GANESH GINNING AND PRESSING FACTORY (HO) BRANCH RADHESHYAM PRATISHTHAN,HARDA (MADHYA PRADESH) vs. INCOME TAX OFFICER WARD 1HARDA, HARDA (MADHYA PRADESH)
What did the Tribunal hold?
The Tribunal held that the matter should be remanded back to the file of the CIT(A) for fresh adjudication. The reasoning was based on upholding the principles of natural justice and fair play. The CIT(A) was directed to provide the assessee with a necessary opportunity of hearing and to pass an appropriate order, uninfluenced by its previous order. The assessee was also directed to ensure its participation in the hearings fixed by the CIT(A) and to avoid seeking unnecessary adjournments. The Tribunal noted that if the assessee failed to comply, the CIT(A) would be at liberty to pass an appropriate order in accordance with the law. No specific issue was left undecided; the entire matter was remitted for a de novo hearing.
What were the facts?
The assessee, M/s Ganesh Ginning and Pressing Factory, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Indore Bench, against an order dated 23.06.2023 passed by the Commissioner of Income-Tax (Appeals)-NFAC, Delhi. This order arose from an assessment order dated 30.12.2016 passed by the ITO-1, Harda, under Section 143(3) of the Income-tax Act, 1961, for Assessment Year 2014-15. The assessee contended that the CIT(A) had issued three notices for hearings, with the first notice served during the Covid pandemic. Subsequent notices were issued with a significant time gap and in close succession via email, preventing the assessee from attending the hearings, leading to an ex-parte order.
What were the issues?
1. Whether the ex-parte order passed by the CIT(A) is sustainable in light of the procedural issues raised by the assessee regarding the service of hearing notices and the opportunity to be heard, thereby violating principles of natural justice? (Question of mixed law and fact, concerning principles of natural justice and procedural fairness under the Income-tax Act). The assessee argued that the CIT(A) failed to provide adequate opportunity for hearing due to the timing and manner of notice issuance, particularly during the Covid pandemic and subsequent short notice periods. The assessee expressed willingness to represent its case if given a fresh opportunity and prayed for a remand to the CIT(A) for proper adjudication. The revenue, through the Senior Departmental Representative, agreed with the assessee's prayer for remand but requested a direction for the assessee to diligently present its case without seeking unnecessary adjournments.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश / O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 23.06.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 30.12.2016 passed by learned ITO-1, Harda [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment- Year [“AY”] 2014-15, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).
Ld. AR for assessee submitted that the CIT(A), while conducting first- appeal, has served three notices of hearings out of which first notice was served on 26.12.2020 during Covid pandemic period and subsequent two notices were served on 24.05.2023 & 12.06.2023 after a gap of about two and half years. Further, the subsequent notices were issued within a short span of certain days on the email id. Therefore, the assessee could not attend hearings fixed by CIT(A) which has led to the passing of ex-parte order. Ld. AR further submitted that the assessee is ready and willing to make representation before CIT(A) if an opportunity is given and prays that the present matter should be remanded to the file of CIT(A) for a proper adjudication of the grounds/issues raised by assessee in first-appeal. Ld. DR for revenue agreed with the prayer of Ld. AR but made a request to direct the assessee to represent his case before CIT(A) and do not seek unnecessary adjournments.
Considering above submissions and also having regard to the principle of natural justice and fair play, we deem it fit to remand this matter back to the file of CIT(A) for adjudication afresh. The CIT(A) shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to ensure participation in the hearings as may be fixed by CIT(A) and do not seek unnecessary adjournments failing which the CIT(A) shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 07.10.2024
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