MUHAMMADSABIR ABDULKARIM KATPICEWALA,SURAT vs. INCOME TAX OFFICER, WARD 2(2)(3), SURAT, SURAT

Since the facts in both the appeals are common and these appeals, relate to same assessment year i.e., 2010-11, therefore, -489/SRT/2023/AY.10-11 Muhammadsabir A Katpicewala both these appeals were clubbed, heard together and a consolidated order is being passed to avoid the conflicting decisions.

At the outset Learned Counsel for the assessee submitted before the Bench that during appellate proceedings before NFAC/Ld. CIT(A) assessee took adjournment and participated in appellate proceedings. The assessee was in the processing of collecting information, however, in the meantime, NFAC/Ld. CIT(A) has passed impugned ex parte order. Therefore, Ld. Counsel prays the Bench that another opportunity should be granted to the assessee to plead his case before the Assessing Officer. The Ld. Counsel also pointed out that since both these appeals were decided by NFAC/Ld. CIT(A) ex parte, therefore both these appeals may be remitted back to the file of the Assessing Officer for fresh adjudication.

On the other hand, Learned Senior-DR for the Revenue raised objection that assessee was grossly negligent in his approach. The assessee has not explained reasonable cause for non-appearance before NFAC/Ld CIT(A), therefore both the appeals may be dismissed.

We have heard both the parties. We note that order passed by NFAC/Ld. CIT(A) is an ex parte order without considering the assessee’s submission on merit. We also note that order passed by the Assessing Officer u/s 144 of the Act, therefore, Assessing Officer has not examined the basic facts of the assessee’s case, hence we are of the view that matter may be remitted back to the file of the Assessing Officer for de novo assessment. We note that -489/SRT/2023/AY.10-11 Muhammadsabir A Katpicewala it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Accordingly, we restore the issue back to the file of the assessing officer for considering of the issue afresh after providing due opportunity of hearing to the assessee in accordance with law. Needless to mention, the assessee shall cooperate in the proceedings before the lower authorities for disposal of these cases. For statistical purposes, the appeal of the assessee is treated as allowed.

In the result, assessee’s appeal is allowed for statistical purposes.

Now coming to considering the fact that additions made in the quantum assessment has been restored back to the file of Assessing Officer, therefore at this stage, the penalty levied by Assessing Officer u/s 271(1)(c) vide order dated 11.05.2018 will not survive. Hence, the appeal of assessee is allowed, however, the Assessing Officer shall be at liberty to initiate fresh action, if so, require at the time of passing the de novo assessment order.

In the result, assessee’s appeal is allowed.

In combine result, assessee’s appeal ITA -489/SRT/2023/AY.10-11 Muhammadsabir A Katpicewala No.489/SRT/2023 is allowed. A copy of this order be placed in the respective case file(s).