Right to Appeal against Addition or Disallowance to Returned Income not Vitiated by Non-Compliance to Notices: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held that right to appeal against addition or disallowance to returned income not vitiated by non -compliance to notices.

The aforesaid observation was made by the Tribunal when an appeal was filed before it by the assessee, as against the order of the ld. CIT(A)-11, New Delhi dated 29 .03.2019.

The assessee having filed the return of income on 31.10.2015 declaring an income of Rs. Nil which had been revised to total loss of Rs.18,63,53,504/-, the assessment was completed determining the total income at (-) Rs.10,12,00,961/. And on account of disallowance u/s 43B and addition u/s 68 of the Income Tax Act, 1961, the assessee had filed an appeal before the ld. CIT(A).

However, owing to the continued non-appearance of the assessee, the lCIT(A) had summarily dismissed the appeal of the assessee, thus confirming the order of the Assessing Officer, leaving the assessee with the only option to file appeal before the Tribunal.

“We observe that there is no effect on payment of tax by the assessee as the assessed returned income culminated in loss of Rs.10.12 Crores. This only leads to conclusion that the assessee is aggrieved with the additions on a basis of principle and future effect of carry forward of losses”, the Tribunal commented.

“The assessee has failed to appear on 6 occasions before the ld. CIT(A) and has taken up the grounds before the Tribunal pertaining to legal principles of “audi alteram partem” and sustenance of order of the AO by the ld. CIT(A) on “ex-parte” basis.”, the Bench further added.

Thus, marking its observation, while allowing the assessee’s appeal, the Tribunal ruled:

“We strongly believe that every assessee has a right to appeal before the authorities against any addition or disallowance made to the returned income, at the same time, it is least expected that the assessee would comply to the notices issued by the authorities in an appropriate way. Hence, we hereby direct the assessee to pay an amount of Rs.10 ,000/- to the “Prime Minister’s National Relie f Fund” and approach the ld. CIT(A) for a fresh hearing denovo which shall be considered. The ld. CIT(A) is hereby directed to afford an opportunity of being heard to the assessee before conclusion of the proceedings.”

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