2019 (4) TMI 2017 - AT - Income Tax

Ex-parte order of CIT-A - condonation of delay rejected - HELD THAT - As the assessee has not appeared before the ld. CIT(A) and hence an ex-parte order was passed. The ld. CIT(A) has not disposed off the case on merits. The petition for condonation of delay was rejected. The assessee was not heard. Hence we deem it fit to restore the issue to the file of the ld. CIT(A), for fresh adjudication, in accordance with law, after giving the assessee adequate opportunity of being heard, on the grounds of natural justice, subject to the payment of cost of ₹ 5,000/- (Rs. Five Thousand Only) by the assessee in favour of Prime Minister Relief Fund, for having not appeared before the ld. CIT(A) as well as before us in this proceeding. The CIT(A) shall verify the said payment by the assessee and thereafter proceed to dispose off the case afresh, in accordance with law. For this proposition to levy costs, while condoning the actions of the assessee, we rely on the decision of the Hon ble Bombay High Court in the case of Vijay Vishin Meghani vs. The Deputy Commissioner of Income Tax Circle 2017 (10) TMI 248 - BOMBAY HIGH COURT we have imposed the costs not because the appellant was not acting bona fide but finding that even after the legal advice was obtained, the matter was decided in favour of the assessee, there was time which was consumed and in all this delay of 2984 days occurred. While condoning such delay, it is permissible for court, in its discretion, to impose costs. Eventually, the rights and equities have to be balanced.

Summary

Issues: Appeal against order passed by CIT(A) - Ex-parte order - Condonation of delay - Restoration of issue for fresh adjudication - Imposition of costs - Reference to Bombay High Court decision.

The appeal was filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals) - 10, Kolkata, for the Assessment Year 2014-15. The assessee did not appear before the CIT(A), resulting in an ex-parte order. The CIT(A) did not dispose of the case on merits and rejected the petition for condonation of delay. The ITAT decided to restore the issue to the CIT(A) for fresh adjudication, emphasizing the need for the assessee to be heard and providing an opportunity for the same. The assessee was directed to pay a cost of ?5,000 to the Prime Minister Relief Fund for not appearing before the CIT(A) or the ITAT. The ITAT referred to a decision of the Bombay High Court to justify the imposition of costs in such circumstances. The appeal was allowed for statistical purposes, with the issue being remanded to the CIT(A) for fresh adjudication.

The key aspect of the judgment revolves around the failure of the assessee to appear before the CIT(A), leading to an ex-parte order. The ITAT emphasized the importance of natural justice and the right to be heard, prompting the decision to remand the issue back to the CIT(A) for fresh adjudication. The ITAT's decision to impose a cost of ?5,000 on the assessee was based on the principle of balancing rights and equities, as highlighted in the Bombay High Court decision referenced in the judgment. The ITAT's approach aimed to ensure that substantial justice was served while discouraging non-appearance before the authorities.

By referring to the Bombay High Court decision, the ITAT justified the imposition of costs on the assessee for not appearing before the authorities. The ITAT's decision to allow the appeal for statistical purposes indicates that the primary objective was to ensure that the case was reconsidered on its merits by the CIT(A) after providing the assessee with a fair opportunity to present their case. The judgment underscores the significance of procedural fairness and adherence to principles of natural justice in tax proceedings, even when dealing with cases of non-appearance by the assessee.