What did the Tribunal hold?

The Tribunal found that the notices for assessment were served after the fixed dates, indicating a lack of proper opportunity for the assessees. Consequently, the assessment orders were set aside.

The Assessing Officer framed ex-parte assessments under Section 144 of the Income Tax Act for the assessment year 2003-04. The assessees contended that they were not afforded sufficient opportunity of being heard.

What were the issues?

Whether the ex-parte assessment order passed under Section 144 was valid when the assessee was not provided with a reasonable opportunity of being heard.

Anuradha K. Kamath vs ACIT | ITAT Mumbai 2016

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

For Appellant: Shri Hardik Mistry, AR

For Respondent: Shri K. Mohandas, DR

O R D E R PER MAHAVIR SINGH, JM: These appeals by the two different assessees are arising out of the common order of the CIT (A)-30, Mumbai passed in appeal No. CIT (A)-30/ACIT 19(2)344/2014-15 and No.CIT (A)-30/ACIT19 (1)/343/2014-15 dated 27-03-2015. In both the cases, assessments were framed by the ACIT, Circle-16(2), Mumbai for assessment year 2003- 04 vide his order dated 17-03-2006 passed u/s 144 of the Income Tax Act, 1961 (hereinafter referred to as the (“Act”).

At the outset, it is noticed that the assessee has raised common grounds in both these appeals regarding framing of assessment u/s 144 of the Act i.e. ex-parte

2 3735/Mum/2015 assessment and completing the same without affording opportunity of being heard to the assessee. In both the appeals grounds raised are identically worded, hence, the grounds raised in one of the appeals are reproduced herein below:- “1) The learned Assessing Officer [The Asst. Commissioner of Income Tax, range 19(2) (2), Mumbai] has erred in completing the assessment u/s 144 of the Income Tax Act without affording the sufficient opportunity of being heard to the appellant and Learned Commissioner of Income Tax (Appeals) – 30 has further erred in upholding the order of the Assessing Officer”.

3. At the outset, it is noticed that the assessment framed by the AO is u/s 144 of the Act and that also ex-parte based on the materials available on record, without providing reasonable opportunity of being heard to the assessee. I have found from the very order of the CIT (A) that it is clear that notice was served on the assessee on 09-12-2004 fixing the appeal on 25-11-2004 and another notice served on 28-02-2006 fixing the date for assessment on 24-02-2006. It means the service of the notice is after the date fixed. It means that there is no proper opportunity of being heard. The learned Counsel for the assessee argued for setting aside the assessment and remitting the matter back to the AO in both the cases. The learned DR fairly admitted that the matter may be sent back to the AO.

In view of the above, I set aside the orders of the authorities below and restore the matter back to the file of the AO for framing fresh assessment after allowing reasonable opportunity of being heard to the assessee. Both the appeals of the assessee are allowed for statistical purposes.

ANURADHA K. KAMATH,MUMBAI vs. ACIT RG. 19(1),[EARLIER ACIT, RG. 16(2)], MUMBAI

What did the Tribunal hold?

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