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Facts
Following a search operation in the Alankit Group of cases, incriminating material was seized, leading to the initiation of proceedings against the assessee under Section 153C of the Income Tax Act. The assessee's appeal before the CIT(A) was dismissed ex-parte.
Held
The Tribunal held that the assessee was not provided with a proper opportunity of being heard by the CIT(A), which constituted a violation of the principles of natural justice. The appeal was therefore set aside.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without providing adequate opportunity of being heard to the assessee, thereby violating principles of natural justice.
Sections Cited
153C, 250, 254(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE & SHRI AVDHESH KUMAR MISHRA
A.Y. 2018-19 A.Y. 2019-20 ITA No.6862/DEL/2025, A.Y. 2020-21 Chharia Holding Pvt. Ltd. Assistant Commissioner of 206-207, Ansal Satyam, Income Tax, RDC, Rajnagar, Vs. Central Circle-28, Ghaziabad ARA Building, PAN: AABCS9020J Jhandewala Extn., New Delhi (Appellant) (Respondent) Appellant by Shri Akhilesh Kumar, AR Respondent by Shri Om Prakash, Sr. DR Date of Hearing 07/11/2025 Date of Pronouncement 07/11/2025 ORDER PER AVDHESH KUMAR MISHRA, AM
Common facts and similar grounds arise in the above captioned appeals of the assessee; therefore, these appeals were heard together and are being disposed off by this common order.
2. These appeals for Assessment Years (‘AYs’) 2014-15, 2015-16, 2016- 17, 2017-18, 2018-19, 2019-20 and 2020-21 filed by the assessee are -62/Del/2025 Chharia Holding Pvt. Ltd. directed against orders dated 27.10.2025 passed by the Principal Commissioner of Income Tax (Appeals)-25, New Delhi [‘CIT(A)’].
The assessee has raised similar grounds in all appeals. The for AY 2014-15 is taken as a lead case. Its grounds read as under: - “1. Because, order of ld. CIT(Appeals) is bad in law and against the facts and circumstances of the case.
Because, ld. CIT (Appeals) inherently wrong in dismissing the appeal ex- party without providing any proper opportunity of being heard, whereby adjournment sought for sought with valid reason, being counsel could not prepare the matter being busy in time barring tax matters.
3. Because, ld. CIT (Appeals) erred in not appreciating the fact that assessee complied with all the notices, and effectively three notices are issued within 35 days in September/October,25 when there was huge pressure of time barring Audit/ITR whereby several courts passed orders to extend limitation and CBDT itself extended time, thus adjournment is unreasonably rejected and ex-party order is against the rules of natural justice.
Because, ld. CIT (Appeals) further erred in dismissing all the legal/factual grounds summarily and unilaterally without examining case records and/or raising any specific query on any issue thus order is contrary to provisions of section 250 of Act.”
ITA No. 6856/Del/2025:
4. The relevant facts giving rise to this appeal is that the assessee filed its original Income Tax Return (‘ITR’) of AY 2014-15 on 14.09.2014, declaring income of Rs.4,44,140/-. The Alankit Group of cases were searched on 18.10.2019. During the search operations in Alankit Group of cases, certain -62/Del/2025 Chharia Holding Pvt. Ltd. incriminating material were seized, which led to believe that the assessee had received certain accommodation entries in the garb of bogus Short-Term Capital Losses to get set off of the Long-Term Capital Gains. Based on those incriminating material, proceedings under section 153C of the Income Tax Act, 1961 (‘Act’) were initiated in the case of the assessee for various years. Consequently, the assessment of AY 2014-15 was completed at Rs.8,83,995/-, wherein the interest paid on bogus loan taken earlier was disallowed and added back in the returned income. Aggrieved the assessee filed appeal before the Ld. CIT(A) who, vide impugned order, dismissed the appeal.
Before us, the Ld. Authorized Representative (‘AR’) prayed for remitting the matter back to the Ld. CIT(A) because proper opportunity of being heard was not provided to the assessee and thus, there was violation of principle of natural justice. In this regard, he drew our attention to various grounds raising the issue that the impugned order had been passed in violation of principle of natural justice. Further, he drew our attention to para 7 of the impugned order which reads as under: - “7. The case was transferred to this unit in October, 2024. During the course of appellate proceedings, various notices u/s 250 of the Act were issued to the appellant. It may be pertinent to mention that throughout the appellate proceedings, the appellant has been non-compliant or at best, seeking adjournments in response to notices issued u/s 250 of the Act for furnishing details/documents/evidence/clarification in respect of the appeal filed by it. For better appreciation of the above, the table below -62/Del/2025 Chharia Holding Pvt. Ltd. depicts the dates of compliance stipulated and the responses of the appellant: S. No. Date of Date of Hearing/ Remarks/ response of appellant Notice/ Letter Compliance 1. 08.04.2025 15.04.2025 Adjournment sought on ground that documents such as satisfaction note etc. bad been sought under RTI Act on 30.12.2024 and appeal under RTI Act filed thereafter which was pending. 2. 03.09.2025 11.09.2025 Adjournment sought on ground that- "...few documents are pending to be received which are necessary for appeal. Hence it is prayed to allow more time to file submission..." 3. 19.09.2025 26.09.2025 adjournment sought for 15 days on ground that-“...some document which are necessary for submission are pending to be received from earlier counsel, further AR being busy in time barring tax matters/returns... 4. 07.10.2025 14.10.2025 Adjournment sought on ground that documents required for submission received and time barring date of tax matters.
Referring to the above table, the Ld. AR submitted that the assessee had sought adjournments on specific reasons; however, neither the same was rejected nor the assessee was ever informed about that. The reason for adjournment, prima-facie, was justified. He further submitted that the entire process of appellate proceedings was completed within effective hearing of one month only. When the first notice was received by the assessee in April, -62/Del/2025 Chharia Holding Pvt. Ltd. 2025, the assessee filed RTI application before the Ld. Assessing Officer (‘AO’) for making available various documents details as mentioned in the remark column of the above table. However, the same was not made available for a long time. Thereafter, the adjournment was sought on the assessee’s counsel engagement in time barring and audit matter. There was justification on the part of the assessee. However, the sufficient time was not allowed. Thereafter, the appeal was dismissed summarily. Therefore, the Ld. AR prayed for remitting the matter back to the Ld. CIT(A) for fresh adjudication.
On the other hand, the Ld. Sr. Departmental Representative (‘Sr. DR’) contended that he was not competent to argue search cases as per work assignment order amongst the CIT-DR and Sr. DR. He therefore, prayed for time. However, on specific query that what the grievance Revenue would have when the assessment was being remanded back to the ld. CIT(A) for fresh adjudication, the Ld. Sr. DR did not have satisfactory reply.
On perusal of the appeal folder, we find that proper opportunity of being heard was not provided to the assessee before disposing of the said appeal though there were reasonable causes for seeking adjournments on the part of the assessee. Keeping in view the power in section 254(1) of the Act, we are of the considered opinion that the case is not required to be heard on merit as the assessee has raised any such effective ground and the assessee has not been provided proper opportunity of being heard before the first appellate authority. Without offering any comment on merit of the case, -62/Del/2025 Chharia Holding Pvt. Ltd. we deem it fit to set aside the impugned order and remit the matter back to the file of the Ld. CIT(A) for deciding the case afresh, in accordance with law, after providing adequate opportunity of being heard to the appellant assessee. Ordered accordingly. The appellant assessee, no doubt, shall cooperate in remitted appellate proceedings. ITA No. 6857-6662/Del/2025:
The above finding shall apply mutatis mutandis for the above captioned appeals of AYs 2015-16, 2016-17, 2017-18, 2018-19, 2019-20 and 2020-21 of the assessee.
In the result, all appeals of the assessee are allowed for statistical purposes.
Order pronounced in open Court on 07 November, 2025