2020 (12) TMI 80 - AT - Income Tax

Denial of natural justice - CIT(A) dismissed the appeal ex-parte - Invalid Dismissal of Appeal - HELD THAT - We are unable to sustain the stand of the learned CIT(A). As learned counsel rightly contends it was not open to the learned CIT(A) to dismiss the appeal ex-parte, without furnishing any opportunity of hearing to the assessee, on a hyper-technical ground. The assessee had no opportunity whatsoever to explain it s stand or to rectify the alleged mistake. Such a course of action is clearly violative or the principles of natural justice. - vacate the impugned ex-parte order, and remit the matter to the file of the CIT(A) for fresh adjudication in accordance with the law after furnishing a reasonable opportunity of hearing to the assessee.

Summary

Issues:
1. Invalid Dismissal of Appeal
2. Violation of Natural Justice

Invalid Dismissal of Appeal:
The appellant challenged the ex-parte order of the CIT(A) dated 13.03.2019, citing the dismissal of the appeal on the basis of non-verification of Form-35 by the Managing Director or Director. The appellant argued that Rule 45 of the Income Tax Rules, 1962, mandates verification by the authorized person under Section 140 of the Income Tax Act, 1961. The Form-35 was signed by the Director of the company, who was authorized to sign as per the rules. The appellant contended that the system allowed the appellant's name to be written in the verification, leading to the dismissal of the appeal. The appellant objected to this action, seeking the quashing of the CIT(A)'s order.

Violation of Natural Justice:
The appellant further contended that the CIT(A) violated the principles of equity and natural justice by not providing any opportunity to the appellant. This lack of opportunity was seen as a gross violation of natural justice principles. The appellant objected to this violation and requested the quashing of the CIT(A)'s order on the grounds of the denial of natural justice.

The ITAT Mumbai, after considering the arguments, found that the CIT(A) had dismissed the appeal ex-parte without granting the appellant an opportunity to be heard, solely on a technical ground. The ITAT deemed this action as a violation of natural justice principles. Consequently, the ITAT set aside the ex-parte order and remitted the matter back to the CIT(A) for fresh adjudication in compliance with the law, ensuring a reasonable opportunity of hearing for the appellant. As a result of allowing the grounds raised by the appellant, all other issues in the appeal were deemed academic and not requiring adjudication at that stage. Therefore, the appeal was allowed for statistical purposes.