2013 (10) TMI 1405 - AT - Income Tax

Opportunity of bearing heard - essence of principles of natural justice - Held that - We are of the considered opinion that this matter deserves to be restored back to the file of the AO to be decided de novo as per law needless to say after providing an adequate opportunity of hearing to the assessee. We therefore restore this issue back to the file of the AO to be decided afresh as per law after analyzing the facts of the case. Side by side we hereby direct the assessee to present before learned AO either in person or through an authorized representative within 30 days on receipt of this order and assist the AO in all respect to get this appeal finalized at an early date. In any case AO is at liberty to proceed as per law

Summary

Issues:
1. Opportunity for hearing not provided by CIT(A)
2. Ex-parte assessment order passed by AO
3. Non-compliance with notices
4. Illness of Chairman affecting representation
5. Restoration of the case to AO for de novo decision

Analysis:
1. The appeal was filed by the Assessee due to the lack of further opportunity for a hearing before the CIT(A) based on the nature of work and illness of the Chairman of the Society. The CIT(A) had dismissed the appeal without providing additional hearing opportunities, leading to the appeal before the ITAT.

2. The impugned assessment order under section 144 of the IT Act was passed by the AO due to non-compliance with notices by the Assessee, a cooperative society managing laborers. The AO proceeded ex-parte as the notices were not attended to, and the CIT(A) upheld the AO's decision. The Assessee cited unavoidable circumstances, including the illness of the Chairman, for non-representation.

3. The Chairman of the Society submitted a letter explaining the reasons for non-appearance before Revenue Authorities, attributing it to illness. The Chairman requested another opportunity to present the case before the AO, emphasizing the cooperative nature of the society's work and the impact of the illness on providing necessary information.

4. The ITAT, after considering the circumstances, decided to restore the case to the AO for a de novo decision, emphasizing the importance of providing the Assessee with a fair opportunity for a hearing. The Assessee was directed to appear before the AO within 30 days and assist in finalizing the appeal promptly. The restoration was for de novo adjudication, allowing the Assessee another chance to present their case.

5. Ultimately, the ITAT allowed the appeal of the Assessee for statistical purposes only, indicating that the restoration was primarily for procedural and fairness considerations rather than a substantive change in the decision. The case was remanded back to the AO for a fresh decision in accordance with the law, ensuring due process and fair treatment for the Assessee.