What did the Tribunal hold?

The Tribunal held that the CIT(A) order was passed in violation of the principles of natural justice. Therefore, the impugned order was set aside to provide the assessee a reasonable opportunity of being heard.

The assessee's appeal was decided ex-parte by the CIT(A) despite an adjournment application being filed and the case being fixed for a later date. The CIT(A) passed the order before the adjourned date without hearing the assessee.

What were the issues?

Whether the CIT(A) order passed ex-parte without affording a proper hearing violates the principles of natural justice.

Nivo Controls P. Ltd vs ITO | ITAT Mumbai 2016

Income Tax Appellate Tribunal, MUMBAI BENCHES “B”, MUMBAI

Before: SHRI B.R.BASKARAN (AM) & SHRI RAM LAL NEGI (JM)

For Appellant: Shri. Mihir Naniwadekar

For Respondent: Shri. Durga Dutt

Hearing: 13/06/2016Pronounced: 15/06/2016

This appeal has been preferred by the assessee against order dated 22/04/2013 passed by the Ld CIT(Appeals)-20, Mumbai for the assessment year 2009-10. 2. The assessee has challenged the impugned order on following effective grounds of appeal:- “On the facts and in the circumstances of the case and in law:

The learned CIT(A) erred in passing an ex-parte order, stating that none was present for the Appellant on 17.4.2013, when the Appellant had already been granted an adjournment and case was fixed for 23.4.2013. Hence, the order of the learned CIT (A) dated 22.4.2013 is liable to be set aside for total failure of natural Justice.

Without prejudice to ground No 1, the learned CIT (A) erred in confirming disallowance of interest of Rs 1,732/– for late payment of TDS, without appreciating that the interest is not at all penal in nature, and the interest was correctly claimed by the appellant.

3. Without prejudice to ground No 1, the learned CIT(A) erred in confirming disallowance of 10% of travel references (amounting to Rs 246,267) without appreciating that the expenses were properly claimed. The lower authorities had failed to give proper opportunity to the appellant to substantiate the same.

4. The order of learned Commissioner of income tax (Appeals) is against the weight of evidence, equity and natural Justice.”

At the outset, the Ld. Authorised Representative (AR) for the assessee submitted that since the impugned order has been passed by the Ld CIT(A) without hearing the appellant/assessee, the same is bad in law and liable to be set aside. To substantiate his contention, the Ld. AR placed on record photocopy of application dated 16th April 2013 submitted by the assessee for a short adjournment. This fact was also brought to the notice of the Ld. DR.

We have perused the record in the light of the contention of the Ld.AR. We find that this case was fixed for hearing before the Ld. CIT(A) for 17.04.2013. The assessee made an application on 16.04.2013 for a short adjournment on the ground that his counsel would be unable to attend the hearing due to his ill health on 17.04.2013. The copy of application contains seal impression dated 16.04.2013 and endorsement as “Case is fixed on 23/4/13”. From the seal impression and the endorsement aforesaid in can safely be inferred that the case was adjourned to 23.04.2013 as requested by the assessee. However, the impugned order was passed on 22.04.2013. We fail to understand, why the impugned order was passed on 22.04.2013, when the case was fixed for 23.04.2013 that too without giving notice to the assessee.

So in our considered view, in the interest of justice and fair play, the assessee should be given a reasonable opportunity to contest its case. We, therefore set aside the impugned order, passed by the Ld. CIT (A) in violation of principle of natural justice audi alterm partem, and restore the matter back to the Ld. CIT(A) for deciding the appeal of the assessee afresh after affording a reasonable opportunity of being heard to the appellant/ assessee.

In the result, the appeal filed by the assessee is allowed for the statistical purposes. Order pronounced in the open court on 15th. June, 2016

NIVO CONTROLS P. LTD,MUMBAI vs. ITO 1(2)(3), MUMBAI

What did the Tribunal hold?

What were the facts?

What were the issues?

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