Non-Compliance to Income Tax Notice Not Deliberate: ITAT Remands Matter to CIT(A) [Read Order]

Maa Harsiddhi Infra Developers Private Limited (assessee), a company filed an appeal before the CIT(A) against the assessment order. The CIT(A) issued multiple notices for hearings and required the assessee to submit responses and documents to substantiate its grounds of appeal.

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The CIT(A) observed that the assessee failed to respond to these notices or upload any submissions, leading to the dismissal of the appeal via an ex-parte order.

Aggrieved by the CIT(A)’s order, the assessee appealed to the ITAT. The counsel for the assessee, argued that the non-compliance was not deliberate. The counsel contended that the assessee faced challenges in responding to the notices.

The counsel submitted that the CIT(A)’s order of dismissal without considering potential circumstances beyond the assessee’s control violated the principles of natural justice.

The two-member bench comprising Partha Sarathi Chaudhury (Judicial Member) and Arun Khodpia (Accountant Member), observed that the CIT(A) dismissed the appeal solely due to non-compliance to notices.

The tribunal relied on its own precedent in Brajesh Singh Bhadoria Vs. Dy./ACIT, where a similar ex-parte order was remanded for fresh adjudication observing that the Income Tax Act, being a welfare legislation, requires the benefit of doubt to be given to the assessee in cases of non-compliance, provided there is no intentional disregard of notices.

The tribunal also cited the Bombay High Court’s decision in Vijay Shrinivas Rao Kulkarni Vs. Income-tax Appellate Tribunal (2025), which emphasized that dismissing an appeal ex-parte without ensuring a proper opportunity of being heard violates the principles of natural justice under Article 14 of the Constitution of India.

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The tribunal held that the assessee deserved one final opportunity to present the case on merits. The tribunal set aside the CIT(A)’s order and remanded the matter to the CIT(A) with directions to adjudicate the appeal fresh, ensuring a reasonable opportunity of being heard for the assessee.

The tribunal also directed the assessee to comply diligently with all hearing notices and submit necessary documents promptly to avoid further delays. The appeal of the assessee was allowed for statistical purposes.

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