Opportunity of Being Heard Must be Provided: ITAT Remits Ex-Parte Order to AO [Read Order]

The New Delhi bench of Income Tax Appellate Tribunal (ITAT) has remitted the case of the Assessee back to the file of the Assessing Officer to decide the matter afresh after giving to the assessee an adequate opportunity of being heard.

The assessee filed an appeal against the order of Commissioner of Income Tax (Appeals)/ National Faceless Assessment Centre (NFAC), Delhi dated 05.09.2023 relating to assessment year 2017-18.

The assessee filed his return of income on 31.03.2018 declaring a total income of Rs.2,85,200. The return was later picked up for a limited scrutiny under Computer Assisted Scrutiny Selection (CASS) to examine the source of cash deposit during the year. Accordingly, notices under Section 143(2) and 142(1) of the Income Tax Act,1961 were sent by the Assessing Officer (AO).

Read more: Absence of Notice cannot be Cured by Invoking S. 292BB of Income Tax Act: Delhi High Court

Since there was response from the assessee, the Assessing Officer invoked the provisions of best judgment assessment and brought to tax the amount of cash deposit of Rs. 84,61,500 made during the year as unexplained income of the assessee under Section 69A of the Income Tax Act, 1961. Thereafter, an appeal was preferred before the Commissioner of Income Tax (Appeals) [CIT (A)] which also stood dismissed. Hence, the present appeal was filed by the assessee. 

Read more: Failure to Serve Notice for Personal Hearing invalidates the Order Confirming Demand u/s 73(2) of the Finance Act: Telangana HC

Counsel for the assessee, Ankit Gupta, urged that the NFAC has erred in dismissing the appeal of the assessee without providing an adequate opportunity of being heard and deciding the appeal in an ex-parte manner without appreciating the material available on record. It was his contention that no notice of hearing had been received as the e-mail address given was wrong. He therefore prayed that an opportunity may be given before the income tax authorities to make a proper representation in support of his appeal.

Departmental Representative, Sahil Kumar Bansal, also did not have any objection to the proposition made by the counsel for the assessee.

Stay Updated with the Latest Audit Report Formats & Audit Trials Requirements! Click here

The bench comprising Shamim Yahya (Accountant member) and Sudhir Pareek (Judicial member), on a consideration of the facts and circumstances of the case and in the interest of justice remitted the issues in dispute back to the file of the Assessing Officer (AO) with directions to decide the same afresh after giving adequate opportunity of being heard to the assessee.

Hence, the appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates