ITAT quashes Non-Speaking Ex-Parte Appellate Order, directs de novo Income Tax Assessment [Read Order]

The Lucknow Bench of Income Tax Appellate Tribunal (ITAT), has set aside Ex-Parte Assessment and Appellate orders for three Income Tax Assessment years, filed by the Assessee with the intention of directing the Assessing Officer to pass Fresh Adjudication in terms of providing Reasonable opportunity of hearing to the Assessee.

The Two- Bench member consisting of Kul Bharat, Vice President and , Accountant member, heard these appeals filed by Arshad Mahmood Khan, the Assessee, for Assessment years 2013-14, 2015-16 and 2016-17 against the appellate orders dated 10/10/2024 passed by the Commissioner of Income tax [CIT(A)].

The Assessing Officer passed an assessment order dated 22/03/2022 under section 144 read with section 147 of the Income Tax Act, 1961 wherein the income of the assessee was assessed at Rs.80,93,335/- and Rs.1,75,94,441/- and Rs.3,09,16,952/- respectively for three assessment years against the returned income at nil by the assessee. Consequently, the assessment order was passed by the Assessing Officer and the Appellate order was passed by CIT(A), as Ex-Parte against the Assessee.

During the hearing, Sandeep Saxena, Advocate and Anurag Kumar Saxena, Advocate, who appeared on behalf of the Assessee, submitted to the bench that the Assessing Officer and CIT(A) passed their respective orders without providing reasonable opportunity of hearing to the Assessee and further, contended that CIT(A) did not pass speaking order on merits of the various grounds of appeal, thus, violating the principle of Natural Justice entirely. Eventually, it was contended that the issues in the dispute should be restored to the file of the Assessing Officer, directing to pass De Novo Assessment orders in accordance with law after providing reasonable opportunity of hearing and valuing this principle to the assessee.

In response to the Appellant, Sunil Kumar Rajwanshi, Additional Commissioner of Income Tax (Addt. CIT) and Departmental Representative, who appeared on the behalf of Revenue, raised no objection to the submissions and contentions of the Appellant and left the matter at the Discretion of the Bench.

After hearing and considering the submissions made by both the parties, and reviewing the available material on record, the bench considered the section 250(6) of the Income Tax Act, 1961, wherein CIT(A) has a statutory duty to pass speaking order on merits of the various grounds of appeal, which in this case was not fulfilled.

Consequently, with further consideration in regards to the submissions made by both the parties, the bench set aside the order passed by CIT(A). The issues in dispute regarding the assessment orders for all three assessment years were restored back to the file of the Assessing Officer. Further, directing the Assessing Officer to pass De Novo Assessment order in accordance with the law after providing reasonable opportunity of hearing to the assessee.

Furthermore, the bench allowed all the three appeals filed by the assessee for Statistical Purposes. Therefore, the order for the same was pronounced in open court on 11/02/2025.

Thus, the assessee now, has the opportunity to present their case during fresh assessment proceedings, in consonance with principles of natural justice.

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