ITAT’s Reasonless Rejection of Second Adjournment Leads to Ex-Parte Order Being Quashed by Allahabad HC [Read Order]
The Court ruled that the assessee’s right to a fair hearing had been prejudiced
The Allahabad High Court quashed the ex-parte order passed by the Income Tax Appellate Tribunal (ITAT), Agra Bench, noting that the Tribunal had rejected the assessee’s second adjournment request without assigning any reasons. The Court held that such a reasonless denial amounted to a violation of the principles of natural justice.
The appeal was filed by Ashok Kumar Agarwal against the ITAT order passed in two Revenue appeals relating to A.Y. 2015-16. The Revenue had challenged the order of the CIT(A) dated 14.11.2024, and the ITAT listed the matter on only two occasions. On the second listing, the assessee sought an adjournment, but the Tribunal proceeded to decide both appeals ex-parte, allowing the Revenue’s case. The High Court noted that although the ITAT acknowledged receipt of the adjournment application, it neither passed any order on it nor recorded any reasons for rejecting it.
Arguing for the appellant, Rahul Agarwal and Rishab Kachhawah contended that the ITAT upheld the DVO’s valuation without considering or dealing with the CIT(A)’s specific findings that the land in question was not agricultural land in 1981.
The Division Bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla held that while expeditious disposal of appeals is desirable, judicial bodies must ensure adherence to the principles of natural justice, including granting reasonable opportunity of hearing. The Bench reasoned that the ITAT, being the final fact-finding authority, must pass a reasoned order before the High Court can consider any substantial question of law.
Given the absence of reasoning for rejecting the adjournment request and the prejudice caused to the assessee, the Court found the Tribunal’s approach unacceptable. Consequently, the Court set aside the ITAT’s order and directed the Tribunal to issue fresh notice, hear both parties, and pass a reasoned order within six months.
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