Extended Gap due to Covid 19 Pandemic led to Inability to Track Hearing Notice: ITAT remands case to CIT (A) for Fresh Adjudication [Read Order]

In a recent ruling, the Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has remanded the case to the Commissioner of Income Tax (Appeal) (CIT (A) for fresh adjudication, noting that the CIT (A) issued a notice to the assessee for the first time after a gap of almost four years. This delay can be attributed to the Covid-19 pandemic, which reasonably explained the delay.

The assessee, Meghana Satish Shetty had been served with multiple notices informing them of hearing dates before the CIT-A, yet there was no compliance. Due to the lack of cooperation from the assessee, the CIT-A upheld the order of the Assessing Officer.

Mr. Varun Bhat, representing the assessee, highlighted that this case was in its second round of litigation before the CIT-A, following directions from the ITAT’s order dated 13 September 2019. The CIT-A issued a notice to the assessee for the first time on 16 October 2023, after a lapse of nearly four years. According to Mr. Bhat, the extended gap had caused the assessee difficulty in tracking the notices from the CIT-A.

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Further, argued that the assessee, being illiterate, struggles to respond to notices from the revenue authorities and requested that the matter be heard on merit. He asserted that the assessee has a strong case and should not be required to restart proceedings before the CIT-A.

Conversely, Mr. Subramanian, representing the revenue, contended that the assessee had shown a lack of vigilance in pursuing the matter and suggested dismissal of the appeal. He argued that the assessee has no substantive case and is intentionally avoiding responding to notices even in this second round of litigation. Additionally, argued that the matter should not be heard on merit by the ITAT, as the assessee had not appealed directly before the CIT-A. Instead, he recommended that the case be remanded to the CIT-A for fresh adjudication.

After considering both parties’ arguments and reviewing the available records, it was noted that the assessee had been negligent in pursuing the appeal. This is the second round of litigation before the ITAT, which previously remanded the issue to the CIT-A on 13 September 2019 for fresh adjudication. Although the CIT-A issued a notice to the assessee for the first time after a gap of almost four years, this delay can be attributed to the Covid-19 pandemic, which reasonably explained the delay.

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In the interest of justice and fairness, the two-member bench of the tribunal, comprising Yogesh Kumar U.S (Judicial Member) and Waseem Ahmed (Accountant Member), decided to grant the assessee one additional opportunity to present their case before the CIT-A with supporting materials. The bench also instructed the assessee to cooperate fully during the proceedings and not seek adjournments without valid reasons. Consequently, the ITAT remanded the issue to the CIT-A for fresh adjudication in accordance with legal provisions. The appeal was thus allowed for statistical purposes.

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