CIT(A) issues 5 Income Tax Notices within 40 days, Fails to Consider Facts filed in Form 35: ITAT directs Fresh Adjudication [Read Order]

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) directed fresh adjudication after finding that the Commissioner of Income Tax (Appeals) [CIT(A)] had issued five notices within 40 days for assessment year (AY) 2017-18 without considering the facts filed in Form 35.

Prakruthi Mahila Credit Society,the appellant-assessee, had filed an appeal for the AY 2017-18 against the order dated 24/05/2024 passed by the National Faceless Assessment Centre ( NFAC ).

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The CIT(A) issued five hearing notices to the assessee, who did not respond. The appeal was dismissed, confirming the Assessing Officer ( AO )'s order, and  cited the Gujarat High Court case PCIT vs. Ashokji Chanduji Takor while dismissing the appeal.

The assessee stated that they could not appear during the proceedings. The authoritative representative ( AR ) noted that although the appeal was filed on 6/9/2022, the first notice from the CIT(A) was sent 18 months later, on 1/4/2024.

The CIT(A) then issued four more notices within 30 days, making the time between notices insufficient. The AR argued that effectively only one notice was issued and requested one more opportunity for the assessee.

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The tribunal heard the rival contentions and reviewed the records. It noted that the CIT(A) issued the first notice about 18 months after the appeal was filed. Subsequent notices were sent within a short period. The tribunal believed that the CIT(A) should have allowed a reasonable gap between the notices

The bench noted that under section 250(6) of the Act, the CIT(A) was required to pass an order with reasons after considering the dispute. However, the CIT(A) dismissed the appeal without referring to the statement of facts filed by the assessee with Form 35.

The appellate tribunal noted that, unlike the Ashokji Chanduji Takor case, where sufficient opportunities were given, the CIT(A) issued five notices within 40 days in this case, which was deemed unreasonable and found that the assessee was not given adequate time to respond.

The two-member bench comprising Prakash Chand Yadav ( Judicial Member ) and Waseem Ahmed ( Accountant Member ) allowed the appeal of the assessee and restored the issue to the AO for fresh adjudication.

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