2016 (8) TMI 1590 - AT - Income Tax

Ex-parte order passed by CIT(A) - on various dates of hearing the case was not attended by the counsel - assessee contended that no proper opportunity of hearing was afforded to the assessee - CIT(A) was not justified in rejecting the appeals of the assessee ex-parte. The documents relied by the AO were not made available to assessee - HELD THAT - The principle of audi alteram partem is the basic concept of natural justice. The expression audi alteram partem implies that a person must be given opportunity to defend himself. This principle is sine qua non of every civilized society. The right to notice right to present case and evidence right to rebut adverse evidence right to cross examination right to legal representation disclosure of evidence to party report of enquiry to be shown to the other party and reasoned decisions or speaking orders. We find that the right of hearing is decided by the Hon ble Supreme Court in the case of Maneka Gandhi vs. Union of India 1978 (1) TMI 161 - SUPREME COURT as held that rule of fair hearing is necessary before passing any order . We find that it is pre-decision hearing standard of norm of rule of audi alteram partem. We find that in this instant case the assessee was not given proper hearing. Therefore we are of the view that the assessee must be given one more opportunity of hearing and to represent his case. Therefore we restore these appeals to the file of ld. CIT(A) for allowing proper opportunity of being heard in accordance with law. Appeals of the assessee are allowed for statistical purposes.

Summary

Issues:
Appeal against orders of CIT(A) for assessment years 2007-08, 2008-09, and 2010-11; CIT(A) passing ex-parte order; Denial of proper opportunity of hearing; Violation of principles of natural justice; Restoration of appeals for proper hearing.

Analysis:
The appeals were filed by the assessee against the orders of the ld. Commissioner of Income-tax (Appeals)-II, Indore, for assessment years 2007-08, 2008-09, and 2010-11. The appeals pertained to assessment orders passed under section 143(3) of the Income-tax Act, 1961 by the ACIT, 5(1), Indore. The assessee raised common grounds of appeal challenging the ex-parte orders passed by the CIT(A) on the basis that the counsel had attended the hearings. The contention was that the orders were illegal and required to be quashed due to lack of proper representation and discussion on merits.

The counsel for the assessee argued that no proper opportunity of hearing was provided, and the appeals were unjustly rejected ex-parte by the CIT(A) without making the documents relied upon by the Assessing Officer available to the assessee. The CIT(A) had relied on the orders of the authorities below, while the assessee emphasized the importance of being heard and having the opportunity to present their case.

The Appellate Tribunal noted that the principle of audi alteram partem, ensuring the right to be heard, defend oneself, present evidence, and receive a reasoned decision, is fundamental to natural justice. Referring to the case law of Maneka Gandhi vs. Union of India, the Tribunal highlighted the necessity of a fair hearing before passing any order. It was emphasized that the assessee was not given proper hearing, leading to the decision to restore the appeals to the file of the CIT(A) for allowing a proper opportunity to be heard in accordance with the law.

In conclusion, the appeals of the assessee were allowed for statistical purposes, with the direction for the assessee to cooperate in the appeal proceedings and submit necessary evidence. The judgment was pronounced in open court on 23rd August 2016, emphasizing the importance of adhering to the principles of natural justice and providing a fair opportunity for parties to present their case.