ITAT Orders Fresh Appeal Hearing for Assessee, Cites Denial of Proper Opportunity by CIT(A) [Read Order]

In a recent order, the Income Tax Appellate Tribunal (ITAT), Patna Bench, has allowed a fresh appeal hearing for an assessee after observing that the Commissioner of Income Tax (Appeals) ,CIT(A) failed to provide a fair opportunity of being heard.

Shankar Prasad, a resident of Bihar’s Nalanda district, had not filed his return of income for the relevant year. The Assessing Officer initiated proceedings under Section 147 read with Section 148A of the Income Tax Act after receiving information that the assessee had withdrawn cash amounting to Rs.1.37 crore from a current account held with Canara Bank.

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Following this, the assessee filed his return disclosing total income of Rs.1,04,090 after a delay of nearly eleven months. However, due to the assessee’s failure to respond to statutory notices issued under Section 142(1), the assessment was completed based on material on record. Additions were made under Section 68 as unexplained cash credit and under disallowances mentioned in the assessment order, bringing the total assessed income to Rs.8,60,862.

Aggrieved, the assessee filed an appeal before the CIT(A). However, the CIT(A) dismissed the appeal citing non-appearance on three consecutive dates, and upheld the assessment order without evaluating the merits of the case. The assessee then moved the ITAT arguing that the dismissal without fair hearing violated principles of natural justice and Section 250(6) of the Income Tax Act.

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The assessee’s counsel submitted that proper opportunity was not granted and requested a fresh chance to present the case. The Departmental Representative opposed the plea, stating that ample opportunities were already given which the assessee failed to utilise. After considering both arguments, the ITAT held that the CIT(A) had decided the matter without examining the merits and failed to pass a reasoned order as mandated by law.

The Tribunal, therefore, set aside the CIT(A)'s order and remanded the matter back for fresh adjudication, directing the appellate authority to provide reasonable opportunity to the assessee to be heard and to pass a speaking order. The assessee was also directed to cooperate fully in the proceedings.

The order was passed by a bench comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishra (Accountant Member).

To Read the full text of the Order CLICK HERE

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