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2016 (12) TMI 624 - AT - Income TaxDenial of natural justice - non appearance by the Authorised Representative on whom the assessee was absolutely relied - Held that - There is merit in the submissions of the assessee as the propositions canvassed by the the assessee are supported by the facts narrated by him. The assessee has been cheated by the ld. Counsel/ld. AR and therefore the assessee has submitted that the assessee in the instant case has not got the natural justice and therefore we are of the view that the assessee should not suffer because of gross negligence of the ld. AR. Therefore we remit the case back to the file of the ld. CIT(A) to decide the appeal afresh after giving an opportunity of being heard to the assessee.
Issues:
1. Appeal challenging order of Commissioner of Income Tax 2. Non-appearance of Authorized Representative before CIT(A) 3. Alleged insufficient drawing and disallowance of interest by AO 4. Violation of principles of natural justice in confirming disallowances 5. Sustainability of disallowances in law Issue 1: The appeal filed by the assessee challenged the order passed by the Commissioner of Income Tax for the assessment year 2007-08, which was based on the assessment completed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961. The appellant, engaged in the trading of Gwar and refined dal, declared a total income of ?1,11,010. The Commissioner confirmed the AO's action, noting the appellant's lack of effort in pursuing the appeal, leading to dismissal due to non-appearance and failure to substantiate claims made in the grounds of appeal. Issue 2: The main grievance of the assessee was the non-appearance of the Authorized Representative (AR) during the appellate proceedings before the CIT(A). The AR's absence resulted in an ex-parte order against the assessee. The assessee argued that they should not be penalized for the AR's negligence and requested an opportunity to present their case before the CIT(A). The ITAT found merit in the assessee's submissions, acknowledging the lack of natural justice due to the AR's actions, and remitted the case back to the CIT(A for a fresh decision after giving the assessee an opportunity to be heard. Issue 3: The grounds of appeal also included challenges to the addition for insufficient drawing and disallowance of interest made by the AO. The appellant contended that these actions were arbitrary and lacked reasonable cause. However, the ITAT did not delve into these specific issues as the focus of the hearing was primarily on the non-appearance of the AR and the violation of natural justice. Issue 4: The appellant raised concerns about the violation of principles of natural justice, arguing that the disallowances were confirmed merely due to non-appearance without a proper examination of the merits and without a speaking order. The ITAT acknowledged these concerns but primarily focused on the lack of opportunity for the assessee to present their case, leading to the decision to remit the case back for a fresh hearing. Issue 5: The sustainability of the disallowances in law was briefly touched upon in the grounds of appeal. However, the ITAT did not provide a detailed analysis of the legal sustainability of the disallowances as the decision primarily revolved around the procedural irregularities and lack of natural justice in the appellate proceedings. In conclusion, the ITAT allowed the appeal for statistical purposes, remitting the case back to the CIT(A) to decide afresh after providing the assessee with an opportunity to be heard, emphasizing the importance of natural justice and fair proceedings in tax matters.
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