Violation of Natural Justice: ITAT Sets Aside CIT(A)’s Ex-Parte Order Passed without Notice to Assessee [Read Order]

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), in a recent ruling has set aside an ex-parte order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [CIT(A)](NFAC), after finding that the assessee had not been issued any notice before the order was pronounced. The Tribunal remanded the matter back to the CIT(A) for de novo adjudication, directing that a reasonable opportunity of being heard be granted to the assessee.

The case concerns the assessment year 2017–18. The assessee, Sandha and Associates Private Limited, challenged the ex parte order passed by the CIT(A), asserting that the order was passed without any intimation and that no opportunity was provided to present submissions or documents in defence.

The authorised representative for the assessee submitted that the appeal before the CIT(A) was dismissed summarily and in violation of the principles of natural justice. The order did not reference any notice being served on the assessee, and the Tribunal was urged to restore the matter to the CIT(A) file for a fresh hearing.

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However, the departmental representative supported the CIT(A) 's order, asserting that it was valid and did not merit interference.

On hearing both parties, the tribunal noted that the CIT(A) had upheld the additions made by the Assessing Officer in an ex-parte proceeding without indicating whether any notice was ever issued or served upon the assessee. It was further observed that the Assessing Officer had rejected the assessee’s books of account and estimated the net profit at 8% of the total turnover, resulting in an assessed income of ₹55,69,219. However, the CIT(A) affirmed this addition without addressing the case's merits or allowing the assessee to contest the findings.

The tribunal held that a bare perusal of the impugned order reveals that there is no mention of any notice to the assessee by the CIT(A) in the order, much less the fact of service of notice. Asserting that the right to be heard is a fundamental tenet of due process, the ITAT held that the failure to issue notice rendered the appellate order vulnerable. “Considering all the facts of the case, we deem it appropriate to restore this appeal to the CIT(A) for de novo adjudication after issuing notice to the assessee,” the Bench stated.

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The Tribunal, comprising of Vikas Awasthy (Judicial Member) and Renu Jauhri (Accountant Member), further directed that the CIT(A) shall grant a reasonable opportunity to the assessee to make submissions and produce necessary documentation and, thereafter, pass a speaking order by law. At the same time, it cautioned the assessee to participate in the proceedings once notice was served. As a result, the appeal was allowed, and the CIT(A) order was set aside.

To Read the full text of the Order CLICK HERE

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