NFAC cannot Adjudicate Appeals already Disposed of by CIT(A): ITAT direct Department to Pay Cost [Read Order]

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has held that National Faceless Appellate Center (NFAC) could not adjudicate appeals already disposed of by Commissioner of Income Tax (Appeals)[CIT(A)].  Therefore, the bench directed the department to pay the cost.

The assessee Karnataka Sangha, filed the appeal against the order of CIT(A) dismissing the appeal of the assessee in an Ex-parte proceedings.

The facts leading to the appeal was, against the addition made in assessment order passed under Section 143(3) of the Income Tax Act for the assessment year 2013-14, the assessee had filed an appeal before the CIT(A)-7. The said appeal of the assessee for the Assessment Year 2013-14 was allowed by the CIT(A).

Thereafter, the CIT(A) has erred in again taking up the appeal that was already decided and passed a second order in an ex-parte proceedings.

Bhupendra Shah, the counsel for the assessee submitted that once the appeal of the assessee for the Assessment Year 2013-14 has been decided by the CIT(A) -7, there was no occasion for the CIT(A) to pass the second order in the same appeal.

Hence, it was due to the negligence of the Department that the assessee was forced into litigation and pay Rs.10,000/- towards filing fee of an appeal before the Tribunal, apart from engaging a counsel.

Shambhu Yadav representing the department submitted that the confusion occurred for the reason that the first appeal was decided in physical mode, subsequently, Faceless System was introduced for deciding the appeals and the second order in the case of assessee for Assessment Year 2013-14 was passed in faceless regime.

The two-member bench of Vikas Awasthy (Judicial Member) and Gagan Goyal (Accountant Member) after considering the submission of the both parties observed that “appeal to the assessee for Assessment Year 2013-14 was adjudicated by the CIT(A) -7 vide order dated 22/01/2018 the same appeal of the assessee was again taken up for adjudication in faceless mode by National Faceless Appeal Centre and was decided in an ex-parte proceedings against the assessee.”

Thus, it is an absolute slackness on the part of the department to fix an appeal for hearing that had already been disposed of.

Therefore, the bench directed the department to pay cost Rs.10,000/- i.e. equivalent to the fee paid by the assessee for filing appeal before the Tribunal

To Read the full text of the Order CLICK HERE

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