 respectively, challenging therein the orders of the authorities below passed ex parte qua the assesse.
Since there was common issue involved in both these appeals related to violation of natural justice and hence these two appeal were heard on the same date although argued by separate counsel and adjudicated by this consolidated order for brevity. The facts are discussed from ITA No. 242/Jodh/2025 (Assessment Year 2018-19) as a lead case.
At the outset, the Ld. Counsel submitted that the Ld. CIT(A)/NFAC has erred in confirming the addition without going into merits of the case and that the said addition was made by the AO in an ex parte assessment order passed u/s 144/147 of the act in violation of principles of Natural Justice. He further submitted that the worthy CIT(A) has grossly erred in confirming the same without appreciating the facts on merits of the case that the assesse has explained the receipts out to sale of agriculture land which is not a capital asset. In Support, he has filed a copy of certificate issued by Municipal Corporation, Anupgarh in connection with the status of land as assessed ex parte by ITO, Suratgarh who has passed assessment order under section 147/144 read with section 144B without proper appreciation of the facts and granting adequate opportunity to the assessee that the disputed amount of cash Rs. 31,84,000/- deposited in the bank account out of the sale proceeds of agricultural land. He contended that neither the AO nor the Ld. CIT(A) has addressed the relevant matter regarding appellants claim of source being the sale proceeds of agricultural land being deposited in the Bank account which goes to the root of the matter. Accordingly, he pleaded that the matter may be remanded back to the AO to pass de novo assessment after granting adequate opportunity of being heard. In support, he placed reliance on Judgement of Delhi High Court in the case of "Bharat Aluminium Company Ltd. vs. Union of India", [2022] 134 taxmann.com 187 (Delhi) where it was observed that Assessee would have a vested right to personal hearing in faceless assessment proceeding under section 144B and granting of personal hearing would not be discretionary as per individual facts of each case.
Per contra, the Ld. DR although supported the impugned order, however, he has no objection to the request of the appellant in view of principles of natural justice.
Heard rival contentions, perused the material on record, impugned order, written submission and case law cited before us. Admittedly, the revenue authorities have 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 against the ex parte assessment order passed under section 144/147 of the act and 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 passed u/s 144 r.w.s. 147 of the I.T. Act. It is seen that neither the AO nor the Ld. CIT(A) has addressed the relevant issue on merits of the case that the assesse explained the source of cash deposit in its bank account was being the sale consideration of agricultural land.
In view of the principles of natural justice, the authorities below ought to have disproved the claim of the assessee by way of rebutting its contention with support of corroborative documentary evidence on record after granting an adequate opportunity of being heard. The Hon'ble Supreme Court of India in the 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."
In view of the principles of natural justice, 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 evidences filed on record and may be filed before him during the fresh Assessment Proceedings after granting sufficient opportunity of being heard to the assessee with a direction that the AO shall issue a Show Cause Notice and thereafter pass a reasoned order in accordance with law.
Accordingly, Assessment order is set aside and matter is remanded back to the file of the assessing officer to pass de novo assessment as per law.
The issue related to violation of principles of natural justice and facts in 523/Jodh/2024 is similar to the issue adjudicated by us in ITA No. 242 Jodh/2025 except the slight variation in nature of land that in this case it was claimed inherited land. Therefore, our observation and finding given in ITA No. 242 Jodh/2025 shall apply in ITA No. 523/Jodh/2024 in mutatis mutandis, ordered accordingly.
In the result, both the captioned appeals of the assesses are allowed for statistical purposes. Order pronounced on 17/06/2025 in the open court. - (LALIET KUMAR) JUDICIAL MEMBER Dated :.1.7./.6.6/2025 (DR. MITHA LAL MEENA) ACCOUNTANT MEMBER Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By Oder
