The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) has rejected the order passed in absentia/ ex-parte, which did not provide the assessee an opportunity for a hearing during the COVID-19 pandemic.
Karalam Service Cooperative Bank Ltd, the taxpayer in question, lodged an appeal against the decision made by the Commissioner of Income Tax (Appeals) [CIT(A)]. The assessee contended that the CIT(A) had dismissed their appeal without adequately granting them an opportunity to present their case.
Subsequently, the Assessing Officer (AO) passed an order under Section 154 read with Section 200A of the Income Tax Act on 27.01.2016, raising a total demand of Rs.7500/- (Rs.6200/- on account of late filing fee under Section 234E and Rs.1300/- as Interest under Section 220(2) of the Income Tax Act thereon).
Aggrieved by the order, the assessee filed an appeal before the CIT(A), who dismissed the appeal of the assessee. Therefore, the assessee filed a second appeal before the tribunal.
Amaljith P. J, the Counsel for the assessee submitted that initially the appeal against the action of the AO was filed before the CIT(A), Thrissur and the appeals were fixed for hearing on 10.12.2019 wherein the assessee had filed all the relevant documents before him.
During the covid pandemic, the assessee received notices for hearing but he could not appear before the CIT(A) due to covid restrictions. Therefore, the assessee did not receive any notice from the department for hearing.
J. M Jamuna Devi, counsel for the revenue, supported the decision of the lower authorities.
The tribunal observed that the CIT(A) passed an ex parte order on account of failure to respond to the notice issued by the department.
Further, the assessee appeared before CIT(A) on 10.12.2019 and filed relevant documents/PB whereas on 11.03.2020 and 26.01.2021 due to restrictions clamped down [Covid-19 Pandemic] it could not appear, and it was not allowed.
The Tribunal noted that according to subsection (6) of Section 250 of the Income Tax Act, the order issued by the CIT(A) must provide reasoning for the decision made on each raised issue.
Therefore, the two member bench of Sanjay Arora (Accountant Member) and Aby T. Varkey (Judicial Member) set aside the exparte order passed by the CIT(A) and directed the CIT(A) to dispose of the appeal as per sub-section (6) of section 250 of the Income Tax Act and the assessee was directed to be diligent and appear/file written submissions/paper book as per law.
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