ITAT sets aside Ex-Parte Order of CIT(A) for Fresh Hearing, upholds Principles of Natural Justice [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the principles of natural justice by setting aside the ex-parte order issued by the Commissioner of Income Tax (Appeals) [CIT(A)].

Bhupendra Kumar Phoolchand Bind,the appellant-assessee, filed his return of income for the assessment year (AY)2017-18, reporting a total income of ₹4,00,820. Notices under sections 143(2) and 142(1) were issued through the Income Tax Business Application (ITBA), but the assessee did not respond adequately. This led the Assessing Officer (AO) to complete a best judgment assessment under section 144, resulting in an addition of ₹5,70,243 to the total income.

The assessee subsequently challenged this decision before the CIT(A), but the appeal was dismissed ex parte due to non-compliance with the notices that requested documentation and explanations.

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 The appellant raised several grounds of appeal, asserting that the CIT(A) erred in confirming the addition under section 69A, claiming that this section did not apply to cash deposits linked to his money transfer business. He also contended that the CIT(A) failed to provide a fair hearing and that the penalties invoked were unjustified.

During the proceedings before the ITAT, the assessee’s representative argued that the CIT(A) had not given an effective opportunity for the assessee to present his case, leading to a miscarriage of justice.

The tribunal observed that while the CIT(A) had issued multiple notices for document submission via ITBA, the appeal had been dismissed without adequately considering any explanations or evidence from the appellant.

The bench determined that the order from the CIT(A) was ex parte and lacked a reasoned basis, thus violating the principles of natural justice.

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The two member bench comprising Raj Kumar Chauhan(Judicial Member) and Prashant Maharshi(Accountant Member)set aside the impugned order and restored the matter to the CIT(A) for a fresh hearing, instructing that the appellant be allowed to present his case within 60 days of the order date.

As a result, the appeal was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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